The Intelligent Way
To Outfox Wall Street

No matter what happens in the stock market!

Dear Intelligent Investor:

There are few investment strategies I know of that can turn a $10,000 investment into more than $30 million…

Help you pocket gains that have consistently beaten Wall Street and the S&P 500 by nearly 30 percent…

And build a solid foundation of wealth in the safest, most reliable way possible.

It's called value investing. It's the best-kept secret on Wall Street — and a nearly effortless way to keep your portfolio growing worry-free year after year.

Invest The Way The Masters Do

My name is Philip Durell. I'm Lead Advisor of Motley Fool Inside Value.

Think about it: What do some of the greatest investors of the 20th century — Ben Graham, Warren Buffett, John Templeton, Marty Whitman, and John Neff — have in common?

They're all value investors.

Value investing is the art of finding great stocks that are selling below their real value. It's also the best way I know of to invest with a margin of safety, earn superior returns, and minimize your risk.

The man who literally wrote the book on value investing, Benjamin Graham, followed this very strategy and averaged 20% returns for over 30 years. During that time, a modest $10,000 investment would have grown to $2.37 million!

Warren Buffett is the ultimate value investor. His results are legendary. Using this strategy, he has beaten the S&P 500's total return 60 to 1. If you had invested in his Berkshire Hathaway stock in 1965, you would have…

Turned Every $10,000 Into $30 Million!

That's why value stocks belong in every portfolio. And it's why every investor must learn to think like a value investor. As Warren Buffett's longtime business partner Charlie Munger says, "All intelligent investing is value investing."

I firmly believe that value investing is the key to building life-changing wealth. And it's my mission to help individual investors like you find great value stocks.

How to Outfox Wall Street

How does value investing work?

It involves scouring the market for mid - to large-sized companies trading for 50 to 70 cents on the dollar — beaten-down companies that still have solid management, free cash flow, and attractive assets.

Finding these rare investments is well worth the trouble, because they have consistently helped generations of the world's most successful investors preserve capital, minimize risk, and achieve market-trampling returns over the long term.

Value Consistently Beats Growth, Hands Down

When a company has a quarter or two of unexpectedly high earnings, investors often fall into what we value investors call "the growth trap."

That's when Wall Street gets so excited it bids up the stock prices to levels that overestimate the company's growth.

And it's this emotional pursuit of chasing hot stocks or speculating in new (and unproven) technologies that doom investors to poor returns — and heavy losses.

Value Investing Is the Polar Opposite of Speculation

You invest worry-free because you squeeze out risk at every step. You estimate your profit before you put down your money. Then you buy a dollar's worth of value for as little as 50 cents because you know what you're buying.

You are not basing your decision on price, but on the intrinsic value of the company you're buying. That's why…

It's The Best Way To Find Safe Stocks

And it's the best way to make great profits across all types of markets.

Value investors consider themselves owners of companies with strong competitive advantages, like savvy management and solid financial performance. As financial reporter Peter Brimelow writes, "Inside Value doesn't time the market."

And it's true — we don't base our recommendations on the state of the market. Instead, we find hidden value in stocks that may be down for now, but have what it takes to become a great turnaround story.

Like IBM, for instance.

IBM: A Typical Value Story

Let me take you back to 1993. IBM had posted an $8 billion loss, and its share price was in freefall. Technology was changing the world, and IBM wasn't adapting. It was losing business to up-and-comers like Dell, Hewlett-Packard, and Microsoft. Wall Street was in panic mode.

But IBM was a solid company with a long history. 1990 was its most profitable year ever. Yes, times were tough, but a new CEO had a vision to turn the ship around. In one of the greatest turnarounds in history, IBM has bounced back and then some. Investors who waited patiently through the hysteria in 1993 were rewarded with returns as high as 900%.

So, Wouldn't You Like to Find (or Invest In) the Next IBM?

We all would. And that's exactly what we search for at Motley Fool Inside Value. History shows us that dirt-cheap dream stocks — like IBM in 1993 — occasionally become available on the market. The Inside Value team snoops around to find underappreciated stocks that Wall Street has unfairly penalized.

Wall Street has a short-term vision. If a company has a couple of quarters of bad earnings, Wall Street immediately responds with a lower stock price. Investors overreact, dumping stocks until they trade far below their intrinsic values.

But as more earning power and cash flow build up in these out-of-favor companies… and the price stays low… that's the time to invest, before Wall Street takes notice.

Finding authentic value stocks is anything but easy. There are hugely profitable companies, but they're priced too high. And there are many once great companies that look cheap — but are actually traps that aren't even worth their new lower price. And in the age of Enron, company insiders have turned disguising their true financial worth into an art form.

So How Do I Find Great Value Stocks?

I constantly search the market for out-of-favor companies. I run numerous stock screens. And then, for the few select companies that make it on to my Watch List, I run a series of metrics — including discounted cash flow (DCF) analysis — to give me my estimate of a company's intrinsic value.

Once I have the fair value, based on my required margin of safety, I sit back… and wait patiently. I wait for the share price to drop below my "Buy Below" price. When I spot such a bargain, I buy.

