To be a successful value investor, you must have the right attitude toward investing in general. In particular, you must be averse to risk and speculation. It is better to own five companies that rise by 15 per cent per year than to own one that goes up 300 per cent and four that fall to zero. The return on tech stocks in '98 and '99 was not reasonable. Above all, look for safety of capital.
Nothing has a bigger effect on investment goals that unexpected bad news.
A margin of safety helps to reduce the effects of such calamities. Creating a safety net is one of the fundamentals of value investing. You can do this by choosing companies that have solid assets, good earning power, and diversification in their product offerings. Other safety features include large working capital, stable cash flow and a record of increasing dividend payments. The answer comes down to perception and marketing.