Ronald Chan on what it means, and what it takes, to be a value investor. These observations were based on the 12 successful investors featured in his book, The Value Investors: Lessons from the World’s Top Fund Managers, which is an interesting read.
A Humble Portfolio Construction
Humility allows investor to remain down to earth and be aware that they can be wrong at times. It not only encourages investors to look for a margin of safety, but it also equips them with an open mind. Knowing that the world is uncertain, value investors tend to look towards diversification for protection.
The Art of Valuation
As Spanish value investor Francisco Parames puts it, “it is not how sophisticated you are in your valuation model, but how well you know the business and how well you assess its competitive advantage.”
Reading for Ideas
Successful value investors read a great deal. ......