Just How Did Walter Schloss Achieve a 21.3% CAGR From 1956 to 1984

Johnny HopkinsWalter J. Schloss Comments

Walter Schloss was one of Buffett’s Superinvestors of Graham-and-Doddsville. He had an incredible track record of returns over his investing career, achieving a 21.3% CAGR over the period of 28 and a quarter years from 1956 to Q1 1984. And, he did it while keeping his own expenses to a minimum. In Buffett’s 1994 shareholder letter he wrote about Schloss: “Please … Read More

Seth Klarman – The Definitive Guide On Why Bottom-Up Investing Trounces Top-Down Investing

Johnny HopkinsSeth Klarman Comments

There’s a lot of discussion on which is the better investing strategy, bottom-up investing or top-down investing. The definitive guide can be found in Chapter 7 of Seth Klarman’s book, Margin of Safety. Here’s an excerpt from that book: There is no margin of safety in top-down investing. Topdown investors are not buying based on value; they are buying based on a … Read More

Mohnish Pabrai – How To Calculate Intrinsic Value

Johnny HopkinsMohnish Pabrai Comments

I’ve just been re-reading one of my favorite investing books of all time, The Dhando Investor, written by Mohnish Pabrai. In Chapter 7, Dhandho 102: Invest in Simple Businesses, Pabrai provides a very simple example of how to calculate intrinsic value using the real life example of Bed Bath & Beyond Inc (NASDAQ:BBBY). It’s a great illustration of how intrinsic value is … Read More

The Acquirer’s Multiple® Canada All TSX Stock Screen Backtest

Tobias CarlisleStudy Comments

Chart 1. Returns from January 2, 1999 to June 16, 2017 (Log.) We backtested the returns to a theoretical portfolio of stocks selected by The Acquirer’s Multiple® from the Canada All TSX stock screen. The backtest assumed the screen bought and held for a year 30 stocks selected from the All TSX universe (the largest 95 percent of all TSX stocks by market … Read More

Howard Marks – Anticipate – And Avoid – Pitfalls That Others Will Rue After The Fact

Johnny HopkinsHoward Marks Comments

With the stock market reaching all time highs, maybe it’s a good time to revisit Howard Marks’ memo of 2005 in which he discusses market trends being taken to excess – and the painful consequences that become clear in hindsight. Here’s an except from that memo: “The farther backward you can look, the farther forward you can see.” – Winston … Read More

So Value Investing Is Not Dead According To Goldmans

Johnny HopkinsValue Investing News Comments

I had to smile when I read this article on Bloomberg titled, Goldman Sachs Mulls the Death of Value Investing. The article states: There isn’t much value in value investing these days. The value-factor strategy of buying stocks with the lowest valuations and selling those with the highest, pioneered by Eugene Fama and Kenneth French and espoused by none other than … Read More

Bill Nygren – How To Apply A Private-Equity Approach To Public-Equity Investing

Johnny HopkinsBill Nygren Comments

Great interview with Bill Nygren and Win Murray from Oakmark Capital in last month’s Value Investor Insight Newsletter. On the subject of passive vs active investing Nygren says,  “I think it’s ironic that an increase in the number of dollars invested without thought as to where value is and isn’t would make the game impossibly difficult for those of us who do think … Read More

A Very Simple Formula For Figuring Out How Many Stocks To Hold

Johnny HopkinsInvesting Strategy Comments

Here at the Acquirer’s Multiple we believe your equally weighted portfolio should consist of 20-30 stocks generated from our Deep Value Stock Screens. In general terms, holding more stocks leads to greater diversification, and lower volatility, but is harder to manage and requires more purchases. Fewer stocks reduces the number of purchases, but leads to great volatility, and magnifies the … Read More

Athanassakos Rebukes Another Bogus Study That ‘Proves’ Value Investing Doesn’t Work

