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The Remarkable Story of a Value Investing Legend
on March 23, 2011
Peter Cundill, the subject of this book, took control of the All-Canadian Venture Fund in 1975 (which became the Cundill Value Fund), and over the next 33 years he averaged a compound annual rate of return of 15.2%. Put differently, $10,000 invested in Cundill's fund in 1975 grew to over $1 million during that time. The assets under his management in this fund jumped from about $8 million to $20 billion over the same time (obviously, there were inflows to the fund). That's significant, because keeping a very strong track record becomes progressively harder as the amount of money you are managing gets large. Cundill's success over such a long period of time is simply remarkable. Okay, so how did he do it? Please read on.
The title of this book is taken from a quote by value investor, Irving Kahn: "There's always something to do. You just have to look harder, be creative and a little flexible." That's a good description of the work process for any value investor, and it's an especially good description of what Peter Cundill did to earn his success.
Way back in 1968, a book titled "The Money Game" (about the go-go investing years during the 1960s) became a best seller. The book's author followed with another, not-quite-as-popular book, "Super Money." It was "Super Money" that 35-year-old investor Peter Cundill read during a plane trip in 1973. In that book, he read about Benjamin Graham's (and David Dodd's) classic book, "Securities Analysis," and after reading Graham and Dodd's book Cundill seriously took up in-depth value investing. Benjamin Graham had that kind of effect on people. Years earlier, a young Warren Buffett read Graham's "The Intelligent Investor," and remarked that "the scales fell from my eyes." (By the way, just about all of these books are still available, and they may rightfully be described as almost timeless.)
Basically, Cundill came to the realization that a stock isn't necessarily cheap simply because it has a low price-to-earnings ratio, a nice dividend yield or even a high growth rate. All these things may be good, but a stock is cheap when careful analysis of the company's balance sheet reveals that the stock's price is meaningfully lower than its intrinsic value. That's classic Graham-and-Dodd, margin-of-safety value investing, and it is what Cundill excelled at.
Although "There's Always Something to Do" is well-written by author Christopher Risso-Gill, one very interesting aspect of this book is its frequent quotes from Cundill's daily journal compiled over 45 years. Thus, the reader gets to hear directly from Cundill, and his at-the-time comments about buying ABC or selling XYZ stock are not filtered through after-the-fact 'analysis.'
This book covers most of the investment topics you would expect to read about a value investor, including a global search for value (like John Templeton was famous for), and a focus on unglamorous areas of investing (which is where values sometimes hide) like distressed corporate securities and defaulted sovereign debt.
Toward the end of this enjoyable book is a chapter that describes in some detail a number of the qualities that make for a great investor: insatiable curiosity, patience, concentration, attention to detail, independence of thought, humility and skepticism to name some. From personal experience, I would note that they are all easy to say and hard to do.
In short, this book represents an excellent addition to the library of anyone who is serious about value investing. One last thing: In 2006 Peter Cundill was diagnosed with Fragile X, a degenerative neurological disorder, and he passed away very recently (on January 24, 2011), at age 72. He will be missed.