In his latest interview on Asset TV, Wally Weitz discussed why value investing will always work because humans let their emotions drive what they do. Here’s an excerpt from the interview:
Well, I hope art matters because I’m not too good on science, but you know, I’ve been investing for 60 years, and I’ve been in the business for 50+. And I’ve seen a lot, but I’m still learning how to do it. Made lots of mistakes, some of them more than once, but that is how you learn – experiential learning. So, I’m a real believer that value investing not only works, but it always will work because humans let their emotions drive what they do. It’s the fear and greed that are timeless, and so I would say that studying behavioral finance, maybe that’s the art part, might be just as important as learning to build DCF models – that’s the science.
I have several younger colleagues that are much better than I am on the modeling and the technology, and they’ve got more energy than I do about jumping on planes to go visit companies and dig into the details. But every once in a while, maybe I’m able to point out that some danger lurking that I’ve noticed you know I’ve learned before, or if they’ve found something really good, maybe I can egg him on to take a more aggressive position than they otherwise do. So, I think maybe that’s my value added.
You can watch the entire interview here:
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