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The Value Investing Family Tree

Top 5 of the Week of February 1

We have a great selection for you this week. Check out Benjamin Graham’s legacy of significant value investors and the way they’ve shaped how we look at value investing. Read Larry Fink’s advice to companies to stop engaging in practices which can undermine your abilities to invest in the future. Join us looking at India and it’s rising stock popularity following the election of pro-business leader Narendra Modi in 2014. Avoid the herd instinct; make an informed decision to look at balancing your portfolio with Indian stocks. Consider Glenn Frey’s words and “Take it Easy”; see that January has proved a poor predictor for the rest of the year. And discover that most of the time, swans are white.


The “Father of Investing”

  • From Security Analysis (1934) and The Intelligent Investor (1949) which are still read today, and teacher to many investing legends that followed him; Benjamin Graham IS value investing
  • Discover the legacy he left behind him and the influence he had on other value investors who took his ideas and evolved them
  • The generation that followed proved why Graham’s strategies worked
  • And the following generation took it further discovering how you can develop your organization and personality to be successful with your own value investing

Source: VintageValueInvesting.com

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Commit to Long-Term Thinking

  • BlackRock CEO Larry Fink’s letter to CEOs around the world encourages companies to think long-term in their strategies for future investment and growth
  • “Today’s culture of quarterly earnings hysteria is totally contrary to the long-term approach we need.”
  • Companies have to be fluid and adaptable in the face of their external dynamics, but they should also build a strategic framework that promotes long-term value creation

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To Invest in India or Not? That is the Question

  • Reading this prompts us to ask if India (world’s 2nd largest population) will be the new driver of the global economy after China?
  • “There is nothing wrong with investing in India as part of a balanced portfolio,” but don’t be dazzled and go overboard on your risk profile
  • Beware that even though there are many listed stocks in India, very few are liquid. India has “3,474 listed stocks – but only 10% of these were investable by our definition (Stotz and Lu, 2014).”

Is India the next big market to invest in? What do YOU think?

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Eagles’ Singer Offers Sound Investment Advice

  • Following the recent market turbulence in January, Fran Kinniry urges us to follow the late Eagles’ legendary singer-songwriter’s words and “Take it Easy.”
  • Despite a rocky start to the year, the equity market’s performance is not doomed to follow the same trend as the first month
  • Expect “higher volatility in equity returns relative to an asset class such as fixed income and to expect that the volatility of volatility—the changes in volatility from one period to the next—will be higher as well.”
  • Refrain from reacting with emotion to the market’s volatility

What would you do in times of high volatility? Let us know in the comments below

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Black Swan Events can Change the World

  • With analysts offering an extreme diagnosis of recent events and predicting dire financial crises to follow, Morgan Housel denounces the “second coming of the Great Depression.”
  • It is worth bearing in mind “more money has been lost preparing for bear markets than in actual bear markets.”
  • Abnormal events do occur – black swans – but the probability is higher of common ones occurring. Do not look for rare outliers around every corner, most times swans are white

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Top 5 of the Week is a summarized collection of financial investment articles that we like and think you might like too. Having written thousands of pages of equity strategy and company research between us, we understand the allure of the ever-changing world of finance. Investing is an art form – and like everything, something you can work on and improve at. There are some excellent writers out there on the finance web, some offer a running commentary on today’s market, some are doing research, some have tips on how to Become a Better Investor, and some just lift the cloud of fog behind a lot of financial jargon. Each week we will keep you up to date with the top 5 articles worthy of your attention.


 

Anything you would like to discuss about this week’s top 5? Do you have another favorite that isn’t mentioned here? Feel free to add it below. Let’s start a discussion in the comments section!

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DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article. The Babinow Team doesn’t necessarily endorse any stocks or shares mentioned in the articles or the author of such articles linked to and summarized in Top 5 of the Week and cannot guarantee the accuracy of its information.