Value Investing: From Graham to Buffett and Beyond
Review by Steven Rosales
What Is It About?
Value Investing is written by Bruce Greenwald, a professor at the Columbia Business School. As the title suggests this book is about value investing. It is divided into three parts: an overview of what value investing is; an examination of three specific approaches to value investing; and case studies of several well known value investors and the ways they put the tenets of value investing into practice.
What Did I Get Out Of It As A New Investor?
This is a great book to get a solid grasp on value investing. While "The Little Book of Value Investing " is a good introductory book, Value Investing takes the next step and provides intermediate tools to assist in the practice of value investing.
This book examines three methods of performing a value analysis. The book first looks at value in principle, the breakdown of the present value of future cash flows. It next provides a means of understanding how to value the assets of a company. Finally, it examines the value of the assets with an incorporation of the earnings power of a company's brand – in other words, the company's franchise value. All three sections are then woven into a comprehensive analysis using company specific examples.
The Good News
This is a great intermediate level book for the new value investor. It moves beyond the simple idea of a discounted cash flow analysis and introduces you to an understanding of how and where to find value.
The Bad News
This book is written by a college professor and therefore reads like a college text. While not excessively technical, this book is not one to be read straight through. The better approach would be to enjoy this book over a few weeks' time – as the material is easier to digest chapter by chapter.
The Bottom Line
I found this book helpful and feel it is a very good book to own for any investor who has an interest in developing a better understanding of value investing but who is not ready to tackle more advanced texts.
Steven Rosales began investing about a year ago. His goals are simple: preserve capital, grow capital, and invest with a margin of safety. Steven is the author of Value Blog Review, a website devoted to presenting and discussing the best blogs, websites, and books for new investors.