Value Investor

Adrian is a keen disciple of the ‘Value Investing’ school of investment based on the Graham & Dodd approach and summarised in their classic text ‘Security Analysis’ and made famous by Warren Buffett.

The Buffett approach involves finding top quality companies with an Economic Moat to invest in and then waiting patiently until Mr Market undervalues the company and gives the patient investor a substantial Margin of Safety. Once a top quality company is available at an excellent price the strategy is to buy a substantial shareholding. Value investors argue that having a few top quality companies in their portfolio is less risky than wide diversification.

The approach has worked for many decades most famously for Warren Buffett and Charlie Munger at Berkshire Hathaway, but also consistently for a large number of disciples referred to by Warren Buffett as ‘The Super Investors of Graham-and-Doddsville’.

Surprisingly this approach has not become as extensively practiced by professional fund managers, as its results would suggest it should. Warren Buffett pointed out “I can only tell you that the secret has been out for 50 years, ever since Ben Graham and Dave Dodd wrote Security Analysis, yet I have seen no trend toward value investing in the 35 years I’ve practiced it. There seems to be some perverse human characteristic that likes to make easy things difficult. The academic world, if anything, has actually backed away from the teaching of value investing over the last 30 years. It’s likely to continue that way. Ships will sail around the world but the Flat Earth Society will flourish”.

Adrian is endeavouring to follow in the tracks of these ‘Super Investors’….

Recommended Reading: 

Damn Right! – Charlie Munger –

Poor Charlie’s Almanack – Charlie Munger –

The Education of a Value Investor – Guy Spier –

Unshakeable: Your Guide to Financial Freedom – Tony Robbins –

The Most important Thing Illuminated

The Great Minds of Investing – William Green –

Invest in the Best – Applying the principles of Warren Buffett for long-term investing success – Keith Ashworth-Lord –

Margin of Safety: Risk-Averse Value Investing of the thoughtful Investor – Seth A Klarman –

Notifiable Shareholdings: