Value investing has intuitive appeal. Identify a company with a value higher than its current share price, buy and wait. Eventually, the short-term “voting machine” that is the market will recognise the value and the share price will rise accordingly. It’s a logical approach to investing for long-term wealth creation.

There are two main problems. The first is the concept of valuation. Many investors believe that valuation is fact-based as it is derived from the fundamentals of a company. There are many different ways to value a company, but all of them rely on estimates.