Learning Value Investing
For the last six months I’ve been learning value investing from Tony Kynaston, who I think of as “Australia’s Warren Buffett”, on our QAV Podcast. If you’re unfamiliar with the term “value investing”, it’s the style of sharemarket investing made famous by Warren Buffett. It’s basically a discipline of identifying cheap stocks in companies that are actually performing quite well, but for some reason their shareprice has been beaten down by the market. This can happen for a number of reasons, sometimes involving emotion or just that the company isn’t sexy right now. The idea behind value investing is that you pick up those stocks while they are undervalued and figure that eventually the market will catch up. Tony has spent decades developing his own methodology for doing this analysis and that’s what we talk about on the podcast. We’ve had some pretty impressive folks on the show, including Alan Kohler and Roger Montgomery.
Last week I wrote a post about what I’ve learned about value investing during our first six months. It’s actually going through a phase of being unpopular at the moment, as low interest rates are helping to drive tech stocks through the roof, which leads to claims that value investing is dead. However, far smarter people than I, including Tony, Buffett, Charlie Munger and Roger Montgomery still think value investing is the best long-term strategy, so I’m sticking with it. Investing like Buffett, one of the most successful investors of all time, sounds like a good idea to me.