My understanding of what I’ve read by Graham and others is that you have to be able to largely ignore the herd mentality of humans (which is a successful behaviour for surviving — though not for really prospering).

You have to be able to watch have faith in your valuations. If, in the short term, the market tanks but the fundamentals don’t, you have to have the resolve not to panic sell (indeed, if the market tanks, your value stocks should be even more value, so you should buy even more of them). Likewise, if everyone is getting into “The Next Big Thing” (e.g. tech bubble) or the market is getting carried away with itself for no good reason generally, you have to at least avoid buying into that, and possibly even sell what you have if it’s going beyond its true value and look for new bargains instead. Of course, you may take a long-term hold approach too, which would also have its merits.

There are plenty of really, really smart people out there who get undone by their emotions. I believe Isaac Newton is a classic example. Didn’t he buy into the South Sea Bubble early, make a ton of money, cash out, buy back in at a higher price, and do his shirt in the inevitable crash?

Adrian it could be great if you could do a post on more of the specifics you look for as a value investor in either a stock or a business.