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. Below is a list of defining moments that in my opinion has molded value investing to what it is today.
- 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”.
- 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 publics value investing wikipedia.
- 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. In addition, Munger influences Warren Buffett to run a more concentrated portfolio.
- 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. Although, many at the time questioned Value Investing, the time tested strategy would prove it still works as high flying stocks get crushed when the bubble finally bursts.
- 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 produces outstanding returns.
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Excellent post! Thanks for sharing it. I plan to include your article in my weekly carnival review this Friday.
Best Wishes,
D4L
Thanks for the compliment D4L, I look forward to your post.
You might have started with the 1934 publication of Benjamin Graham’s “Security Analysis.”
Thanks for the comment Magen. I agree with you 100%, but truth is I left out many value investing moments. For example, Bill Miller’s streak comes to an end? Warren Buffett dispells EMT (Washington Post),etc.Again, Thank you for visiting my website.
I don’t get the sissy comment. An article entitled “Confessions of a Fallen Hedge-Fund Prince” that the Sykes site links to directly http://www.conntact.com/article_page.lasso?id=41423 says this guy lost everything!??!?!?!? How that justifies the “Sissy (I mean Value) Investor” comment is ludicrous.
How can you disprove Value Investing’s methods as Warren Buffett, Walter Schloss, Charlie Munger, Bill Ruane, etc. have practiced it is not worth the over $100 billion dollars and more they have generated from using the methods? You can’t because all this guy Sykes did was lose less than $3 million dollars. A paltry amount in comparison to Value Investing.
Great! Now, let’s see the 5 most imporant FUTURE moments in value investing…
take a stab at it….
Will do….