Is Value Investing Still Relevant in 2026? Lessons from Benjamin Graham

Every few years, someone declares value investing dead.

Usually, the argument sounds something like this:

• Technology companies are dominating the stock market.
• Traditional valuation ratios don’t work the way they used to.
• Intangible assets such as software, data and brands matter more than factories and equipment.
• Passive investing is pushing money into large index constituents regardless of valuation.

As such, it’s fair to ask:

Is value investing still relevant?

It’s an important question for investors, analysts and CFA candidates alike.

After all, the investing world looks very different from the one Benjamin Graham wrote about.

All said and done, professional interest in value investing hasn’t disappeared. In fact, CFA Society New York continues to host a Value Investing Group dedicated to discussing both the application and modification of Graham’s ideas. The society’s annual Ben Graham Conference also remains a major event for investment professionals interested in valuation and fundamental investing.

That tells us something important.

The debate isn’t really about whether value investing works.

The debate is about how value investing should be practiced today.

The core ideas behind value investing remain remarkably relevant. What has changed is the way investors estimate value, analyze businesses and deal with modern challenges such as intangible assets, higher interest rates and rapidly evolving industries.

In this article, we’ll explore:

• The most important Benjamin Graham investing principles
• Why price and value are different
• The role of intrinsic value investing
• Why margin of safety investing still matters
• How to spot and avoid value traps
• The challenges of intangible assets valuation
• Value investing during high interest rates
• Value versus growth investing
• Where CFA value investing concepts appear in the curriculum

What Is Value Investing?

Let’s start with a simple definition.

Value investing is the practice of buying an investment for less than what you believe it’s worth.

That’s it.

Of course, the difficult part is figuring out what something is actually worth.

A good value investor tries to answer three questions:

1. What is this business worth?
2. How confident am I in that estimate?
3. Is the current market price low enough to justify the risk?

Most of the work happens before any money is invested.

Price Is Easy. Value Is Not.

One of the most important ideas in value investing is that price and value are not the same thing.

Price is easy to find.

Open a brokerage app and you’ll see it immediately.

Value is different.

Value must be estimated.

Imagine two houses on the same street.

One is listed for $300,000.

The other is listed for $500,000.

Without seeing either property, you don’t know which one offers better value.

Stocks work the same way.

A company trading at $20 per share may be expensive.

A company trading at $300 per share may be cheap.

The number itself tells you very little.

That’s why intrinsic value investing focuses on estimating what a business is worth rather than simply accepting whatever price the market is offering today.

Value Investing Is Not Buying Cheap Stocks

Many beginners think value investing means buying stocks with:

• Low prices
• Low P/E ratios
• Low price-to-book ratios

Sometimes those stocks are attractive.

Sometimes they’re not.

A stock is not a bargain simply because it looks cheap on a screen.

The real question is:

Is the company worth more than its current market price?

That’s the foundation of every successful value investing strategy.

Value Investing Is Not Just Being Contrarian

Some investors assume value investors simply buy whatever everyone else dislikes.

That’s not quite true.

A company might be unpopular because:

• Business conditions are deteriorating
• Debt is becoming difficult to manage
• Competition is increasing
• Customers are leaving

Being different from the crowd doesn’t automatically make you right.

Good value investors want evidence that the market has mispriced a business.

Who Was Benjamin Graham?

Benjamin Graham is often called the father of value investing.

His ideas helped shape modern investing and continue to influence investors, analysts and portfolio managers today.

Many concepts that seem ordinary now were heavily influenced by Graham’s work, including:

• Intrinsic value
• Fundamental analysis
• Financial statement analysis
• Margin of safety
• Risk assessment

His ideas also helped create the foundation for much of today’s fundamental analysis and value investing discipline.

The Market Doesn’t Always Get It Right

Graham believed market prices can be influenced by:

• Fear
• Excitement
• Short-term news
• Popular narratives

Sometimes markets become overly optimistic.

Sometimes they become overly pessimistic.

That doesn’t mean markets are always wrong.

It simply means investors should think for themselves rather than treating every price movement as proof that value has changed.