Then I patiently wait some more, this time for the market to recognize the stock's real value. It usually doesn't take long until the market drives up the stock price to levels at or above my intrinsic value estimate.

In short, I seek good companies at great prices. Having a margin of safety allows me to minimize the risk while aiming for solid returns. Value investing is an intelligent, long-term way to outfox Wall Street and build a foundation of safety.

Best of all value beats every other type of stock across all types of markets hands down.

Historically, Value Stocks Beat The S&P 500 By Nearly 30%

Value stocks historically outperform growth stocks over the long term and with less risk. According to a study by Ibbotson Associates, value stocks returned an average of 11% annually from 1926-2002.

This means that $1,000 invested in 1926 would be worth more than $8,000,000 today.

Get The Value Advantage

Between December 1968 and December 2002, according to another Ibbotson study, value stocks returned 11.0% a year, while growth stocks returned just 8.8%, and the S&P 500 returned 10.2%. At those rates…

• $10,000 invested in growth stocks grew to $175,200
• $10,000 invested in the S&P 500 grew to $270,081
• $10,000 invested in value stocks grew to $346,300

Value stocks beat growth stocks nearly 2-to-1 and trounced the S&P 500 by nearly 30 percent. These are the best-of-the-best value stocks that I recommend in Motley Fool Inside Value.

We're Soundly Beating The Market

So, how are we doing?

Let me put it this way: Inside Value is really paying off for subscribers.

Since we launched our service back in September 2004, we've been soundly beating the market. Even though many of my picks are very recent in a value investor's time frame, we've had great results, including winners such as:

• Mittal Steel — 50% gain in just 8 months
• Intuit — 84% gain in 18 months
• Omnicare — 103% gain in 13 months
• Mastercard — 258% gain in 13 months

We've beaten the S&P 500 every quarter since our service was founded. That's all my stocks, the winners and the losers.

Don't You Think It's Time To Take Control Of Your Own Wealth…

…and invest the way the masters do: by building a solid foundation of real wealth in the most intelligent, most reliable way possible?

Value is the key to investing success. And Inside Value is the best way I know of to help you find strong, well-managed companies that are worth far more than what you're paying—while helping you sleep soundly at night.

That's why I'd like to invite you to…

Take a 30-Day Trial — FREE

Each and every month, Inside Value brings you…

• Two stock picks— I believe are bargains based on their intrinsic value. I reveal all my research, analysis, valuation and risk. I'll also tell you a buy-below price, the intrinsic value per share, and the risk level.
• Watch List — Value stocks that I'm keeping my eye on for possible recommendations down the road
• Performance Chart — My detailed list of our stock returns vs. the S&P 500 (plus, every year you get a complete recap of all our past picks.)
• Exclusive Interviews and Savvy Insight — from some of the top business leaders and value investors in the business. Like George Buckley, the new CEO of 3M who also lead the turnaround at Brunswick Corp; Joel Greenblatt, founder of Gotham Capital and the author of The Little Book that Beats the Market; Wayne Huyard, president of MCI, and dozens of others.

You'll receive your issues delivered in print form via U.S. mail. You can also download the issues online on the day of release, and you'll also receive an e-mail telling you the instant my latest issue is available online.

Plus, Your Subscription Also Includes:

• Frequent issue updates and alerts — Your ticket to breaking opportunity, your defense against impending risk. I'll tell you about changing market conditions, news about our current recommendations, the latest analysis of key industries, and more..
• Access to our Live, Interactive Stock Scorecard to help you keep track of how our suggested picks are performing relative to the S&P 500. It's online and constantly updated throughout the trading day, providing current buy-below prices and intrinsic values for every stock
• Full 24/7 use of our Inside Value subscriber-only website, where you can access our recommendations online; get detailed analysis and updates on all our holdings; read past newsletter issues, updates and bulletins; and much more — at your convenience.
• Online discussions with Value Investing Experts — participate in our online Q&A forums where you can ask questions and get specific answers from my team of analysts
• Discounted Cash Flow Calculator — a fast and easy way to decide, in a matter of a few minutes, whether a company is a great value that's worth your hard-earned money. Find the intrinsic value of a company per share; your margin of safety; and the price-to-value ratio. It's one of the best tools you can use to find your own great investments—or save you from a huge blunder. And it's only available to Inside Value subscribers at our password-protected site.
• Plus, FREE Membership in Inside Value Discussion Boards — this online community includes conversations about every stock I've recommended in the history of my Inside Value service. Where else can you learn about a stock directly from the candid experiences of the company's employees, customers, and investors? No where else but here.

Maximum Gains, Minimum Risk

Invest with a margin of safety. Earn superior returns. And build your financial dreams on a foundation of value. Value investing is the best-kept secret on Wall Street — and the key to life-changing wealth.

Please accept my no-risk offer today. It's one of the best investment decisions you'll make all year.

Sincerely,

Philip Durell
Lead Advisor, Motley Fool Inside Value

Satisfaction Guaranteed!

The Motley Fool stands behind our products and our guarantee. If for any reason you are not 100% satisfied with Inside Value, simply notify us within the first 30 days and you won't pay a cent. Even after your first 30 days, if you change your mind, you will receive a pro-rated refund for the remainder of your subscription term.