Value Investing in a Little Book

Just finished The Little Book of Value Investing by Christopher H. Browne. Not quite as riveting and quick a read as Joel Greenblatt's The Little Book That Beats the Market, but even so, Browne makes a very good case for why sticking to value investing and nothing else will do very well for one's entire lifetime!

Some classic quotes from The Little Book of Value Investing :

Like Watching Grass Grow :

"Value investing also requires the mettle to buy those stocks that the majority of investors don't want to own. They have warts. They are out of favor. Of course, they are. Why else would they be cheap? Whey you go to cocktail parties and the talk turns to recent stock picks, one guy can say, "I bought Ionosphere Communications this morning at 10 and it closed at 12." Instantly, he is a genius. Forget that Ionosphere Communications has no sales and no earnings and is a disaster waiting to happen. You feel a bit foolish saying, "I bought ABC Ice Cream Corporation at half of book and 6 times earnings." You are greeted with a big yawn. Sex sells even in the stock market, and everyone wants to own the latest sexy issue. Value stocks are about as exciting as watching grass grow. But have you ever noticed just how much grass grows in a week?" p.149

A Style for the Long Run :

"Benjamin Graham laid out the basic concepts of the value approach to investing many decades ago. Like Graham, I have no faith in my ability, or in the ability of most others, to predict the direction of stock prices over the short term. I do not believe that many people can detect which technology stock will be the next Microsoft or which ones will bomb. What I do know is that owning a diversified portfolio of stocks that meets the standards of a margin of safety and are cheap, based on one or more valuation methods, has proven to be a sound way to invest my money. I have no reason to believe it will not continue to be so." p.163


The Little Book of Value Investing is definitely an undervalued investment.