"You can purchase the best stock in the world, but if you buy it at a lofty premium, it is a bad investment.
Vice versa, the stock could be the worst company in the world, but if you buy it at such a cheap price that it cannot go down any further, it may just turn out to be your best investment."
"Consultants in the investment world work so hard to pigeon hole investors that I think even the word “value” is misconstrued to just mean low multiples of book value or earnings. Even Ben Graham early on talked about how growth is of great value, it's just riskier and more difficult to quantify . I'm always amazed that someone would say they weren't a value investor—I wouldn't admit it even if I wasn't . It just seems silly to think about investing any other way .”
—Thomas Gayner , Markel Corp.
"Do those things as an analyst that you know you can do well , and only those things. If you can beat the market by charts, by astrology , or by some rare and valuable gift of your own , then that's the row you should hoe. If you're good at picking the stocks most likely to succeed in the next twelve months, base your work on the endeavor . If you can foretell the next important development in the economy , or in the technology , or in consumers' preferences, and gauge its consequences for various equity values, then concentrate on that particular activity . But in each case you must prove to yourself by honest , no-bluffing self -examination , and by continuous testing of performance, that you have what it takes to produce worth while results.
If you believe—as I have always believed—that the value approach is inherently sound, workable, and profitable, then devote yourself to that principle. Stick to it , and don't be led astray by Wall Street's fashions, its illusions, and its constant chase after the fast dollar . Let me emphasize that it does not take a genius or even a superior talent to be successful as a value analyst . What it needs is, first , reasonable good intelligence; second, sound principles of operation ; third, and most important , firmness of character.”
—Benjamin Graham, Common Sense Investing
"In a rising market , every one makes money and a value philosophy is unnecessary . But because there is no certain way to predict what the market will do, one must follow a value philosophy at all times. By controlling risk and limiting loss through extensive fundamental analysis, strict discipline, and endless patience, value investors can expect good results with limited downside. You may not get rich quick, but you will keep what you have, and if the future of value investing resembles its past , you are likely to get rich slowly . As investment strategies go, this is the most that any reason able investor can hope for.”
—Seth Klarman, The Baupost Group"
"When you look back as far as 80 years for which we have data, rather than moving about without rhyme or reason , the stock market methodically rewards certain investment strategies while punishing others. There's no question the value-based strategies that work over long periods of time don't work all the time, but history shows that after what turnout to be relatively brief periods when other things seem to be all that matter , the market reasserts its preference for value, often with ferocity . My basic premise is that given all that , investors can do much better than the market if they consistently use time-tested strategies that are based on sensible, rational , value-based methods for selecting stocks.”
—James O 'Shaughnessy, O 'Shaughnessy Asset Management"
"Price is perhaps the single most important criterion in sound investment decision -making. Every security or asset is a “buy ” at one price, a “hold” at a higher price, and a “sell ” at some still higher price. Yet most investors in all asset classes love simplicity , rosy out looks, and the prospect of smooth sailing. They prefer what is performing well to what has recently lagged, often regardless of price. They prefer full buildings and trophy properties to fixer-uppers that need to be filled, even though empty or unloved buildings may be the far more compelling, and even safer , investments. Because investors are not usually penalized for adhering to conventional practices, doing so is the less professionally risky strategy , even though it virtually guarantees against superior performance.”
—Seth Klarman, The Baupost Group"
"The person with the highest probability of out performing over time is the one who knows how to value companies and buys at a significant discount from that . I've heard for 45 years why all these other things have become more important . You know what? It's all crap.”
—Robert Olstein, Olstein Capital Management
"People should be highly skeptical of anyone's, including their own , ability to predict the future, and instead pursue strategies that can survive what ever may occur . [Nassim] Taleb advises us to be “anti-fragile” – i.e. , to embrace those elements that benefit from volatility , variability , stress and disorder. This is exactly what we strive to do.”
—Seth Klarman, The Baupost Group
"Whenever Ben Graham was asked what he thought would happen to the economy or to company X's or Y's profits, he always used to deadpan , “The future is uncertain . ” That's precisely why there's a need for a margin of safety in investing, which is more relevant today than ever. “
—Jean-Marie Eveillard, First Eagle Funds
"Long-term-oriented value investors have greater scope to produce superior risk-adjusted returns when the seas are rocky . The valid response when there's chop is to focus on the end destination —what value investors call intrinsic value—and not worry about whether the next wave is going to push the boat up or down . If you don't invest with a very clear notion of underlying value, how do you do it? Nothing else makes sense. Your ability to maintain focus on the long term comes from experience. You go through a couple cycles where every body else is screaming at you not to try to catch a falling knife, and then when you do so and make some money , it does wonders for you . . . and for your ability to do it next time. “
—Howard Marks, Oaktree Capital
"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. Avoiding mistakes, resisting market fads, and focusing on allocating capital into ideas that are highly likely to produce satisfactory returns and that offer a margin of safety against permanent capital loss – these are the dominant themes of the value investing approach . Contrary to how it sounds, these elements don't make value investing easier than other approaches. In fact , cultivating the discipline to avoid unproductive decisions, refining the craft of valuing businesses and assessing risk, and developing the emotional and mental equilibrium required to think independently in a field in which there is tremendous pressure to conform requires constant diligence and effort .”
—Zeke Ashton, Centaur Capital
“Our definition of value comes directly from the finance textbooks, which define value for any investment as the present value of the future free cash flows of that investment. You will not find value defined in terms of low P/E [price-to-earnings] or low price–to–cash flow in the finance literature. What you find is that practicing investors use those metrics as a proxy for potential bargain-priced stocks. Sometimes they are and sometimes they aren’t.”
~ Bill Miller
"Our entire process is rooted in Ben Graham's simple philosophical framework for investing. He believed there were two values for every stock, the first being the current market price, and the second what the share would be worth if the entire company were acquired by a knowledgeable buyer or if the assets were liquidated, the liabilities paid off and the proceeds paid to stockholders. He called that the intrinsic value and argued that the time to buy was when there was a large spread between the current price and that value, and the time to sell was when that spread was narrow.
Over time we've developed different ways of applying that —by valuing income streams rather than just assets, by calculating private market values, by investing internationally —but the essence of what we do has remained consistent . Our work everyday is essentially directed at valuing what businesses are worth .
—Will Browne, Tweedy, Browne Co."
"Value investors typically :
“All sensible investing is value investing.”
Berkshire Hathaway's Vice Chairman Charlie Munger
