From Publishers Weekly
Browne’s experience as managing director of investment firm Tweedy, Browne provides examples to support his lessons on value investing, a method of buying stocks that have fallen in price to earn the best return over the long term. Browne uses examples from successful investors (such as Benjamin Graham, Walter Schloss and Warren Buffet) to illustrate that value investing is the best way to make the most of one’s investments. The zingy chapters titles (“Buy Sto…
Buy The Little Book of Value Investing at Amazon
In the interest of full disclosure, it’s best I state that I’ve been an extremely satisfied investor in the Tweedy Browne Global Value Fund for over a decade. The fund never does outstandingly well, but it also very seldom loses money. Over time, my initial investment has done surprisingly well.
This book should not surprise anyone who has read Tweedy Browne’s shareholder letters, but it does a great job of synthesizing Tweedy Browne’s investment philosophy, while also providing more in-depth discussion of how to research stocks and understand financial statements.
Chris Browne is a Benjamin Graham disciple, and his firm was labeled as on of the “Superinvestors of Graham and Doddsville” by Warren Buffett. This book might be characterized as a shorter, more readable version of Graham’s “The Intelligent Investor.”
It’s important for anyone who might buy this book to understand what it is, and what it is not. This is a primer on value investing as applied to individual equities, not an in-depth treatise on how to invest, allocate assets, etc. The goal of this book is to show why value investing works, how it works, and how to implement an investing process. It does not, nor is it intended to, provide in-depth discussion about how to value companies or financial statements or how to assess competition. Keep in mind that this is a 180-page book that takes 2-3 hours to read.
Experienced investors might find parts of this book to be somewhat basic. However, starting with the chapter entitled “Sifting Out the Fool’s Gold,” it really imparts a lot of information that everybody should know (in that case, how to tell if a stock that meets screening criteria is really a value stock or a dud). The chapters about financial statement analysis and how to analyze a company’s future prospects were well-written and provide an outstanding roadmap to analyzing a company that even more experienced investors would do well to heed.
The 16-point checklist in Chapter 14 (“Send Your Stocks to the Mayo Clinic”) is an excellent way of examining a company to determine its competitive position and future prospects. In my opinion, that checklist and the related discussion alone are worth the price of the book.
The discussion on insider buying and selling was particularly interesting. Although this is part of many investor’s decisions, the book demonstrates just how important insider buying can be as a value signal. I intend to pay more attention to insider buying as a result.
One particularly interesting aspect of this book is its discussion of international value investing. That overview should provide investors with examples of why value exists overseas, but most investors probably can’t master the intricacies of non-US accounting methods.
This is a great book for less-experienced investors, and contains a number of nuggets that may be of use to even highly experienced investors. Readers who want a more depth might like Martin Whitman’s two books or “Security Analysis” by Graham. However, these books can be tough reads, and for novice investors this book is a great place to start. Other good reads for investors are Joel Greenblatt’s “You can be a stock market genius” and Dreman’s “Contrarian Investing: the Next Generation.”
5.0 out of 5 stars
Value Investing in Simple English
Value investing, in my opinion, is the most logical way of investing. This investment style is very simple to understand yet so few investors and professional money managers…
If you are new to value investing this book covers the basics. The research on the outperformance of value investing is well documented and if you follow the advice in this book you will do well in your stock investments.
I was curious how the Tweedy Browne mutual funds peformed though so I went to their web site. In each period – 1, 3, 5, 10 and since inception, the returns after taxes on distributions of the Tweedy Browne American Value have failed to beat the S&P 500 index or the Russell 2000 index. When I started investing 10 years ago I read a lot of books by many authors without checking their record first. And, as a result I made a lot of expensive mistakes. Just something to keep in mind when choosing whose advice to listent to!
I still give this book 4 stars because I believe the author gives sounds advice. However I would recommend “The Essays of Warren Buffett, Lessons for Corporate America”, the classic “The Intelligent Investor” by Ben Graham, and “Contrarian Investment Strategies in the Next Generation” by David Dreman.
4.0 out of 5 stars
Good Introduction to Investing
This book was an easy read that introduced the concepts of value investing very well. It will open up a lot of possibilities for those who take notes.
5.0 out of 5 stars
Very clear indeed.
This a very clear and concise book–another one, all of which seem lately to contain the same wisdom: buy low (and buy smart). I’m trying.
Unfortunately, this book has to follow the amusing and rewarding “Little Book” of Joel Greenblatt in Wiley’s series. Therefore, unfavorable and perhaps unfair comparison is unavoidable. I do respect the experience and attempt of Christopher H. Browne to write a small book on value investing, but I feel he comes up short. If it was a friendly talk at a club you could find it mildly entertaining, but if you are looking for value, well…
First, value investing is not a strategy where a magic formula or a magic list could break an entirely new ground. Yet alone a “Little Book”. You read just one value investing book and “Buy Stocks On Sale”, “Margin of Safety”, “First, Do Not Lose Money”, “Second, Do Not Lose Money” pretty much become recurring and familiar ideas. There is no magic ratio, magic anything in analyzing income statements, earnings predictions, book value etc, it takes hard, thorough work, experience, patience and knowledge. You have to know what to know. You have to know what and where to look at. You have to know why. You have to know what, how and where numbers can be altered with GAAP or else. In this regard a reader could have expected at least a general(novel?)framework, a way of thinking instead of the presented essay-type, list-type (“I also look at…”) writing. Or, like in Joel Greenblatt’s book, we could have been entertained with a “Jason’s Gum Shop”-type metaphore/concept.
Second, a reader of this book is either a convert and firm believer of value investing (Buffett, Munger, Fisher books pack the shelf), looking for additional ideas, NEW concepts or aspects and will find nothing new here. Or, the reader is a beginner or a freshly burned growth (hype)investor entertaining a fresh start and will be turned down by a dry, uninspiring, unexciting, somewhat disorganized book. Quite possibly this reader gives up, will leave this book unfinished and subscribes to yet another advisory service or dumps her/his money into an index or mutual fund. That is, not many readers would be enriched here.
Third, value investing is truly a winning strategy. So do not give up or get discouraged by this book. (Phil Town, David Dreman, Mary Buffett, Philip A. Fisher are good starts.)
4.0 out of 5 stars
Investing lessons
I learned from a broad range of investing books, and I got this one primarily because it was a short book.
5.0 out of 5 stars
Excellent overview and introduction to Value Investing
Great book as an introduction to the principles of value investing as laid out by Benjamin Graham. Very easy to read.
4.0 out of 5 stars
Successor of Ben Graham
The author states that over a long period of time value companies have outperformed the growth companies.
5.0 out of 5 stars
The shortest Value Investing book….that works!
Don’t let the small size of this book fool you! For anyone who is looking to build, over time, a valueable (read: multi-million dollar) portfolio of stock investments; this book…
3.0 out of 5 stars
Basic Overview Of Value Investing
the book is good as far as you need them only to review the basic principle of value investing. the author explain it well with examples.
4.0 out of 5 stars
Value Investing
Very clear and concise explanation about how to determine the value of a stock. Details the qualities to look for in finding cheap, undervbalued stocks that are likely to rise in…
4.0 out of 5 stars
Read Graham
Decent book, well done and executed, but I have to say, if the subject of Value Investing is interesting to you, stick with Ben Graham’s Intelligent Investor. Why go anywhere else?