Value investing is an investment tactic where stocks are selected which appear to trade for less than their intrinsic, or book values. Value investors actively seek out the stocks they believe the market has undervalued. Investors who use this strategy think the market overreacts to good and bad news, resulting in stock price movements which do not correspond to a company's long-term fundamentals. This overreaction allows the value investor to profit by buying stocks at a deflated price.