Value does not equal price : When you go to buy new shoes, you're not going to automatically buy the most expensive pair and assume they must be better because they cost more. If anything, you'll probably try on a few different types at a few different prices, and get the best quality shoe at the lowest price. Value investing is all about getting good investments at low prices.
Good companies do better than average over the long term A company that makes good products, is well managed, earns a profit, and has durable advantages over their competitors (brand names, patents, networks, exclusive monopolies etc.) should do better than a company that is cranking out products that are exactly like its competition. If you can focus your investing in these types of companies, then you should be able to beat the market.
Stock prices are always wrong : The price of a stock is based on what the sellers are currently willing to sell it for, and what the buyers are currently willing to pay. During any given day, these prices will go up and down hundreds of times for no real reason. Over months and years, they can shoot way up or bottom out, especially if investors are overly excited or scared. Also, there are day traders who do not care if something is expensive or cheap, they just look at whether people are buying or selling, and try to make a few dollars over a few hours by quickly buying or selling. So overall, there are many times when a good stock will be sold at a low price, or a bad stock will be sold for a high price. If you wait and only buy stocks for good companies when they are on sale, it will be less likely that you'll lose money.
You know more than Wall Street about some things Peter Lynch explains this well in "One Up on Wall Street". Wall Street investors aren't everywhere at once, they are human beings with emotions. So they aren't always going to recognize great opportunities, and even if they do, they may not have the resources to take advantage. During every bubble we've had, a large number of Wall Street investors went along and lost big.
Invest in what you understand : If you don't understand something, you're far more likely to lose money on it.
My approach: Buy good companies when they're on sale, and then wait for them to go up in value without worrying too much.