All Aboard the Pain Train - Why Value Will Always Work Even When it Occasionally Eats Dirt

Today is Friday, September 25th 2026.

Cash production is one of the major reasons why value investing works over the long-term and doesn't require a bigger fool to purchase your shares. For example, if you bought a company at 100x earnings and it is only growing at 10% per year, it would be decades before you got your initial investment back in cash. Unless, of course, you convince someone else to buy it at 150x earnings. Eventually, the music stops and valuations must be supported by fundamentals.

The hard part about being a value investor is the math is typically most compelling when value investing is eating dirt. It is psychologically difficult to buy a company at 5x earnings when it was trading at 7x earnings just a few weeks ago and has lost over 10% of its value.

What didn't work?

Despite the compelling math I just mentioned, investors are doing exactly that, shunning value stocks for momentum. The pain has continued for several weeks now, but if you look out 12 to 18 months, I think value is going to come roaring back into favor. The cash produced at these companies will become too big to ignore, repurchases will eat up too many shares, and dividends will be too high. Sometimes, buying what didn't work leads you to great returns. I believe now is one of those times.

Next up is On the Hunting Trail for Value

It is a smorgasbord of opportunities out there from consumer discretionary, consumer staples, materials, and more.

Wrapping Up:

The rally in high beta stocks continued this week, while disciplined value investors should be ignoring the pain and stuffing portfolios with opportunities in the forgotten low volatility names. Value investing works long term because there are no bigger fools required! Pain points like high oil and gas prices make for good places to look for long-term returns. Thanks for listening and have a great weekend.

Website: https://frankfunds.com

Brian X Account: https://x.com/bfrankvalue

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