Many people who have witnessed the almost inexplicable share price trajectory of some companies on the JSE are wondering whether value investing is dead. I firmly believe it's alive and well and will continue to lead to good outcomes for its practitioners and investors.Although a value investor's returns will look very different from those of the market from time to time, value investing still outperforms in the long run.But others have shown less conviction. In recent years, we've seen previous "value investors" changing strategy, swapping to a focus on "quality" stocks that have delivered stronger performances in recent times, irrespective of the fact that they don't necessarily represent what you'd consider real value opportunities.This isn't abnormal. Over the years, various "value managers" and their strategies have fallen out of favour from time to time. But it is unfortunate, because the reality is that over the long term, value investing has been proven to outperform other investment approaches.The FTSE/JSE Value Index underperformed the JSE Overall Index from its inception in 2004 to the end of the last bull market in 2007. Then, during the financial crisis until the end of 2011, the value index significantly outperformed the market.From 2011, it switched again - and for the past three years, the value index has severely underperformed the market and this trend has gathered pace.But the fact is, all the studies around the world show that value investing has outperformed other forms of investing over time. So, it is an anomaly that the South African value index has underperformed the overall market here since 2004.Of course, one can understand why the focus on "quality investing" has become so popular in recent times.Many investors believe they can guard against underperformance by investing in so-called "quality" - even if these stocks are very popular and very expensive. Their argument is that these stocks will provide an element of safety as they have the ability to grow their earnings even in uncertain times.But right now, we believe many of these "safe" businesses are very expensive. By putting your money in this basket right now, you are risking a permanent loss of capital.We think stocks such as SABMiller, British American Tobacco, Mediclinic and Aspen fall into this category. These are all great businesses - they're just not great investments now.In South Africa, we see the overall market as expensive, and that a huge valuation discrepancy has appeared over the past two and a half years.Here's a tangible example of what this means for investors: back in 2007, resources companies such as Anglo American, BHP Billiton and others were incredibly expensive compared to the rest of the market, trading at about twice the price-to-book valuation of industrial stocks.Today, resources companies trade at about 30% of the value of industrial companies.This tells us the market expects the tough conditions for the resources companies to persist for a very long time. But hte market also expects the good conditions being experienced by industrial companies - mostly those that don't operate primarily in South Africa but are listed on the JSE - to continue.We believe investors are paying too much for the safety of knowing that these companies don't operate in South Africa.It is an unpopular view, but we find ourselves drawn towards companies priced for continued bad performance where all the obvious optics around these companies are negative. This includes the general miners, the platinum companies, and construction firms.The current market, which has led to a number of value investors falling by the wayside, is therefore creating an opportunity for us to construct portfolios with assets that are incredibly cheap within a market that is generally overvalued.Investors who follow this approach, we think, will limit their downside risk, while increasing their potential upside.Van Niekerk is CEO of RECM..