For the past few years, I have been doing value investing practice on an ad hoc basis. I read news & investment message board, follow the ones I deem interesting, do some my own researches & make decisions on building positions. So far, overall I have more hits than misses and my personal investment fund’s performance has been in line with S&P 500, even though I usually keep 30-50% cash at hand due to lack of opportunities (except for 2013 during which year the index ran up 30% and the cash drag bit me badly). Clearly, the cash drag was my problem. I also know that it is mainly because of the ineffectiveness of sourcing potential opportunities, given that my spare time resources are limited. To solve this issue, I have to have a formal investment process.

Based on my current knowledge, a typical value investing process would look like this:

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