value investment (n): a form of investment in which those who invest select companies’ stocks or other forms of financial receptacles that are either undervalued objectively on the market or have a yet-undiscovered or yet-unactivated potential, both relative to the potential as understood by investors
Value fund managers look for companies that have fallen out of favor but still have good fundamentals. The value group may also include stocks of new companies that have yet to be recognized by investors. (from this post on Merrill’s website)
As an example:
Say you have a human person who identifies a need, and then the mind model or conceptualization for the product that can meet the need.
I’ll share one company which I follow on Twitter, to which I gave a shout-out, given that great thriller or speculative writers might find something very interesting for themselves in this company’s work, if their plot development depends in any shape or form on cool IT or tech developments that have never been treated before in fiction: Axon produces technology to help protect the lives of police officers and others working within the public safety realm. (Check out the video on this page. Isn’t this the coolest?)
Using Axon as a purely theoretical example–I do not know the details of Axon’s own strategic planning or history, in terms of conceptualization-to-patent-to-product-development–this can be said: Before someone thought about the time that it takes a police officer to identify a person who observed a crime, to taking notes in an interview, to transcribing those notes for their own chief, to then moving on the transcription–a product did not exist that could aide police officers in saving this time.
Then someone figured the genius idea out, and then Axon moved on the concrete product development, and then it had to launch its own public stocks, and then people had to identify those stocks, and then invest in them. Before these stocks took on some form of public urgency, though–and certainly before the product was ever developed–the value of the product and thus of the stock was undervalued; by value, here, we mean its financial weight relative to other stocks on the market (it’s valued less than it ought to be, given the definition above). A good value investor, in doing his/her research, will identify products of this kind.
Find the newest, coolest need; respond to it; invest in it; and then watch your investment return significantly greater funds than investment in a product that meets a need that isn’t really a need.
Besides this form of dynamic financial value, measured at the level of the stock, there is also the value of the product or company understood in its human or aesthetic sense–the value met, in a personal way, of a product developed and used. It’s an interesting matrix, to think about both the value of the stock as it is, financially, and also the value of the product in human terms.
A long time ago, during my undergrad, I took a course in international development, and one of the questions treated in the course was micro-financing. I was fascinated, also, given that it made sense–both on paper and in experience, given huge case studies abroad–for an investor to pay $250 for a sewing machine, and give a woman a sewing machine, so that with apt sewing skills, she could maximize the value of the $250 over time with the development and sale of her own products (and the investment serving as a sort of guarantor of that kind of value-maximization over time), than to just give her $250.
Shocking, isn’t it, what a basic “mind model” distinction between pure funds and product value, in one form or another contingent on funds, can do to investors–as well as to the creation and maintenance of healthy infrastructure, over time?
If you think about it, book publishing is sort of like this–or could be like this, if writers, agents, editors, publishers, and investors in the book publishing realm thought about their own work with this kind of an acute sensibility and analysis of the kind of product being pitched. This applies, in a particular way, to non-fiction, especially non-fiction that is built and ordered toward the development and maintenance of longevity in infrastructure–a good book about tobacco as a public health concern will aide federal and state governments in responding to these public health concerns in actuality, beyond the theory about the issue and the theory about the necessary public health response contained within the book.
The book is both a product of theory as it is a product that opens up a demand–an undervalued need, say, before the book is published–among readers across the world.
One way to think about agenting on the non-fiction end is this: A primary underlying task involves sifting through huge quantities of research of diverse kinds (financial, creative, regional, personal, and more) to place the highest-quality products, unique in their content, before publishing houses for purchase, given the model above. The research is key to finding holes in published products. Why has the whole planet, for example, never published a book about some of the world’s most key, individual historical icons? You might be surprised about the depravity in biographies.
I, for example, with regards to the development of proposals from the ground up for non-fiction books, help academics sift through large quantities of data and their own research to shape an argument for popular/trade publication (think your big five publishing houses: Penguin Random House, Simon & Schuster, etc.). Buy this, because it is genius, and it needs to be published; it fits a need, and it creates an experience, and it moves readers over time to remain committed to a product and an imprint, to an idea and to a conversation.
[Read: At its heart, agenting and publishing in this way is a project of ‘long-term, value-only investment’ applied to a different form of creative work. I spend time with ‘companies’ (books) to place before ‘analysts’ (editors, publishers) to maximize authors’ returns (royalties, post-advance earnout) over time. Fun, isn’t it–what it does to the mind?]
So much more could be said, but this is one of the reasons why I came back to book publishing. Really good books, fiction and non-fiction both, have a huge potential to save the world–good fiction aides culture, creates minds and hearts in a vision of humanity and the good; genius non-fiction helps us understand the structures we create and adopt, and helps us also run a thousand miles in the direction of change that brings true joy, and freedom, collaboration and acute responses, and moves those with minds and hearts for good conversation into those exact conversations.
I’ll leave these musings here.