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Graham Net-Nets: Outdated or Outstanding?
By InvestingNook  •  February 8, 2015
I have written briefly on Graham’s Net-Net Strategy before (here) with backtest being run by Jae Jun from Old School Value. Having read Montier’s research article – Graham Net-Nets: Outdated or Outstanding?, I believe that a more in-depth article should be written on the topic of net-nets. With a net-net strategy, it is really ‘cigar butt investing’ as how Buffett termed it. Essentially, it is akin to searching for cigar butts on the street to get one or two last puffs from it. While that last few puffs may not offer much of a smoke, this ‘bargain find’ will make that puff all profit. In Montier’s article he did not go into the details of his research methodology, however, I would believe as with most backtests, it would consist of the usual procedures and standard biases would have been taken into account. More importantly, some of Montier’s findings got me quite interested.

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By InvestingNook
As Co-Founder and Fund Manager of Heritage Global Capital Fund, we started InvestingNook as a website dedicated to sharing the knowledge of value investing – allowing our readers achieve an edge over the markets with the knowledge of value investing.
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