CHAPTER 13: The Making of a Value Investor

If you can keep your head when all about you

Are losing theirs and blaming it on you;

If you can trust yourself when all men doubt you,

But make allowance for their doubting too;

If you can wait and not be tired by waiting;

If you can meet with triumph and disaster

And treat those imposters just the same;

If you can talk with crowds and keep your virtue,

Or walk with kings—nor lose the common touch,

If neither foes nor loving friends can hurt you,

If all men count with you, but none too much;

Yours is the Earth and everything that’s in it,

And—which is more—you’ll be a Man!

Rudyard Kipling

I once asked Donald Keough, former president of Coca-Cola, what it takes to become a good leader. He replied that leaders come in different shapes and sizes, and that it is difficult to predict who will become a good one. Writing this book led me to believe that his comment is equally applicable to investing. Good investors come in different shapes and sizes, and there is no strict rule for identifying whose approach is best.

V-Nee Yeh of Value Partners in Hong Kong told me that many investors and investment books like to discuss the “right” investment style. Yet he believes it is more appropriate to first understand one’s temperament and compatibility and then to choose a style. “If you are a calm and patient person, then the value investing approach may be right for you, but if you are jumpy and aggressive, then a more trading-oriented style may be ...

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