Value Ideas Blog
Quick Book Review & Quotes: “Art of Value Investing”
The book: ” The Art of Investing – How the wold’s best Investors beat the market” written by John Heins and Whitney Tilson, who also publish the Valueinvestorinsight, is a collection of value investing quotes by more or less famous investors. Overall, the book is well written and easy to read, but the price of the book is around 25 Euro which, in my mind, is quiet expensive for a collection of quotes. According to the authors the best investors can articulate in a clear and focused way what they’re looking for, why they’re looking for it and where they’re trying to find it. They have a well-defined and consistently applied process for research and analysis. Furthermore value investors understand the micro factors, such as a company’s competitive advantages and only act when they are able to draw a conclusion which incorporate a margin of safety. Because I stick with the quote of Richard Pzena, here are the best quotes of the book:   Charlie Munger: “All sensible investing is value investing”   Zeke Ashton: “I’ve heard it said many times that value investing is not as much about doing smart things as it is about not doing dumb things”   Lee Atzil: “The first thing is by making sure the potential downside is a small fraction of the upside. That means we avoid stocks that are cheap on an equity-value basis primarily because there’s a mountain of debt. The second important way to have a margin of safety is to have more than one way to win, through earnings growth multiples expansion or free options in the business.”   Seth Klarman: “People should be highly sceptical of anyone’s including their own, ability to predict the future, and instead pursue strategies that can survive whatever may occur.”   read more
This post originates by a comment of reader S., who has mentioned the book “the Outsiders, Eight unconventional CEOs”. Actually the book review was  my first blog post which I ever had accomplished, and MMI was so kind to publish it in his outstanding blog. As this book is really worth reading here is the old post again with some extensions which I have learnt in the year after having read the book. Especially I could recommend the links at the end of the post which will help you to achieve a deeper understanding of “Outsider thinking”. Perhaps William N. Thorndike Jr. itself is an outsider, he is the founder and managing general partner of Housatonic Partners a private equity firm. After Motley Fool Housatonic Partners has returned around 25% in the last 20 years, the approach of Thorndike is to spend 30% of his research time on the CEO and management of a company,   So first of all, let’s start with the book review and the wrap up of the idea. read more
Today we want to take a look at one of the latest books that we have read, namely “The Investment Checklist; The Art of In-Depth Research” which is written by Michael Shearn. The book is around 330 pages long, well written in and quite easy to understand. As a rating we would suggest 4.5 of 5 stars.   The book has 11 chapters and deals with the systematization of the investment process. According to the author this systematization is necessary because of the fact that investors make the most mistakes when they rush into an investment idea without doing the proper work to understand the value of a business. The investor is betting in probabilities that certain assumptions will work out, instead of basing their investment decision on real analysis. The key to be better investor is to truly understand the value of a business and where it creates its value  by answering questions about it. read more
Today we want to take a look at one of the latest books that we have read, namely “What’s behind the Numbers; A Guide to Exposing Financial Chicanery and Avoiding Huge Losses in your Portfolio” which is written by John Del Vecchio and Tom Jacobs. The book is around 265 pages long, well written in a fairly American style and quite easy to understand. As a rating we would suggest 4 of 5 stars.   The book opens with the sentence: “Show me where I’m going to die, so I don’t go there” and that is actually what the book is about. The management of public companies faces enormous pressure to beat Wall Street guidance by a penny and make things look better than they are and therefore weaken their earning quality. “What’s behind the Numbers” tries to show how one can detect weak earning quality and where the management of a company most frequently tries to hide the information that shows their chicanery. read more