Perhaps one the most studied investing strategy is value investing. Value investing is an investment style proposed by successful investors, such as Warren Buffet, Charles Munger or Willian Ruane, as well as by well-known scholars, such as Basu. The core idea of value investing is that the price earnings ratio (P/E) of a company is a predictor of the future performance of the stocks with companies with low P/E outperforming. Benjamin Graham and David Dood are credited as one of the first proponents of such strategy. The concept of value investing has been frequently mentioned as an argument against the efficient market hypothesis. In its most strict version, the market hypothesis entails that all information, both public and nonpublic, is contained in security prices and hence there is no way for an investor to consistently outperform the market. Value investing suggests that the P/E of a stock can be used as a predictor of future performance, potentially allowing a skilled investor to outperform. Graham dedicates an entire chapter of his book to differentiating between investment and speculation with the author considering that investing requires adhering to a set of rules (value investment rules) and considering most other approaches of investment as speculation. This is perhaps one of the oldest systematic approaches to investment for the modern capital markets. Nevertheless, it should be mentioned that even under the relatively rigorous set of rules describing value investment there is some degree of subjectivity with Hanson and Dhanuka describing this approach of investment as a combination of science and art. While there is no small amount of value investment critics, it is perhaps one of the investment techniques with stronger theoretical and empirical backing. Some relatively recent articles such as (Bird and Gerlach 2003) show empirical support for value investing in the U.S., U.K., and Australia.