What Gets A Contrarian Going?
September 27, 2013 Leave a comment
James Montier’s The Seven Immutable Laws of Investing
September 19, 2011 1 Comment
James Montier expounds The Seven Immutable Laws of Investing to help investors avoid some of the worst mistakes, which, when made, tend to lead them down the path of the permanent impairment of capital.They are as follows:
1. Always Insist on a Margin of Safety
Valuation is the closest thing to the law of gravity in finance .It is the primary determinant of long-term returns. The objective of investment (in general) is not to buy at fair value, but to purchase with a margin of safety.This reflects that any estimate of fair value is just that: an estimate, not a precise figure, so the margin of safety provides a much-needed cushion against errors and misfortunes. When investors violate this law by investing with no margin of safety, they risk the prospect of the permanent impairment of capital. Read more of this post
Learning From Sir John Templeton
June 24, 2011 3 Comments
Sir John Templeton (November 29, 1912 – July 8, 2008) was a legendary investor and a pioneer of global investing. He took value investing to an extreme, picking industries and companies he believed to be at rock bottom, or as he called it “points of maximum pessimism.”He bought when there was blood on the streets. For example,when investors fled the New York market after the Second World War was declared, Templeton borrowed $10,000 to scoop up stocks priced at less than a dollar, often in companies that were near bankruptcy. In four years, he sold the stock, paid off the debt and pocketed $40,000—the seed money for Templeton Growth Fund, a market beater for many years.
Templeton did not care where a company was located. If it was selling below what he considered to be its asset value, and if it was in an industry or nation that was “out of favor,” he was interested in it. He was among the first to invest in postwar-Japan and among the first to sell out of Japan in the mid-1980s. He was one of the very few who invested in Peru when the communist Shining Path was running rampant, and by doing so, he reaped a fortune for his investors. Read more of this post
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