Recently, U.S. stock markets have experienced significant volatility. This brings to mind Warren Buffett's famous advice: "Be fearful when others are greedy, and greedy when others are fearful." Market panic can present opportunities for value investors, as value investing is about buying when prices are below intrinsic value, rather than predicting short-term market fluctuations. Of course, selling might be necessary when prices far exceed value.

Today, I want to discuss value investing, not to predict short-term market movements. Value investing is often seen as the "Bible" of investing, with legends like Warren Buffett and Charlie Munger exemplifying its success. The principle seems simple: buy quality companies at reasonable prices and hold them long-term. Yet, few truly practice this strategy.

Why is value investing considered a game for the wealthy, while most ordinary people struggle with it? The issue isn't intelligence but differences in understanding, resources, and mindset. Here are seven barriers that show why value investing is for the few:

1. Lack of Long-term Idle Funds

Buffett famously said, "If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes." 

For example, he bought $1 billion in Coca-Cola shares in 1988 and has held them for 37 years, reaping over $30 billion in profits. 

However, ordinary investors often have little left after essential expenses like mortgages and education, making it hard to hold investments long-term. Wealthy investors can withstand short-term losses without lifestyle impacts, supporting their long-term approach.

2. Inability to Withstand Price Fluctuations

Graham compared the market to "Mr. Market," whose mood swings are normal. Value investors thrive by being greedy when others are fearful and vice versa. 

In 1973, as the "Nifty Fifty" bubble burst, Buffett bought Washington Post shares, holding them for 30 years and earning over 100 times his investment. His calmness was due to long-term funds and strong cash flow. 

In contrast, ordinary investors may panic at a 20% drop, with many forced to sell due to leverage.

3. Differences in Cash Flow

Wealthy individuals enjoy continuous cash flow from dividends, rent, and business profits. For instance, Buffett's investment in See's Candies has yielded over $1 billion in dividends over 40 years. Ordinary investors rely mainly on salaries, limiting their ability to invest continuously.

4. Willingness to Learn

Value investing requires deep business understanding and continuous learning. 

Buffett read every investment book in his local library by age 19, while Munger is known for his extensive reading. Wealthy individuals invest in knowledge, while many ordinary people stop learning after school, preferring to follow market trends and tips rather than studying company fundamentals.

5. Misunderstanding Luck vs. Logic

Many seek quick riches in the stock market, treating it like a casino. Research shows that frequent traders earn 6.2% less annually than the market average, while long-term holders fare better. Wealthy investors rely on logic, not luck, as shown by Buffett's lifelong investment in Coca-Cola based on its strong business model.

6. Lack of Business Mindset

Value investing is about understanding a company's business model and sharing in its growth. Many ordinary investors, lacking business experience, treat stocks as gambling chips.

7. Bias Against Index Funds

Buffett advised investing 90% of his estate in an S&P 500 index fund. 

Over 50 years, the S&P 500 has returned an average of 9.8% annually, outperforming most active funds. While institutions understand the difficulty of beating the market, individual investors often overestimate their stock-picking abilities.

Wealth is fundamentally a difference in understanding. Value investing isn't exclusive to the wealthy, but ordinary people need to break mental barriers and adopt a more rational, stable investment approach.

To embrace value investing, start by shifting your mindset away from quick riches. Understand that buying stocks means buying companies. Build a knowledge base by reading classics like "The Intelligent Investor" and "Poor Charlie's Almanack." Learn to read financial reports and understand key metrics like ROE and free cash flow.

Finally, practice with "risk-free" money that won't impact your lifestyle if lost. Focus on a few industries you know well, avoid chasing trends, and adhere to investment discipline. Buy when prices are low and sell when fundamentals deteriorate or prices exceed intrinsic value.

If you feel limited, consider regular investments in index funds like the S&P 500 ETF. They help solve stock selection, risk diversification, and behavioral challenges.

Value investing tests patience, discipline, and the courage to overcome human weaknesses. It won't make you rich overnight, but it significantly increases the certainty of wealth growth, guiding you through the long nights of investing with an unwavering beacon.