Value investing is an investment strategy that involves selecting stocks that appear to be trading for less than their intrinsic or book value. Investors who subscribe to this philosophy believe that the market often overreacts to news, leading to stock price fluctuations that do not correspond to a company's long-term fundamentals. This means that through careful analysis and research, it is possible to find undervalued stocks that can provide significant returns over time. Understanding the principles of value investing is essential for any investor aiming to identify hidden gems within the stock market.