"Price is what you pay. Value is what you get."

In this quote, Warren Buffet eloquently states exactly what it means to be a value investor.

When you buy a stock, you are buying ownership of a business with real assets, both tangible and intangible. These don't change just because the market is moody, or the Fed deciding not cut rates by an additional 25 basis points. As long as the fundamentals of your business are strong, the daily price changes in the markets do not alter the value of what you own.

Which makes this so hard to do is that the pace of business remains much slower than the pace of the stock market. You get new information about a stock price every minute, but accurate information of a business's performance comes every quarter. This huge discrepancy causes most investors to overvalue the wrong things in the market. The good news is that it will provide you opportunities to profit if you know where to look.

If you want to sell your house, and someone low balls an offer, you will reject it because it isn't worth the value of your assets. You would wait until the right fair offer comes along so you get the fair price. If the neighborhood starts to deteriorate, your house would be lower in value even if someone offers a higher price, so you should sell. Stock picking should be no different.

The truth is that most stock movements don't reflect the changes in the discounted future cash flows a business bring in, but for a number of irrelevant reasons like sentiment. Occasionally price drops could signal deteriorating fundamentals which have to be watched out for, but more often than not, it is just noise.

Thinking about your stocks as ownership of business is essential for getting through volatile changes. Remember that price movements mostly are the results of irrational behavior, and you should be valuating a business by the quality of its fundamentals. It might be painful to see the price decline in the short run, but if your analysis is correct, the market will reward you given enough time.