The Little Book of Value Investing (Little Books. Big Profits) (Hardcover)

~ (Author), Roger Lowenstein (Foreword)
Key Phrases: investing store, falling knives, insider buying, United States, Wall Street, Warren Buffett (more...)

Editorial Reviews

From Publishers Weekly

Browne's experience as managing director of investment firm Tweedy, Browne provides examples to support his lessons on value investing, a method of buying stocks that have fallen in price to earn the best return over the long term. Browne uses examples from successful investors (such as Benjamin Graham, Walter Schloss and Warren Buffet) to illustrate that value investing is the best way to make the most of one's investments. The zingy chapters titles ("Buy Stocks like Steaks...On Sale," "Around the World with 80 Stocks" and "Sifting out the Fool's Gold") are demonstrative of his penchant for metaphors, parables and anecdotes, which make this book as entertaining as it is informative. Browne's short chapters detail useful and time-tested concepts, including the significance of book value, which foreign economies are worth investing in, and who to watch for investment ideas. With detailed advice and thorough explanations, this book should prove an asset to both professional and amateur investors.
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Review

"Fools would be well-served to place The Little Book of Value Investing on their holiday shopping lists". (Fool.com, December 12, 2006)

"sharply written...gets you fired up about buying stocks" (USA Today, December 4, 2006)

"If you are a value investor by temperament, you will (or should) find a lot that is persuasive in what Christopher Browne has to say about the craft of value investing in a delightful new book out this autumn...It is nicely written and utterly persuasive if long-term investment success is what you are after and your temperament is equipped to handle the psychological pressures of making non-consensus investments." (The Independent, November 2006)

"elegant new treatise on the art of value investing. . ." (Financial Times (UK), October 30, 2006)

"...easily digestible and shortish treatise for anyone who wants to try out this particular investment strategy".  (The Wall Street Journal, October 10, 2006)

"After 37 years of practicing what Graham preached, Browne has distilled the creed into a disarmingly chatty primer. . ." (Bloomberg)

"one of the best guidebooks toward protecting and growing a retirement nest egg. This advice comes from a legend of value investing, and it’s presented with enough clarity that anyone can follow it." (Forbes.com)

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Product Details

• Hardcover: 208 pages
• Publisher: Wiley (September 22, 2006)
• Language: English
• ISBN-10: 0470055898
• ISBN-13: 978-0470055892
• Product Dimensions: 7.1 x 5.3 x 0.8 inches
• Shipping Weight: 8 ounces (View shipping rates and policies)
• Average Customer Review: 4.1 out of 5 stars  See all reviews (45 customer reviews)
• Amazon.com Sales Rank: #63,596 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

76 of 79 people found the following review helpful:

5.0 out of 5 stars A great introduction to value investing, October 2, 2006

By	Befragt (Chicago, IL USA) - See all my reviews

In the interest of full disclosure, it's best I state that I've been an extremely satisfied investor in the Tweedy Browne Global Value Fund for over a decade. The fund never does outstandingly well, but it also very seldom loses money. Over time, my initial investment has done surprisingly well.

This book should not surprise anyone who has read Tweedy Browne's shareholder letters, but it does a great job of synthesizing Tweedy Browne's investment philosophy, while also providing more in-depth discussion of how to research stocks and understand financial statements.

Chris Browne is a Benjamin Graham disciple, and his firm was labeled as on of the "Superinvestors of Graham and Doddsville" by Warren Buffett. This book might be characterized as a shorter, more readable version of Graham's "The Intelligent Investor."

It's important for anyone who might buy this book to understand what it is, and what it is not. This is a primer on value investing as applied to individual equities, not an in-depth treatise on how to invest, allocate assets, etc. The goal of this book is to show why value investing works, how it works, and how to implement an investing process. It does not, nor is it intended to, provide in-depth discussion about how to value companies or financial statements or how to assess competition. Keep in mind that this is a 180-page book that takes 2-3 hours to read.

Experienced investors might find parts of this book to be somewhat basic. However, starting with the chapter entitled "Sifting Out the Fool's Gold," it really imparts a lot of information that everybody should know (in that case, how to tell if a stock that meets screening criteria is really a value stock or a dud). The chapters about financial statement analysis and how to analyze a company's future prospects were well-written and provide an outstanding roadmap to analyzing a company that even more experienced investors would do well to heed.