What Has Changed Since Graham’s Time?

Quite a lot.

The economy Graham analyzed was filled with asset-heavy businesses.

Today’s economy includes:

• Software companies
• Streaming platforms
• Data providers
• Digital marketplaces
• Cloud-computing businesses

Many of these companies rely heavily on intangible assets rather than physical assets.

That’s why some traditional valuation metrics deserve a closer look today.

The principles remain relevant.

The tools sometimes need updating.

Benjamin Graham’s Core Investing Principles

The strongest argument for value investing in 2026 is that Graham’s core principles still make sense.

Treat a Stock Like Part Ownership of a Business

When you buy a stock, you’re not buying a ticker symbol.

You’re buying a small piece of a real business.

That means you should understand:

• How the company makes money
• Whether profits are sustainable
• How much debt it carries
• Whether it generates cash
• The risks facing the business

A stock is not attractive simply because:

• It fell 40%
• It’s trending online
• A friend mentioned it
• It once traded at a higher price

The business always comes first.

Estimate Intrinsic Value

Value investors attempt to estimate what a company is worth.

Possible valuation methods include:

• Discounted cash flow analysis
• Dividend discount models
• Asset-based valuation
• Comparable-company analysis

Every method requires assumptions.

No valuation model eliminates uncertainty.

That’s why valuation should always involve humility.

Require a Margin of Safety

The Benjamin Graham margin of safety remains one of the most influential investing concepts ever created.

Think of it as a cushion.

Suppose you estimate a company is worth $80 per share.

If the stock trades at $78, your cushion is tiny.

If it trades at $56, you have more room for error.

That’s the idea behind margin of safety investing.

You’re acknowledging that your analysis may be imperfect and protecting yourself accordingly.

Separate Investing from Speculation

Graham believed investing should be built on analysis.

Speculation is different.

The key question is simple:

Do you have a sound reason for believing the investment is worth more than you’re paying?

If the answer is no, you’re moving closer to speculation.

Focus on Permanent Loss

Graham worried more about losing money permanently than experiencing temporary price swings.

Those are two different things.

Short-term volatility can be uncomfortable.

Permanent losses often come from:

• Excessive debt
• Fraud
• Structural business decline
• Poor management decisions
• Paying far too much for a business

What Does Intrinsic Value Mean in 2026?

At its core, intrinsic value answers a simple question:

What is this business actually worth?

The challenge is that no one knows the answer with complete certainty.

That’s why good analysts think in ranges rather than single numbers.

Intrinsic Value Is Usually a Range

Let’s imagine three scenarios:

Scenario	Estimated Value
Bear Case	$42
Base Case	$58
Bull Case	$74

Which number is correct?

Maybe none of them.

The future is uncertain.

What matters is understanding how the range changes when assumptions change.

Discounted Cash Flow Analysis Still Matters

DCF remains one of the most popular tools in modern value investing.

The logic is straightforward.

A business is worth the future cash flows it can generate.

The challenge is that small changes in assumptions can dramatically change the estimated value.

That’s why valuation should never become an exercise in spreadsheet worship.

Relative Valuation Has Limits

Common valuation metrics include:

• P/E
• Price-to-book
• EV/EBITDA
• Price-to-sales

They’re useful.

But they don’t prove a company is undervalued.

A low multiple may simply reflect:

• Weak growth
• Higher risk
• Poor business quality
• Industry challenges

Context matters.

Why Margin of Safety Still Matters

If one idea has stood the test of time, it’s this one.

The future is unpredictable.

Everything else follows from that reality.

Every Valuation Contains Errors

No analyst can perfectly predict:

• Interest rates
• Competition
• Consumer behavior
• Economic growth
• Technology shifts

The goal isn’t perfection.

The goal is making thoughtful decisions despite uncertainty.

Great Businesses Can Be Poor Investments

A wonderful company can still be a disappointing investment if you pay too much for it.

Many investors eventually learn that:

A great business and a great stock are not always the same thing.

Price still matters.

Large Discounts Aren’t Always Good News

The opposite is also true.

