July 2011     Issue 4

Steve Forbes interviews Joel Greenblatt
Following his success with “The Little Book that beats the Market”, Joel Greenblatt is on the interview circuit again, promoting his 3rd book, “The Big Secret for the Small Investor”. This interview is packed with insight, extolling the virtues of disciplined long-term value investing but also describing how few people have the patience to execute on it. He argues articulately that despite the significant research, which supports the long-term out performance of this style of investment, the opportunity has not been diminished by the market but has expanded on account of institutional bias within the main stream fund management community.

Transcript of David Einhorn’s Speech at the Ira Sohn Conference
David Einhorn discusses the pricarious nature of US finances and provides two long-only tips which includes one of our positions, Microsoft.

Howard Marks:  How Quickly They Forget
Howard Marks is the highly respected CEO of Oaktree Capital and author of the book: “The Most Important Thing”, which should be on every Value Investor’s reading list. In this letter to his investors, he sets out the psychology of investment which leads people to so quickly forget the lessons, that they think they learn in periods of crises.

James Montier: A Value Investor’s Perspective on Tail Risk Protection: An Ode to the Joy of Cash
Warren Buffett first coined the phrase “an economic moat”, by which he meant the factors that enable some businesses to sustain and protect above average profits for a long period of time.   In this Video, Pat Dorsey, the author of ‘The little book that builds wealth’ sets out his 4 categories of an economic moat.  I have included a second link, which covers the same content in an article rather than a video.

Zeke Ashton:  Evolution of a Value Investor: It’s All about the Process
We really liked this article.  Coming from a business background, we found it very natural to establish a well defined process early on to support our investment decision making.  In investment management, establishing and implementing a disciplined process avoids the frailty of emotion and provides a platform for learning