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The biggest issue in value investing is the "realization of value" problem. It may take many years to realize the tremendous value you have discovered that no one else notices yet.
DEWY is an electrical contractor supply firm in NJ. They own land well in excess of their market value.
It came to my attention in 1996 when it was selling for $1 a share. Land values indicated it shoudl be over $2 a share at that time.
It now sells for $3.60 which is still a 50% discount to the value of the land holdings at current prices.
DEWY
http://finance.yahoo.com/q?s=DEWY.OB
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This is exactly true. It's why a good value investor shouldn't buy into a business unless a) it has a clearly defined catalyst that will unlock the value, or b) the business's intrinsic value is growing at a strong rate over time, so you will benefit from the growth while you wait for a narrowing of the value gap.
Exceptions can be buying large groups of undervalued businesses as a portfolio, which is what Ben Graham's mechanical formulas would do, and how Walter Schloss has succeeded for the last 50+ years. Some will close their value gaps, some won't, but overall the results can be good if you buy cheaply enough.
BTW, by your account Dewey's return would be about 15% a year. That kicks the S&P 500's a**!