A stock trading at a huge discount might be a bargain.

It might also be a warning sign.

That’s why investors need to understand the business, not just the valuation ratio.

What Is a Value Trap?

One of the biggest risks in modern value investing is confusing a bargain with a problem.

That’s what value traps are all about.

When Cheap Isn’t Actually Cheap

Suppose a company looks attractive because:

• Its P/E ratio is low
• Its price-to-book ratio is low
• Its share price has fallen sharply

That sounds promising.

But what if:

• Revenue keeps falling?
• Customers are leaving?
• Debt is increasing?
• The industry is shrinking?

The stock may look cheap because the business is getting weaker.

Common Warning Signs

Potential warning signs include:

• Persistent revenue declines
• Weak free cash flow
• Excessive debt
• Obsolete products
• Aggressive accounting
• Poor capital allocation

None of these automatically make a company a value trap.

But they deserve careful investigation.

How to Identify Value Stocks More Effectively

If you’re wondering how to identify value stocks, start with questions such as:

• Why is the stock cheap?
• Does the company generate cash?
• Is debt manageable?
• Is the business improving or deteriorating?
• What would prove the investment thesis wrong?

Those questions are often more useful than any single ratio.

Why Intangible Assets Complicate Traditional Value Investing

This is one of the biggest reasons people question whether value investing still works.

The world has changed.

Many businesses now create value through:

• Software
• Data
• Research
• Brands
• Customer relationships

These assets don’t always appear clearly on a balance sheet.

Accounting Doesn’t Always Capture Economic Value

Here’s the challenge.

Many investments in software, research and brand development are treated as expenses rather than assets.

That can make a business look less profitable than it really is.

It can also distort traditional valuation measures.

Why Price-to-Book Isn’t Always Enough

Historically, price-to-book ratios were extremely useful.

They’re still useful in some industries, including:

• Banking
• Insurance
• Asset-heavy businesses

However, a software company may create enormous value while showing relatively little book value.

That’s where intangible assets valuation becomes important.

Not Every Intangible Creates Value

At the same time, investors should avoid assuming every dollar spent on research or software automatically creates a valuable asset.

Some investments succeed.

Others fail.

Good analysis matters.

Modern Value Investing Requires More Business Analysis

This is one of the defining features of modern value investing.

Investors increasingly need to understand:

• Business models
• Competitive advantages
• Customer retention
• Pricing power
• Reinvestment opportunities

The analyst’s job is becoming more important, not less.

Does Value Investing Work During High Interest Rates?

Many investors have recently become interested in value investing during high interest rates.

Let’s keep it simple.

Higher Rates Change Valuations

When interest rates rise, future profits become less valuable in today’s dollars.

As a result, investors may become less willing to pay very high prices for profits expected many years from now.

High Rates Create Challenges Too

Some traditional value companies carry:

• Significant debt
• Cyclical earnings
• Refinancing needs

Higher interest rates can create problems for those businesses as well.

That’s why higher rates do not automatically guarantee success for value investors.

Financial Strength Matters More

Balance-sheet quality becomes increasingly important when financing costs rise.

That’s true whether you’re evaluating a growth stock or a value stock.

Value Investing Versus Growth Investing

The debate around value versus growth investing has been going on for decades.

Many people treat these styles as complete opposites.

They’re not.

What Is Growth Investing?

Growth investors focus heavily on companies that may increase:

• Revenue
• Earnings
• Market share
• Cash flow

faster than average.

What Is Value Investing?

Value investors focus on whether a stock is trading below a reasonable estimate of value.

Notice that growth isn’t excluded.

Growth Can Be Part of Value

A fast-growing company can absolutely qualify as a value investment if the market underestimates its future potential.

Likewise, a slow-growing company can be expensive if investors are too optimistic.

That’s why many experienced investors view growth as one ingredient in valuation rather than an opposing philosophy.

Value Stocks Versus Growth Stocks

Value Stocks	Growth Stocks
Focus on valuation	Focus on future growth
Risk of value traps	Risk of overpaying
Price matters heavily	Expectations matter heavily
Often seek discounts to value	Often seek long-term expansion

The smartest investors generally avoid becoming trapped by labels.

