Value Investing Pro

Surprisingly, Value Investing at one point did not exist. At the turn of the 20th century, Wall Street was a place where insider information and speculation ruled. It was until a man by the name of Benjamin Grossbaum brought structure to a rather lethargic Wall Street by writing Security Analysis in 1934 that there was a sound framework in which investors could finally make business like decisions in the stock market. Below is a list of defining moments that in my opinion has molded value investing to what it is today.

1. 1949, The Intelligent Investor by Benjamin Graham is published. Warren Buffett describes it as “the best book on investing ever written”, The Intelligent Investor provides “in a form suitable for the laymen, guidance in adoption and execution of an investment policy”.
2. Second on the list is Warren Buffett’s acquisition of Berkshire Hathaway. Currently a conglomerate, Berkshire Hathaway would become Warren Buffett’s investment vehicle. Throughout the years, the shareholder letters would become the the public’s value investing Wikipedia.
3. At the age of 29 (1959), Warren Buffett is introduced to Charlie Munger. Munger would stray Warren Buffett from Benjamin Graham’s philosophy of diversification and low P/BV. Munger influences Buffett to avoid ‘Cigar Butts’ and invest in companies with wide moats. As a result, Buffett moves towards a more concentrated portfolio with high quality names that he could hold for long periods of time.
4. At the height of the internet bubble Institutional Investor publishes a cover with the headline, “Value Investing: Can It Rise from the Ashes?”, which questions the future of value investing. Similarly, the New York Times comes out with the headline “What’s Killing the Value Managers?”, which highlights the beating value oriented managers took to hot growth funds benefiting from .com stocks. Although many at the time questioned Value Investing, the time tested strategy would prove itself,  as high flying internet stocks get crushed when the bubble finally bursts.
5. In a speech at Columbia University commemorating the 50th anniversary of Security Analysis, Warren Buffett gives arguably the best speech on value investing. The Superinvestors of Graham-and-Doddsville introduces the world to super investors like Walter Schloss, Bill Ruane,Tom Knapp, Ed Anderson, Rick Guerin and Stan Perlmeter, names that very few people have heard of, but nonetheless have produced outstanding returns.

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