The 16-point checklist in Chapter 14 ("Send Your Stocks to the Mayo Clinic") is an excellent way of examining a company to determine its competitive position and future prospects. In my opinion, that checklist and the related discussion alone are worth the price of the book.

The discussion on insider buying and selling was particularly interesting. Although this is part of many investor's decisions, the book demonstrates just how important insider buying can be as a value signal. I intend to pay more attention to insider buying as a result.

One particularly interesting aspect of this book is its discussion of international value investing. That overview should provide investors with examples of why value exists overseas, but most investors probably can't master the intricacies of non-US accounting methods.

This is a great book for less-experienced investors, and contains a number of nuggets that may be of use to even highly experienced investors. Readers who want a more depth might like Martin Whitman's two books or "Security Analysis" by Graham. However, these books can be tough reads, and for novice investors this book is a great place to start. Other good reads for investors are Joel Greenblatt's "You can be a stock market genius" and Dreman's "Contrarian Investing: the Next Generation."

50 of 52 people found the following review helpful:

4.0 out of 5 stars Good advice but examine track record, October 5, 2006

By	P. Heneghan "www.RemoraData.com" (Chicago, IL USA) - See all my reviews (REAL NAME)

If you are new to value investing this book covers the basics. The research on the outperformance of value investing is well documented and if you follow the advice in this book you will do well in your stock investments.

I was curious how the Tweedy Browne mutual funds peformed though so I went to their web site. In each period - 1, 3, 5, 10 and since inception, the returns after taxes on distributions of the Tweedy Browne American Value have failed to beat the S&P 500 index or the Russell 2000 index. When I started investing 10 years ago I read a lot of books by many authors without checking their record first. And, as a result I made a lot of expensive mistakes. Just something to keep in mind when choosing whose advice to listent to!

I still give this book 4 stars because I believe the author gives sounds advice. However I would recommend "The Essays of Warren Buffett, Lessons for Corporate America", the classic "The Intelligent Investor" by Ben Graham, and "Contrarian Investment Strategies in the Next Generation" by David Dreman.

71 of 78 people found the following review helpful:

3.0 out of 5 stars Author's effort: 4 stars, Reader's gain: 2 stars..., November 23, 2006

By	G. Soos "emanigol" (Dublin, GA United States) - See all my reviews (REAL NAME)

Unfortunately, this book has to follow the amusing and rewarding "Little Book" of Joel Greenblatt in Wiley's series. Therefore, unfavorable and perhaps unfair comparison is unavoidable. I do respect the experience and attempt of Christopher H. Browne to write a small book on value investing, but I feel he comes up short. If it was a friendly talk at a club you could find it mildly entertaining, but if you are looking for value, well...

First, value investing is not a strategy where a magic formula or a magic list could break an entirely new ground. Yet alone a "Little Book". You read just one value investing book and "Buy Stocks On Sale", "Margin of Safety", "First, Do Not Lose Money", "Second, Do Not Lose Money" pretty much become recurring and familiar ideas. There is no magic ratio, magic anything in analyzing income statements, earnings predictions, book value etc, it takes hard, thorough work, experience, patience and knowledge. You have to know what to know. You have to know what and where to look at. You have to know why. You have to know what, how and where numbers can be altered with GAAP or else. In this regard a reader could have expected at least a general(novel?)framework, a way of thinking instead of the presented essay-type, list-type ("I also look at...") writing. Or, like in Joel Greenblatt's book, we could have been entertained with a "Jason's Gum Shop"-type metaphore/concept.

Second, a reader of this book is either a convert and firm believer of value investing (Buffett, Munger, Fisher books pack the shelf), looking for additional ideas, NEW concepts or aspects and will find nothing new here. Or, the reader is a beginner or a freshly burned growth (hype)investor entertaining a fresh start and will be turned down by a dry, uninspiring, unexciting, somewhat disorganized book. Quite possibly this reader gives up, will leave this book unfinished and subscribes to yet another advisory service or dumps her/his money into an index or mutual fund. That is, not many readers would be enriched here.

Third, value investing is truly a winning strategy. So do not give up or get discouraged by this book. (Phil Town, David Dreman, Mary Buffett, Philip A. Fisher are good starts.)