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The Value Investors: Lessons from the World's Top Fund Managers Hardcover – September 11, 2012
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From the Author
with author Ronald W. Chan
Why did you decide to write The Value Investors: Lessons from the World's Top Fund Managers?
As a value fund manager myself, I have never felt that an investment skill set alone is the determining factor in beating the stock market. Rather, it has more to do with one's temperament and investment philosophy. To learn more about these qualities, I tried to look into the life and career experiences of successful value investors around the world, but was able to find only information on their investment performance or current outlook.
The idea of writing this book emerged with the realization that to truly understand the essence of value investing, I needed to learn more about the career paths and life encounters of its successful practitioners. In 2011 and 2012, I interviewed 12 renowned value investors from different parts of the world. They told me about their personal background and shared their life stories, and in the book I inform readers of why and how they became value investors in the first place and what has made them successful.
Who should read this book?
I believe anyone who is interested in investing and in sensible money management should read this book. As Professor Bruce Greenwald, Director of the Heilbrunn Center for Graham and Dodd Investing at Columbia University, put it, the book is a good "starting point for any nascent value investor and an invaluable reference for experienced investors."
It is important to note that the book is not an in-depth analysis of investment theories or formulas. Instead, it tells the life stories of tried and true value investors, who inform us of how they started out and how they became who they are today.
What is the one thing that all of the value investors you interviewed have in common?
They are all curious about the world. They are curious about human psychology, about how businesses function, and about how the world is progressing. In effect, this means that they never stop reading and learning because they always want to know more. By that, I don't mean that they read romance novels or gossip magazines, but rather useful materials and information that will improve their knowledge and give them an edge when it comes to investment decision making.
People often ask these investors how they generate ideas, and their answer is simply "I read a lot." Although this answer may not seem helpful on the face of it, idea generation involves more than waking up one day and deciding to look for inspiration. It is important to have a disciplined reading and learning routine, to try to understand the world in a systematic manner, and to synthesize all of the information you have accumulated. Then, inspiration may strike.
Top Customer Reviews
Chan's approach to investing is summarized in Chapter 13 "The Making of a Value Investor." I recommend the reader read this last chapter first. This is not to say that the stories about the careers of the twelve featured fund managers are not interesting. In fact I found the mini biographies fascinating and even uplifting. But the real value in this book is in the lessons from each of the investors.
First lesson: Have a "humble" portfolio, that is one that is diversified and consists of stocks chosen through a fundamental analysis of the underlying value of the companies. There are two styles: a diversified portfolio such as most investment professionals recommend and a more daring approach, a "concentrated portfolio" such as kept by Warren Buffet. Of course Buffet with his unparalleled expertise could afford to focus on his best bets. Chan firmly recommends a diversified portfolio.
Second lesson: value analysis itself. Here is where we learn why Chan travelled around the world to interview these very successful fund managers. It turns out that while the fundamentals of value are almost always the same, the way to find them out differs according to the ability and opportunities of the investor. The twelve people Chan interviewed show the reader how they did it. Some investors look more closely at "competitive advantage," some are more interested in understanding the business itself, while others (like Warren Buffet) are expert at evaluating those who manage the company.
Third lesson: read widely and well. Chan believes investment ideas don't just drop out of the air.Read more ›
Following the moves of famous investors has become a common source of idea generation for today's investors. Although many investors attempt to mechanically "coattail" the moves of various hedge fund managers based on quarterly SEC filings, it is more productive to attempt to identify those investors with strong long term track records and to learn from their investment philosophy.
Ronald W. Chan's latest book, The Value Investors: Lessons from the World's Top Fund Managers, is an excellent compilation of interviews with twelve highly successful value investors from very different backgrounds. Mr. Chan's previous book, Behind the Berkshire Hathaway Curtain demonstrated his mastery of the art of the interview. Each of the chapters in The Value Investors includes a brief section with biographical information regarding the manager along with his long term track record relative to an appropriate benchmark.Read more ›
Now in his latest book, Chan extends the scope of his focus to 12 value investing legends. He conducted interviews of each of them, during which he learned about their career experiences and, especially, their views on value investing. As Bruce C.N. Grunwald explains in the Foreword, "By combining descriptions of investment approaches with investor background, he illuminates the connection between individual character and effective investment practice. Taken as a whole, the book provides each practical value investor with the necessary material to sift through the historical records to find the style that is most appropriate to them. Ronald Chan's work is an essential starting point for any nascent value investor and an invaluable reference for experienced investors."
I am neither a nascent nor an experienced value investor. As was also true when I began to read Behind the Berkshire Hathaway Curtain as well as The Essays of Warren Buffett: Lessons for Corporate America, Second Edition, edited by Lawrence A. Cunningham, my interest in this book is in the information, insights, and wisdom provided by a dozen of the world's most intelligent, erudite, and successful fund managers.Read more ›
Most Recent Customer Reviews
It's a five-star book if you are interested in value investing. I've been investing, and reading about investing and related topics for over 40 years, and for me, this is actually... Read morePublished on August 17, 2014 by TopCat19
Lately I’ve been interested in reading investment books that are not about the actual mechanics of investing, but the thought process and philosophy behind it. Read morePublished on May 16, 2014 by Ant Gara
Well researched, well structured and presented. Very informative to anyone getting acquainted with value investing. Read morePublished on January 19, 2014 by Tomás F. Serna
Some general investment idea, nothing special. I was expecting some useful techniques on investment decisions. Through out the book, just feel very wordy.Published on September 1, 2013 by Tasha
Since 12/13ths of the book is interviews, I had expectations that they would be more engaging. While they were interesting, it was too easy to set this book down and not pick it up... Read morePublished on August 18, 2013 by matt simerson
The book summarizes inspiring stories of some of the best names in value investing. Key takeaway from the compilation is while the principals of value investing remain timeless but... Read morePublished on August 1, 2013 by Ruchi
It's good to read this book. It would be better if there were some real examples showing the progress these fund managers underwent from A to Z in some deals.Published on June 23, 2013 by Parker Vector pack
This book was great. It dealt with various aspects of investing, from traditional value investors to value investors who concentrate their investments in emerging markets.Published on June 11, 2013 by carlos
I should have read the product page more carefully before ordering this book. I was working on a study of value investing techniques, and at first was disappointed in this book. Read morePublished on May 16, 2013 by Andy Wallace