Reblog: Lessons From 40 Years of Value Investing – Charles Brandes
In this interview, Kim Shannon, CFA, president of Sionna Investment Managers, talks with legendary investor Charles H. Brandes, CFA, chairman of Brandes Investment Partners, L.P., about his 40 years of unwavering global value investing. In addition to key lessons on implementing a value investing philosophy, Brandes discusses the current market environment and investment opportunities.
Here’s an excerpt from the Brandes interview on the CFA Institute website:
Kim Shannon, CFA: I would like to begin by noting that you did not start your career on the buy side. Is there a story about your career transitions?
Charles H. Brandes, CFA: Well, it was somewhat serendipitous. The overall stock market was down 45% from top to bottom in 1970, which was understandably debilitating to investors, and there was very little activity in our office. An older gentleman walked in to open an account. When he told me his name, I knew who he was—Benjamin Graham, the father of value investing and a teacher of Warren Buffett, who had already done pretty well in investing.
He purchased a thousand shares of National Presto Industries, a company that had been an example in his most recent edition of The Intelligent Investor. The example had been of a net–net current asset value issue, which had been one of Graham’s famous criteria from the 1930s for investing. The goal was to buy companies at a price no higher than two-thirds of their net–net current assets. Thus, the investor gets the whole company at a cost below that of its net liquid assets.