Value Investing Advice: Take Time Out for “Calm Contemplation”

Value investor and author Guy Spier discusses his philosophy on investing, which includes taking a long term perspective, not reacting to news and pundit predictions and keeping an arm’s length away from Wall Street (Spier lives in Zurich). Mr. Spier’s views are greatly influenced by that of Warren Buffett. He believes that Buffett, who lives in Omaha and works out of a simple office building “could not be further away from the vagaries of the… Read More

Is it Time for Value Stocks to Shine?

The relative underperformance of value stocks (low P/E, low P/B) stocks could come to an end soon according to this Barron’s piece. While growth stocks typically outperform value in periods when growth is sluggish, the current issues with value stocks have less to do with a broad-based economic expansion, which is usually when value outshines growth, and more to do with the recent market sell-off. According to the piece, “when stocks enter a correction, defined… Read More

Bill Nygren on Value Investing, the Attractiveness of Financials, and Learnings from Different Perspectives

Noted mutual fund manager Bill Nygren of the Oakmark Select fund thinks that long term equity investors can “expect a mid- to upper-single digit minimum return in the market” looking ahead, but notes that tilting one’s portfolio to large cap financials (Citigroup, Bank of American and JP Morgan are all in Nygren’s top 10 holdings) could help produce better returns than the market. Banks, Nygren believes, will benefit once interest rates increase. As rates rise, deposit… Read More

3 Rules Successful Long Term Investors Should Follow

Brett Arends over at MarketWatch gives equity investors’ fretting over the latest market volatility some timeless advice in his latest ROI column — “Buy early. Buy often. And buy cheap.” Arends outlines three principles investors can follow in times like these. Buy Early: Over most long term periods of time (5-10 years), stocks have a high probability of increasing in value, which is why Arends says investors should have a bias toward being invested and… Read More

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