Sequence Risk Lurks for “Buy on the Dip” Investors

Generally accepted investing wisdom has always called for long-term investors to “buy the dips” and add to their positions as the market declines.  This advice makes sense in most cases, but as the WSJ’s Jason Zweig points out, the “buy the dips” refrain needs to be thought about in the context of an investor’s time horizon and how market returns occur. For younger investors, by the dips can be a very sound philosophy, but for… Read More

Value Investing Success Hinges On Discipline

Value stocks have been faring quite well recently.  But in his “Intelligent Investor” column for The Wall Street Journal, Jason Zweig says that the key to value investing is how you respond when times get tough. Zweig talks with value investing legend Jean-Marie Eveillard, who says that “most people aren’t cut out for value investing because human nature shrinks from pain.” And there’s plenty of pain in value investing — even for the greats. Zweig… Read More

In Rare Interview, Klarman Talks Value Investing

Hedge fund guru Seth Klarman rarely talks with the media, but he recently gave an in-depth interview to Charlie Rose through the group Facing History and Ourselves.  And Business Insider has provided a nice summary of the legendary value investor’s wisdom. Much of his advice focuses on the psychology of value investing. “Investing is the intersection of economics and psychology,” Klarman says. “The economics, the valuation of the business, is not hard.  The psychology —… Read More

Hedge Fund Chief: Asia Offers Big Opportunities for Value Investors

Michael van Biema, whose value-focused firm’s funds garnered several InvestHedge awards in 2010, says the Asian markets are offering particularly good opportunities for value investors. “They’re getting really, really cheap again, which of course, we like,” van Biema tells in reference to Asian stocks. “And you get a huge tail wind of growth. The best environment for a value investor is a place where companies get highly mispriced, so that you can buy firms… Read More

Winters: “It’s a Great Time to Be a Value Investor”

Top fund manager David Winters says it’s a “great time to be a value investor”. Winters tells Bloomberg that “I think there’s a lot to do today because people are so negative. It’s a great time to be a value investor.” One area where he’s finding a lot of value: Switzerland. Winters also talks about his broader investment philosophy, which involves looking for businesses that have improving economics, a cheap share price, and management working for… Read More

Tilson & Heins on Staying Disciplined

Warren Buffett has said that investing is simple, but it’s not easy, and in their latest Kiplinger’s column, value investors Whitney Tilson and John Heins explore that subject. “In The Little Book That Beats the Market, published in 2005, star money manager Joel Greenblatt describes a ‘magic formula’ for success that ranks stocks based on only two factors: share price relative to a firm’s earnings and return on capital,” Tilson and Heins write. “After reading… Read More