Value Investing: Tools and Techniques for Intelligent Investment

Chapter 21. Going Global: Value Investing without Boundaries^[21]

In a recent meeting I was asked if I had ever seen any work on value investing at the global level. I decided to investigate and see if my prior belief that value works across national boundaries was substantiated by the data. The good news is that it was. Allowing investors to seek out bargains wherever they are located and regardless of the industry in which they are operating makes sense both theoretically and empirically. In a world which seems to want to label and tightly box fund managers, such an approach will be unconventional. However, as Sir John Templeton said, 'It is impossible to produce superior performance unless you do something different from the majority.'

• As regular readers of Mind Matters will know, I favour an unconstrained approach to investing. This preference reflects both a belief that one should be allowed to exploit the opportunities whenever and wherever they arise. And also a belief that risk isn't measured by numbers such as the standard deviation, which renders most 'risk management' futile and means that tracking error has no meaning.

• However, I also regularly extol the benefits of confronting beliefs with empirical evidence. Thus it behoves me to show that my beliefs aren't at odds with reality. So does an unconstrained value-oriented approach work? I am relieved to say yes. For instance, looking at the individual performance across a group of major developed markets, value tends to outperform ...