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The three most important words to a true value investor are
"margin of safety".
Most value fund managers are accountants and business valuators by training. Suppose your fund manager dissects the financial statements of a company, examines the competition, understands the business and the environment in which the business operates and concludes that
a) the business has an intrinsic value of $10 per share
b) the intrinsic value is growing by 10% per year.
A value manager does not buy the shares at $10 or even for $9 and certainly not for $11 - he seeks to buy the shares for $7 or less, thus establishing a 30% margin of safety.
"But why are the shares selling for only $7 when they are really worth $10?" you ask. There may be many reasons, but the broad answer is that many other investors are worried about the company or have missed one or more important facts about it. For example, many money managers do not do their own research on companies they own in their fund because they are too busy trading them and studying economic factors.
Detailed, tedious work: Value managers spend all their time analyzing the details of companies before they invest the first dollar, and they are quite slow to trade shares, often selling only 20% of their portfolio in an average year whereas many fund managers trade 100% or more per year.
A yucky portfolio: Value managers seek out the points of maximum pessimism in the world and look for unusually good bargains while others are furiously selling their shares of good businesses at a price lower than the intrinsic value. For example, they might sift through the telecom companies of the world after the big market decline of 2000-2002 and identify a few companies which are not only surviving but taking over the market share of weaker competitors.
What to expect: It's not sexy. Expect a true value fund to be average during the years when the market does well and expect them to be better than average by protecting capital when the broad markets decline. My favorite analogy is "it's boring and it works". To chat about the style of your fund managers just contact the office.
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