Value works, even if you’re unemployed and live with your parents

Value investing has fallen out of favour. It's time to remake the case for going against the grain.

“George Costanza did the opposite” by DALL•E

George Constanza, the bald one in Seinfeld, makes lousy choices. "Every instinct I have, in every aspect of life, be it something to wear, something to eat—it's all been wrong." But George turns his life around, within minutes, by resolving to always do the opposite. He scores a date, mixes up his wardrobe, and gets a job with the Yankees. Investors should follow his lead.

All red-blooded, money-hungry stock pickers want to beat the market. Punters and professionals alike spend hours scouring screens and testing strategies. But following the crowd and instinct leads to poor results. Instead, if you're an active investor, you should be a value one, buying stocks for less than their intrinsic value. This strategy works. It outperforms and is the soundest approach. It's also countercyclical as it uses our innate cognitive biases to help rather than to hurt us.

Value investing has a long track record of outperformance. Over the last hundred years,…