Value investing
Here you are relying on your skill and judgement to discover where the market got its calculations wrong.
That means comparing the company's stock market valuation - the number of shares in issue multiplied by the price - with the value of its assets, or intrinsic value.
In practice that means identifying companies with low price to earnings ratios (P/Es).
The problem comes when assessing the company's intrinsic value. You will probably look at the firm's assets, earnings, cashflow and dividends.
But investment professionals are divided on what else you should add to the mix. Some only look at present assets and don't place any value on future growth.
Other value investors base strategies completely around the estimation of future growth and cash flows.
Despite the different methodologies, it all comes back to trying to buy something for less than its worth. It renders value investing at best an inexact science and at worst nothing more than guestimology.