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How 12 investing legends from around the world personal background, culture and life eperiences have shaped their strategies.,
This review is from: The Value Investors: Lessons from the World's Top Fund Managers (Hardcover)I was intrigued by the premise behind THE VALUE INVESTORS: LESSONS FROM THE WORLD'S TOP FUND MANGERS (Wiley) by Ronad W. Chan.
The author, head of an investment management company based in Hong Kong, interviewed 12 value-investing legends from around the world in an attempt to learn how their personal background, culture and life experiences have shaped their investment strategies.
Chan also shared why he got into the field:
* The best advice I have ever received came from my father. When I began searching for a career after finishing college, he advised me to stay away from three potential headaches in business: labor, rent, and inventory.
As any labor-intensive business is likely to lead to office politics, my father advised that I look for a business that requires little manpower. Then, as the high office rents in a world city such as Hong Kong can easily squeeze profits, he said the ideal is to find a business that requires little office space. Finally, as handling any type of inventory requires both manpower and space, an inventory-based business should also be avoided.
Taking his advice to heart and looking for a business that met these three criteria, I found investment management to be a perfect fit. The labor force is my brain, the office need only accommodate a few desks, and the inventory is the investment positions recorded in brokerage accounts.
I found his interviews fascinating, particularly the two with 106-year-old Irving Kahn, who worked closely with the "father of value investing," Benjaim Grham and remains active today; and 95-year-old Water Schloss, described by Warren Beuffet as the "super investor from Grhaham-andDiddsville."
Their advice got me thinking, too. For example, there was this tidbit:
* "When Walter [Schloss] and Edwin were asked in 1989 by Outstanding Investors Digest, 'How would you summarize your approach?' Edwin replied, 'We try to buy stocks cheap.' So much for Modern Portfolio Theory, technical analysis, macroeconomic thoughts and complex algorithms."
And I also liked this one from Kahn:
* "There is nothing wrong with being an emotional person, but when it comes to investing, you need to set your own valuation standard. Then you also need to keep your emotions in check so that you are not affected by the general market. Sometimes, the best thing to do is nothing. But when the market is strong and everyone is telling you to buy, fighting temptation is easier said than done. Similarly, in a market crisis, when everyone is saying the stock market is dead, you need the courage to buy. In many ways, you need to train yourself to become a contrarian!"
The last chapter of VALUE INVESTORS was particularly valuable. It conains Chan's advice on how to become a value investor.