10-year

10-Year Anniversary Promotion (20% off)

Join GuruFocus Premium Membership Now for Only $279/Year

Once a decade discount

Save up to $500 on Global Membership.

Don't Miss It !

Free 7-day Trial
All Articles and Columns »

Book Review: 'The Little Book of Value Investing'

November 05, 2012 | About:
If you ask me who comes to mind when I think about classical value investing a la Benjamin Graham, two names pop up immediately: Walter Schloss and Tweedy Browne.

"The Little Book Of Value Investing" written by Christopher Browne is probably the best book in town about classical value investing Benjamin Graham style, apart from Graham's own books. Moreover, unlike some other books, in the Little Book series which are watered down versions of the authors' other books, this book by value investing legend Christopher Browne stands on its own.

Takeaways

- Buy stocks on sale just like how you will buy everything else in life.

- Graham began as a credit analyst.

- Value a stock like an investment banker using recent acquisitions of similar companies in the same industry as a guide.

(Comment: think Mario Gabelli's Private Market Value)

- Principles of value investing: intrinsic value, margin of safety, companies with low debt, diversification (min: 10 stocks)

- Low P/E equals low-expectation stocks equals higher chance of positive surprises and upside for low P/E stocks.

- Investing globally increases investment opportunities. Stick to stable economies with stable governments.

- Bargains are found in the new lows list.

In Closing

A recent interview of William Browne in the book "The Value Investors: Lessons from the World's Top Fund Managers" (which I also reviewed) seemed to suggest a shift in the value investing philosophy. Browne was quoted as saying he would prefer a Johnnie Walker investment with a competitive edge to a net-net paper company now, although he emphasized that the firm's investment philosophy remains intact and they still use the statistical approach to search for stocks.

I would appreciate comments from readers who have read both books.

Also see my takeaways from the book "The Value Investors: Lessons from the World's Top Fund Managers" here.

About the author:

Mark Lin
Mark is a private value investor and runs the Cheapskate Investing website which borrows from the wisdom of value investing giants, using a systematic quantitative screening approach to filter the global stock markets for cheap deep-value cigar-butts and wide-moat compounders. He is also a regular contributor to various value investing communities.

Visit Mark Lin's Website


Rating: 3.5/5 (6 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK