The Value Investors: Lessons from the World's Top Fund Managers

Foreword

Students of investing look for a formula, a way of combining accounting and other information that will produce infallibly good investment results. Even Benjamin Graham, the founder and leading spirit of by far the most successful school of investment practice, spent a good deal of his time looking for such a formula. To this end, students read both technical works and the retrospective testimonies of high-performing investors. In both areas, they are largely disappointed.

The technical approaches have a meager record of success. A few notably good books have been written (for example Joel Greenblatt’s You Can be a Stock Market Genius and Graham and Dodd’s Security Analysis). But reported technical investment approaches rarely, if ever, lead to consistent, high-level returns (if they did they would be adopted by everyone and would become self-defeating).

Investment memoirs generally also disappoint students. They tend to be long on philosophy and short on advice for how to buy particular securities. However, as the works of successful investment practitioners, the memoirs do have much to recommend them. They describe, however non-specifically, investment approaches that worked in practice. And they capture an important aspect of investment success: that it depends more on character than on mathematical or technical ability. This is the consistent message of investment memoirs as a group.

The problem is that each memoir presents a unique perspective on the character traits ...