In his book The Most Important Thing, Howard Marks, the legendary value investor, wrote: “Large amounts of money aren’t made by buying what everybody likes. They’re made by buying what everybody underestimates.”

The key to investment is not just trying to work out how over or undervalued a company’s share price may be, but also identify why this mispricing might be occurring. In other words, ask “what is the market missing?”. Understanding this allows an investor to see the path to how the gap might close and therefore be more efficient by focusing analysis on the issues that matter.