Steve Bradshaw's Reviews > The Little Book of Value Investing

The Little Book of Value Investing by Christopher H. Browne
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's review
Jan 29, 2011

really liked it
bookshelves: investment
Read in January, 2011

This is a straight forward and concise book on how to pick safe long term value stocks. Browne includes a great number of personal anecdotes and rules of thumb that he's developed over the years that make for light interesting reading. A little too brief given the depth of the subject matter but a good first read in the area of value investing.

One significant disagreement I had with Browne is that one should stay fully invested in equities at every point in the cycle. This sounds to me like the stock broker in Browne coming out rather than the long term value investor. Graham, Buffet and just about every well known value investor agree that there are times when the stock market is generally overvalued and safe investments are hard to come by. This is the reason that Buffet took his personal portfolio from virtually all cash before the financial crisis to fully invested within a year of the crisis. Browne's reasoning that value gains don't happen steadily but take place on a few unpredictable days and that trying to time the market would miss out on these days is surprisingly one-sided. There are obviously similar unpredictable days on the downside which can wipe out substantial portfolio value. Why would an investor not take into account overall valuation levels since it clearly skews the long term balance of probable returns?

That said I generally agreed with Browne and liked his overall thesis of buying stocks like groceries. When they're on sale of course!

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05/12 marked as: read

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