What Does Modern Value Investing Look Like?

Today’s value investing strategy often looks broader than traditional stereotypes suggest.

It isn’t just about buying low P/E stocks.

Quality at a Reasonable Price

Many value investors now search for businesses with:

• Competitive advantages
• Strong balance sheets
• Durable cash flows
• Good management
• Reasonable valuations

Looking Beyond Screens

Traditional screens still help.

But they don’t tell the whole story.

A low P/E ratio doesn’t explain:

• Business quality
• Management quality
• Future risks
• Competitive position

Analysis still matters.

Modern Value Investing Is Adaptive

The best value investors continuously adapt while staying true to Graham’s basic principles.

The core ideas remain remarkably familiar:

• Understand the business.
• Estimate value.
• Demand a margin of safety.
• Stay disciplined.

Where Does Value Investing Appear in the CFA Curriculum?

CFA value investing concepts appear throughout the CFA Program.

CFA Level I

Candidates build foundations through topics such as:

• Financial Statement Analysis
• Equity Investments
• Time Value of Money
• Financial Ratios

CFA Level II

Level II applies valuation in greater detail through:

• Dividend discount models
• Free cash flow models
• Relative valuation
• Financial-statement adjustments
• Company analysis

CFA Level III

At Level III, these ideas appear within:

• Portfolio construction
• Active management
• Security selection
• Investment philosophy

Value investing is not one chapter in the CFA curriculum.

It’s woven throughout the program.

So, Is Value Investing Still Relevant in 2026?

Yes.

Absolutely.

But not because every low P/E stock is a bargain.

And not because every low price-to-book ratio signals opportunity.

Value investing remains relevant because investors still face the same fundamental question Benjamin Graham faced:

Is this asset worth more than its current market price?

That question hasn’t changed.

What’s changed is the way we answer it.

Successful value investing in 2026 requires investors to think beyond traditional screens and consider:

• Intangible assets
• Business quality
• Competitive advantages
• Financial resilience
• Interest rates
• Cash-flow durability

The best takeaway from Benjamin Graham isn’t a valuation formula.

It’s a mindset.

Estimate value carefully.

Recognize uncertainty.

Demand a margin of safety.

Stay disciplined.

Those principles remain just as useful today as they were decades ago.

Value Investing Frequently Asked Questions

Is value investing still relevant in 2026?

Yes. The core principles of value investing remain relevant. Investors still need to distinguish between price and value and avoid overpaying for assets.

What are Benjamin Graham investing principles?

The main Benjamin Graham investing principles include treating stocks as ownership in businesses, estimating intrinsic value, requiring a margin of safety, separating investing from speculation, and focusing on permanent loss rather than short-term volatility.

What is a margin of safety?

A Benjamin Graham margin of safety is the difference between what you think a business is worth and the price you pay for it.

What is the difference between price and intrinsic value?

Price is what the market currently offers. Intrinsic value is an estimate of what the business is actually worth.

What is a value trap?

One of the most common value traps is a company that appears cheap using traditional valuation measures even though its business fundamentals are steadily deteriorating.

Are value stocks better than growth stocks?

No. The value stocks versus growth stocks debate has no universal winner. Investment results depend on valuation, cash flows, risks, and investor expectations.

Do higher interest rates favor value investing?

Higher rates can increase the appeal of current earnings and cash flows, but they can also hurt highly leveraged companies. That’s why value investing during high interest rates requires careful analysis rather than assumptions.

Why do intangible assets create challenges for investors?

Intangible assets valuation can be difficult because many valuable assets such as software, data, research, and brands are not fully reflected in traditional accounting statements.

Is a low price-to-book ratio evidence that a stock is undervalued?

No. Assets can be overstated, obsolete, or unable to generate strong returns.

Is value investing covered in the CFA curriculum?

Yes. CFA value investing concepts appear throughout Financial Statement Analysis, Equity Investments, valuation models, portfolio management, and security selection.