Value Invest

April 2015

Howard Marks interviews Joel Greenblatt
Joel Greenblatt and Howard Marks are both graduates of Wharton, Marks mentioned in the interview that there was an unusual cluster of successful investors from Wharton at the end of the 1970s – and they should investigate “what was in the water at the time”. They discuss a variety of topics during the 32 minute interview, perhaps most interestingly Greenblatt provides some details on his journey as a Value Investor – from investing in “cigar butts” through to higher quality businesses at a reasonable price.

Munehisa Homma – 18th Century  Japanese Value Investor
Whilst he was primarily a statistical trader in the Japanese rice markets, some of the translated quotes from Munehisa Homma would be identified with among many modern Value Investors – including: “prices do not reflect actual value” and “buys and sells are decided on emotion not logic.” He also engaged in deep fundamental analysis of issues affecting rice yields and stories also claim that he established a personal network of men about every 6 km between Sakata and Osaka (a distance of some 600 km) to communicate market prices. Homma was estimated to have amassed a fortune of $100bn in today’s money.

Brandes Institute – Value versus Glamour
Charles Brandes is speaking at the London Value Investor Conference on 20th May and this white paper by the Brandes Institute will provide a good primer for delegates. The paper discusses and identifies the historical outperformance of Value Investing, with the dataset focussing on 1980-2014 and showing that over the long term, the value premium was evident across valuation metrics, regions and market capitalizations.

Howard Marks latest memo – Liquidity 
Warren Buffett famously remarked that “When I see memos from Howard Marks in my mail, they’re the first thing I open and read. I always learn something.” In this memo, Marks covers the effects of liquidity on investors in a lot of detail.

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