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The difference is, for the value investor, the selling part is optional. A company can repay its investors with dividends, liquidation (rare), being bought out... Often value investors end up selling to the market, but you have to break away from the mentality that buy low sell high is the point of "investing". If it is that way, then it's a zero-sum game, so why's it an important part of capitalism again?

Ignoring liquidation and acquisition, because they are rarely the goal of a value investor...

Dividends do repay investors, but the price always adjusts ex-dividend. A value investor is not happy owning a declining asset even if the dividend pays at regular intervals. They always look for capital appreciation and will, whenever they deem appropriate, convert unrealized gains into realized.

You seem to be referring to buy & hold. Taking the Dow as a market proxy, if you bought BEFORE June 1999, you are currently at break even... over 10 years later. Congratulations, you're strategy is working out perrrrfectly.

A value investor would not have bought a broad market index in 1999, where the P/E-10 was, IIRC, somewhere around 40!

I have to say I'm not particularly interested in discussing this with someone who thinks the classic value investing paradigm is comparable to buying and holding an index at the worst possible time.

Re-read the last sentence. You're not paying attention.

    If it is that way, then it's a zero-sum game
No, because the amount of value in the system trends up over time. There is not a fixed amount of wealth in the world.

The point is that stocks are not a priori worth money just because they represent a share of a company. Value has to come from them somehow.

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