Value Investing: Simple in Concept, Difficult to Execute


Join The Motley Fool for a conversation with author, investor and philanthropist, Whitney Tilson. In addition to managing Kase Capital, Whitney has coauthored More Mortgage Meltdown: 6 Ways to Profit in These Bad Times, Poor Charlie's Almanack, and most recently The Art of Value Investing, a collection of interviews with over 200 successful value investors.

A full transcript follows the video.

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Brendan Byrnes: Obviously with 200 different interviews, there have to be a ton of different ways in which to go about being an investor.

Whitney Tilson: Yes.

Brendan: ...a ton of different ways that work for different people. Are there some common themes that you notice in there, and common ways people go about things, or things that make them successful? Is it discipline? Is it a focus on the long term? Is it...?

Whitney: These are all value investors, but in value investing there are a lot of different flavors. Generally speaking, value investing is very simple in concept. It is rooted in the two timeless principles of intrinsic value, and then margin of safety.

All of the people we interview are practicing some form of that, but the most successful investors, I find, have a narrow -- not too narrow -- but a strategy that they can execute, that they've gotten good at, that they've built expertise over.

Some people focus on certain market caps, on certain industries, limit themselves to certain countries. There's a lot in here. I think value investing is simple in concept, very difficult to execute. You have to make some tough decisions about what you're going to do, but also what you're not going to do, and stay very disciplined around that.

This book gives a lot of different ideas about how everyone has a little bit different answer on how to answer the circle of competence, on how they do research and how they get an edge. There's a lot in here to chew on.

The book does give some answers, but not all the answers are the same so you, the reader, have to decide what resonates with you. Learn from what's made different people successful, and then incorporate it into your own distinct investment approach.

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