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

Preface

Try not to become a man of success but rather to become a man of value.

—Albert Einstein

The best advice I have ever received came from my father. When I began searching for a career after finishing college, he advised me to stay away from three potential headaches in business: labor, rent, and inventory.

As any labor-intensive business is likely to lead to office politics, my father advised that I look for a business that requires little manpower. Then, as the high office rents in a world city such as Hong Kong can easily squeeze profits, he said the ideal is to find a business that requires little office space. Finally, as handling any type of inventory requires both manpower and space, an inventory-based business should also be avoided.

Taking his advice to heart and looking for a business that met these three criteria, I found investment management to be a perfect fit. The labor force is my brain, the office need only accommodate a few desks, and the inventory is the investment positions recorded in brokerage accounts.

Although investment management may allow one to avoid the aforementioned headaches, becoming a successful investment manager still involves considerable challenges. It requires extensive knowledge of the financial markets and the ability to react to different market circumstances. It also requires a prudent strategy to achieve sustainable investment returns and a sensible investment philosophy to build the right investment model.

In developing my own ...