The paradox is you're putting a dollar value on something that doesn't need to be measured by dollars. Deep value comes from recognizing companies with large economic mots, excellent leadership, and a market price which does not reflect these mentioned "values". Price alone should not be the only thing signifying value.
Cutten, I think you hit the nail on the head WRT finding a value in the marketplace. If you were only allowed to trade one security, then waiting for 50% would be crazy, because it might not ever happen. Since we have a universe of stocks to choose from, the 50% player will be satisfied that at any given time, he can FIND a 50% discounted stock to his assesment of fair value. To someone else, that same stock me be OVER valued. Its all speculation in the end. I am by NO means a value investor, I am a pure mechanical trader. And I have struggled many many mental hours over this paradox on a micro-frame. My system signals a buy limit at price $40. I am filled. Then the stock goes 40.01 bid. I was unwilling to buy at this very price just a second ago, in effect, I was saying that I REFUSE to be long at 40.01. Yet here I am, 2 seconds later, presented w/ the same scenario and I am saying I WANT TO REMAIN LONG. In the end, all I care about is making money. Since my system is making money, I choose to ignore the paradox. Perhaps you can rationalize my scenario by saying I will ONLY be long at $40.01 *IF THE PRICE TOUCHES $40 FIRST*, because now I am "in on the upswing". Its all B.S. I just know from experience and back-testing that if I buy at $40, I have a +EV gamble given my setup and exit rules. Perhaps thats all the value investor is doing too. He knows that buying at $40 is +EV given his life experience and exit rules (stated or implied). He isn't sure about an entry at $79.99.