The Art of Value Investing

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Blogs are awesome and fun to read, but books are better.

Books are super awesome because it is organized. I can’t imagine the blood, sweat and tears that go into writing books.

The book of the week is The Art of Value Investing: How the World’s Best Investors Beat the Market by Whitney Tilson and John Heins. It’s a great read for both beginners and experts alike. That can’t be said for the majority of the books out there because books also have to focus on one core audience.

Somehow Tilson and Heins pulled it off with The Art of Value Investing.

Regardless of what your opinions are on Tilson, one thing I have to give him big credit for is his dedication to promoting value investing.

In a previous post, Jae went through how you can download Tilson’s investment newsletters for free so be sure to check that post out.

To put it quickly, this is THE monster book on value investing. It covers everything from A to B. It’s packed with every topic you could imagine when it comes to value investing; how to research, valuation, portfolio management and the works.

There is also a lot on behavioral finance and the emotional side of investing. That’s why the book is called The Art of Value Investing.

From Tilson’s work with his newsletter, Value Investor Insight, he has already met with hundreds of managers and from those interview and insights, the book shares that experience with readers.

What’s Inside the Book

Before you put down $30 for the book, here’s a better idea of what the book is about.

With over 200 interviews, you get to crawl into the minds of the best value investors and learn from their experiences.

Some of the big names include

  • David Einhorn
  • Bill Ackman
  • Seth Klarmen
  • Julian Robertson
  • Joel Greenblatt and more

There are eight pages devoted to each interview which goes in-depth into the mistakes and successes of big name value investors.

How the Book is Organized

The book is organized into different topics. They talk a whole lot about the subjects below, among other things.

  1. Margin of safety and circle of competence
  2. The size of the company to buy and the geography
  3. Holding on to stocks for years
  4. Uncertainty, research, and generating good buy ideas
  5. How to analyze a company
  6. Looking for catalysts and using analysis
  7. Manage through relative value or absolute value
  8. Diversification and weighting positions
  9. Admitting you are wrong about a stock and how to avoid mistakes in the future
  10. What makes sense – advise management or fight management

The book also tackles the choices that each value investor had to make. It also challenges you to think about your own beliefs and philosophy, especially when its coming from such experienced and successful individuals.

Add this book to your library if you can.