Quarterly Journal of Austrian Economics

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Value Investing's Compatibility with Austrian Economics — Truth or Myth?

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Tags SubjectivismValue and Exchange

07/13/2017David J. RappMichael OlbrichChristoph Venitz

Quarterly Journal of Austrian Economics 20, no. 1 (Spring 2017)

ABSTRACT: Within the Austrian economists’ community, value investing is characterized as a useful investment strategy, and one that is in line with Austrian economics, in particular Austrian value theory. In fact, value investing shares some basic findings with Austrian value theory, especially the crucial distinction between values and prices. However, value investing also contradicts some fundamentals of Austrian economics. Therefore, the authors argue that value investing’s seeming compatibility with Austrian economics must be characterized as a myth. The aim of this article is to illustrate what makes value investing incompatible with Austrian economics and, hence, to terminate this myth.

KEYWORDS: Value investing, Austrian economics, value theory, intrinsic
value, subjectivism
JEL CLASSIFICATION: B31, B53, D46, D52, G11, G32
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Cite This Article

Rapp, David J., Michael Olbrich, and Christoph Venitz, "Value Investing's Compatibility with Austrian Economics — Truth or Myth?", Quarterly Journal of Austrian Economics 20, no. 1 (Spring 2017): 3–28

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