value investing
NYT's Dealbook blog picks up an unusual interest in a book on Value Investing: Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor
Update - 1: Saw a very impressive bit on one Mr Einhorn of Greenlight, in NYT recently (Aug 11, 2006):
Mr. Einhorn is held in high esteem in the world of value investing, an almost cultlike world steeped in the philosophy and investing style of Warren E. Buffett, Charles T. Munger and more recently, investors like Edward S. Lampert.
Most value investors espouse a simple philosophy: buy good companies at cheap prices. Value investors seek to determine what a company is worth rather than guessing what price it could be: they boast that they avoid hot ideas, companies or sectors.
Mr. Einhorn has a slight variation on those tactics. Instead of finding things that are cheap and then seeing if they are good investments, he finds things that are misunderstood and then determines whether they are cheap.
Mr. Einhorn’s inscrutable manner has worked out well for him and his investors. Over the last 10 years, he has built a $1 million fund, Greenlight Capital, into a $4 billion behemoth, delivering outsize returns. Through July, Greenlight Capital’s flagship fund was up about 9.5 percent, compared with a 3.1 percent return for the Standard & Poor’s 500-stock index. He has delivered double-digit returns in all but two of the last 10 years.
“Both poker and investing are games of incomplete information,” Mr. Einhorn said. “You have a certain set of facts and you are looking for situations where you have an edge, whether the edge is psychological or statistical.”
Update - 1: Saw a very impressive bit on one Mr Einhorn of Greenlight, in NYT recently (Aug 11, 2006):
Mr. Einhorn is held in high esteem in the world of value investing, an almost cultlike world steeped in the philosophy and investing style of Warren E. Buffett, Charles T. Munger and more recently, investors like Edward S. Lampert.
Most value investors espouse a simple philosophy: buy good companies at cheap prices. Value investors seek to determine what a company is worth rather than guessing what price it could be: they boast that they avoid hot ideas, companies or sectors.
Mr. Einhorn has a slight variation on those tactics. Instead of finding things that are cheap and then seeing if they are good investments, he finds things that are misunderstood and then determines whether they are cheap.
Mr. Einhorn’s inscrutable manner has worked out well for him and his investors. Over the last 10 years, he has built a $1 million fund, Greenlight Capital, into a $4 billion behemoth, delivering outsize returns. Through July, Greenlight Capital’s flagship fund was up about 9.5 percent, compared with a 3.1 percent return for the Standard & Poor’s 500-stock index. He has delivered double-digit returns in all but two of the last 10 years.
“Both poker and investing are games of incomplete information,” Mr. Einhorn said. “You have a certain set of facts and you are looking for situations where you have an edge, whether the edge is psychological or statistical.”
posted by g.e. at 11:51 PM
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