The highest return we have tested came from the oldest idea in investing. Just buy what is cheap, six ways at once.

Score every stock on price to book, price to earnings, price to sales, earnings yield, cash flow yield and dividend yield, all at once, and buy the thirty cheapest. That is the whole method. It made about 30% a year against the market's 13.9%, turning ₹10 lakh into roughly ₹1.1 crore. Here is the quiet surprise: when we tested the same composite with a momentum filter added, in our Trending Value piece, it made less. On this decade of Indian data, refining pure value only dulled it.

Cheap beat dear, cleanly and hugely

The ranking worked, and it worked hard. Sort the market into ten buckets by the composite score and the returns climb almost unbroken from the expensive end to the cheap, a rank correlation of about −0.89. This is deep value at its most convincing: in a decade that rewarded India's unloved cyclicals, buying them by the basketful, and buying the very cheapest hardest, paid enormously.

And the bill was as large as the reward

Nothing this powerful comes free. To collect that 30% you had to hold through a fall of about 69% from the peak, twice what the index gave up, in a basket of deeply out of favour materials and energy names. The highest return in the series and one of its deepest drawdowns are the same strategy. This is the raw, uncushioned version of value, and almost nobody can hold the raw version.

A basket of the unwanted, mostly very small

Six sophisticated ratios led, as cheapness always does, to the unglamorous edge of the market: Oil and Natural Gas, Gujarat Narmada, GHCL, Vedanta, a portfolio of commodity and energy cyclicals, and overwhelmingly small ones. This is the same corner of the market a single cheapness number finds. The composite did not change where value lives. It just bought it more aggressively.

The most return, for the least comfort

The Value Composite is a reminder that the highest returning idea is rarely the easiest to own. It beat the market by a huge margin and its ranking sorted beautifully, so the edge is as real as any we have found. But it earned that by buying the market's most hated stocks and holding them through a near 70% collapse, and by resisting every urge to make it safer, an urge that, when we indulged it with momentum, only cost return. Pure value works. The question is never whether it works, but whether you could survive owning it, which is exactly the thing to settle before you start.

So we took it to Krest, and ran it through the whole test.