"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.
- 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.
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.