The Manual of Ideas Quotes

“Institutional managers care not only about investment risk but also, perhaps more acutely, about career risk. Many managers cannot afford to follow a winning strategy if it involves enduring long stretches of relative underperformance.”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“When considering management, we find humility and conservatism to be important qualities,” states John Lambert.”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“We also need to distinguish between business performance and the stock price. It may be a foregone conclusion that better management results in better business outcomes. However, whether it also results in market-beating stock performance depends not only on the actions of management but also on the valuation ascribed to the business by the market at the time of investment.”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“Professor Michael Porter of Harvard Business School asserts: “Once a company achieves competitive advantage through an innovation, it can sustain it only through relentless improvement. Almost any advantage can be imitated.” He adds, “Ultimately, the only way to sustain competitive advantage is to upgrade it—to move to more sophisticated types. This is precisely what Japanese auto-makers have done. They initially penetrated foreign markets with small, inexpensive compact cars of adequate quality and competed on the basis of lower labor costs. Even while their labor-cost advantage persisted, however, the Japanese companies were upgrading. . . .”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“the success of the magic formula suggests that investors, on average, tend to overestimate the magnitude and speed with which negative factors will erode profitability.”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“the success of the magic formula suggests that investors, on average, tend to overestimate the magnitude and speed”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“a company’s stock price “is the one piece of information that [investors] see all day long . . . slowly but surely, they start to believe that the price is really the value of the company. . . . Unfortunately, when you focus on the price, you usually don’t know when to buy, and even worse, you usually don’t know when to sell.”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“Many of us are prone to taking on debt to buy the assets we desire today, regardless of whether those assets accrete value over time. We appreciate the present value of an asset we need or want. However, when it comes to public equity investments, many of us discount a company’s balance sheet while placing a premium on periodic income.”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“Alternatives include Brookfield Asset Management, Fairfax Financial, Leucadia National, Loews Companies, Markel Corporation, and White Mountains Insurance. While these companies meet Buffett-style compensation criteria, some public investment vehicles have married hedge-fund-style compensation with a value investment approach. Examples include Greenlight Capital Re and Biglari Holdings.”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“It seems unwise to allocate a large portion of investable capital to any one deep value opportunity, even if the latter promises a large expected return.”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“the nature of cigar butts implies that success in this area is likely to come with material portfolio turnover, perhaps on the order of 100 percent.”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“Cigar butt stocks are meant to be one-time hits, delivering a nonrecurring return—and hopefully doing so quite quickly.”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“When we invest in an asset-rich but low-returning business, time may be working against us.”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“In real estate, money can be made both in premium beachfront property and in fixer-upper homes in middle-income neighborhoods. The skills and sensibilities of the people profiting in these distinct areas differ markedly. The people who tend to succeed seem able to match their strengths to the requirements of the opportunities they pursue.”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“Ben Graham–style bargain equities, we may become quite uncomfortable at times, especially if the market value of the portfolio declined precipitously. We might look at the portfolio and conclude that every investment could be worth zero. After all, we may have a mediocre business run by mediocre management, with assets that could be squandered. Investing in deep value equities therefore requires faith in the law of large numbers—that historical experience of market-beating returns in deep value stocks and the fact that we own a diversified portfolio will combine to yield a satisfactory result over time. This conceptually sound view becomes seriously challenged in times of distress. By contrast, an investor in high-quality businesses that are conservatively financed and run by shareholder-friendly managements may fall back on the well-founded belief that no matter how low the stock prices of those companies fall, the businesses will survive the downturn and recover value over time.”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“Management and chairman of the Santa Fe Institute: “Buffett’s advice is so good but so hard. The point when there’s a valuation extreme is precisely the point when the emotional pull—in the wrong direction—is strongest.”11 Adds James Montier, portfolio manager at GMO: “People love extrapolation and forget that cycles exist. The good news is that you get paid for doing uncomfortable things, when stocks are at trough earnings and low multiples their implied return is high, in contrast you don’t get paid for”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“nine categories of value ideas: Graham-style deep value, Greenblatt-style magic formula, small-cap value, sum-of-the-parts or hidden value, superinvestor favorites, jockey stocks, special situations, equity stubs, and international value investments.”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“Many of these in-depth interviews are available as free videos on the YouTube channels manualofideas and valueconferences. In Chapter 1, we focus on the mind-set”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“Chuck Akre, Charles de Vaulx, Jean-Marie Eveillard, Tom Gayner, Joel Greenblatt, Howard Marks, Mohnish Pabrai, Tom Russo, and Guy Spier.”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“Mohnish Pabrai in the United States, Prem Watsa in Canada, Massimo Fuggetta in the United Kingdom, Guy Spier in Switzerland, François Badelon in France, Francisco García Paramés in Spain, Ciccio Azzollini in Italy, Jochen Wermuth in Russia, Rahul Saraogi in India, Christopher Swasbrook in New Zealand, and Shuhei Abe in Japan.”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

“am grateful to have been deeply involved with VALUEx Zurich/Klosters, the annual gathering of value investors; ValueConferences, the series of online idea conferences for value investors; and The Manual of Ideas, the idea-oriented monthly research publication.”
― John Mihaljevic, The Manual of Ideas: The Proven Framework for Finding the Best Value Investments