The Little Book of Value Investing (Little Books. Big Profits) Review
This book provides a distilled education in value investing from one of the more accomplished practioners of the art. Browne argues that value investing consists of few a solid principles that can be implemented by anyone with an average IQ. He breaks value investing down into a few quantitative and qualitative steps. This consists of searching for companies where you can in essence buy a dollar for sixty cents while buying earnings on the cheap. Once you find these companies he explains how to evaluate their balance sheets and P&Ls. Following this quantitative filtering he provides a series of qualitative questions to further evaluate potential investment opportunities. He goes on to explain the benefits of looking beyond the US for investment opportunities and then imparts a dose of investing wisdom and some contrarian thoughts on portfolio management which I found highly refreshing. I think this book might serve as a good adjoining text to Joes Greenblatt's ROIC-earnings yield strategy, if you're otherwise sensibly uncomfortable with picking stocks from a screen without any further due diligence, which by the way, Browne strongly counsels against, and which he describes as a recipe for disaster.
The only reason I'm not giving this book five stars is because to date I have followed a successful passive indexed based investment strategy with a focus on asset allocation, ala William Bernstein. However, I've been thinking of devoting a small portion of my portfolio to individual stocks which is why I decided to read Browne's excellent little book.
The Little Book of Value Investing (Little Books. Big Profits) Overview
There are many ways to make money in today’s market, but the one strategy that has truly proven itself over the years is value investing. Now, with The Little Book of Value Investing, Christopher Browne shows you how to use this wealth-building strategy to successfully buy bargain stocks around the world.
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