Johnny HopkinsGeorge Athanassakos Comments

George Athaassakos recently wrote a great article that illustrates why most studies that ‘prove’ value investing doesn’t work, are not entirely accurate. Here’s an excerpt from that article: A new study from Arizona State University, titled Do Stocks Outperform Treasury Bills?, is turning heads and gives ammunition to those who oppose active management to further bash stock pickers. The study, … Read More

Jim Rogers Warns The Biggest Crash In Our Lifetime Is Coming

Johnny HopkinsJim Rogers Comments

According to Business Insider, Jim Rogers says the biggest crash in out lifetime is on its way. Rogers said: It’s going to be the biggest in my lifetime and I’m older than you. No, it’s going to be serious stuff. We’ve had financial problems in America — let’s use America — every four to seven years, since the beginning of the … Read More

Aswath Damodaran – What’s Next? A Sharp Surge In Stock Prices Or A Sharp Correction?

Johnny HopkinsAswath Damodaran Comments

Great article and video by Aswath Damodaran called A Tale of Two Markets: Politics and Investing! Damodaran says, “Seldom has there been such a divide between those who believe that we are on the verge of a massive correction and those who equally vehemently feel that this is the cusp of a new bull market, and between those who see unprecedented economic … Read More

Joel Greenblatt Says Todays Investors Can Win By Zigging When The Market’s Zagging

Johnny HopkinsJoel Greenblatt Comments

In a recent article at Bloomberg, Joel Greenblatt said, “Passive investing suits some, but isn’t discerning”, and “Investors can win by zigging when markets zag”. Here’s an excerpt from that article: The shift to passive strategies that hug stock market indexes is likely to continue, but that’s not all bad for active stock pickers, said Joel Greenblatt, the co-chief investment officer … Read More

Latest Interview: Mohnish Pabrai Says Look For Businesses With Very High Uncertainty

Johnny HopkinsMohnish Pabrai Comments

Here’s a recent interview with Mohnish Pabrai on the Steve Pomeranz Hour in which he discusses his value investing strategy and how he finds great opportunities. Here’s an excerpt from that interview: Mohnish Pabrai: The key trait of an investment that is likely to do well exhibits low risk coupled with high uncertainty. Because when you have high uncertainty, markets … Read More

Cash-Rich Companies Are King In The Stock Market Right Now

Johnny HopkinsValue Investing News Comments

One of the things we like to focus on when selecting stocks for our deep value stock screens here at The Acquirer’s Multiple are companies with strong balance sheets. In a recent article Business Insider reports that cash-rich companies are king in the stock market right now. The article states that shares of firms with strong balance sheets are up 11% since … Read More

George Athanassakos – Let’s Stop Bashing Active Management

Johnny HopkinsGeorge Athanassakos Comments

Great article by George Athanassakos, a Professor of Finance and the Ben Graham Chair in Value Investing at Ivey Business School, in which he answers two difficult questions regarding active management: Why is it almost impossible for reported numbers to show that active managers beat benchmarks? But beyond that, what may make it actually difficult for active managers to outperform benchmarks? Here’s an … Read More

Steven Romick – Avoiding The Worst Performing Stocks Can Lead To Outperformance – Here’s How

Johnny HopkinsSteven Romick Comments

Steven Romick at FPA has just put out a great paper called, Two Decades of Winning by Not Losing. It’s a great illustration of how you can outperform in the stock market by avoiding the worst performing stocks. Here’s an excerpt from that paper: Thanks to the accelerated increase of passive investing – now around 40% of the U.S. market – I’m … Read More

Rob Arnott – Links Between U.S. Stock Returns And U.S. Presidents Are Bogus

Johnny HopkinsRob Arnott Comments

A new report released by Rob Arnott and the team at Research Affiliates shows that investors should exercise extreme caution when interpreting historical investment data as it relates to politics. Here’s an except from that report: Our results underscore the importance of exercising caution when interpreting historical investment data, including as it relates to politics.  As Harvey, Liu, and Zhu … Read More