NARENDRA NATHAN, SANJAY SINGH AND SANKET DHANORKAR

When hypermarkets, online retailers and real estate de-velopers offer discounts, the whole world gets to know. But spotting a dis-

count on Dalal Street is less obvious and more complicated. Since the time of Benja-min Graham, the gurus of value investing have tried various ways to identify stocks

that are trading at a discount to their actual value.

When you buy a share with a tremendous growth potential, you are a growth investor. Value investing is different, and involves picking out shares that are priced below their intrinsic value. Its a contrarian strategy because it requires investors to embrace un-loved stocks.

When you practise value investing, you are not jumping on to the bandwagon. You stand alone, says Sankaran Naren, CIO of

ICICI Prudential Mutual Fund (see guest col-umn page 7).

But swimming against the tide can prove enormously rewarding for the simple reason that you buy good stocks at beaten down prices. Since you buy at a low price, the probability of loss of capital is lower, says Atul Kumar, Head of Equities, Quantum Mutual Fund.

Our cover story this week looks at this hugely successful albeit contrarian investing strategy. We put the 200 stocks in the S&P

Buying stocks that are trading below their intrinsic value can prove very rewarding. Learn to identify such gems before the market realises its folly.

02 Cover StoryThe Economic Times Wealth, May 18-24, 2015