Graham And Doddsville

The Value Investing Capital of the World

Archive for the ‘Understanding Value’

Cyprus Value Investing Seminar – September 29 & 30, 2016

August 24, 2016 By: webmaster Category: Understanding Value, Value Investing Events


I hope you’ll join me in Cyprus on September 29 & 30, 2016 for a different kind of investment seminar.

  • One where you can:
    • see old friends,
    • make new friends,
    • learn from other value investors just like you,
    • share ideas but also the thinking behind the idea,
    • share your interest and fascination with value investing,
    • network with other value investors through speed dating and a detailed profile of all speakers and participants, and
    • become a better investor!

When:    Thursday 29 and Friday 30 September 2016

Where:  Nicosia on the Island of Cyprus

Speakers: Pavel Begun (3G Capital); Sebastien Lemonnier (Mansartis); Steve Gorelik (Firebird Management); Ernst Gronblom & Pasi Havia (Helsinki Capital Partners); Simon Caufield (Family Office); Diego Moreno (Forum Family Office); Raman Minhas (Private Fund); David Kessler (Robotti & Company Advisors); Tim du Toit (eurosharelab); Charis Charalambous (Active Banking Sector Fund); Florentzos Kassoumis (FAMco); Sophocles Sophocleous (FatAlpha).

For more information or to registor for the event see:

(or drop me a note at and I will try to help)

University of Auckland Investment Club Bulletin

May 28, 2015 By: webmaster Category: Irving Kahn, Mohnish Pabrai, SuperInvestors, Understanding Value

I just came across the first edition of a newsletter from the University of Auckland Investment Club.  The inaugural issue features a profile of Irving Kahn, Notes from the 2014 Graham and Dodd Breakfast and A Conversation with Mohnish Pabrai.  It is also packed with student pitches, member highlights and more.

Click here to read the First Edition of the University of Auckland Investment Club Bulletin.

The Value Gene – Buffett, Klarman and Evolution

December 11, 2012 By: webmaster Category: Behavioral Finance, Benjamin Graham, Security Analysis, Seth Klarman, SuperInvestors, Understanding Value, Warren Buffett

On November 1, 2011, Charlie Rose interviewed Superinvestor Seth Klarman for the Facing History and Ourselves New York Benefit Dinner.  If you have not seen this interview, it is fantastic.

One of my favorite nuggets is the following (see 25:30):

Warren evolved through 3 stages:  He went from buying cigar butts and getting the last few puffs for free, to buying great businesses at really cheap prices, to buying and holding great businesses at so-so prices.  And maybe even this new area of buying weird securities from crappy businesses at better than market prices – like B of A preferred or whatever… I’m still in phase one.  We’re still buying cigar butts, there’s a good business there in buying them and it’s a lot of fun.
Another quote, which really struck a chord (see 22:20):
I think Warren captured the idea himself in his 1964 (sic) article The Superinvestors of Graham and Doddsville and in it he talks about – value investing is like an innoculation – you either get it right away, or you never get it.  And I think it’s just true.  I actually think there’s just a gene for this stuff.  Whether it’s a value investing gene or a contrarian gene.
It seems that researchers are beginning to confirm Klarman’s statement.  This morning, MarketWatch published an article titled The missing link of investing: Science may explain why we trade.

When asked why we trade, many of us would answer with traditional, rational responses. We see an undervalued company. We like a business, a brand or a strategy. Or, it’s the flip side: We’re selling because we may think the fundamentals point to trouble. We see an investment that looks overvalued.

As we know, most people follow the herd.  But what about contrarian investors – the ones featured on this blog – who consistently move against the herd?

It’s what the academics describe as a relatively new intersection of financial economics, psychology, and evolutionary biology including new interpretations of mutation. And the upshot, to me at least, is that we may not be as deliberative as we might think when it comes to trading decisions. In other words, we’re wired to trade a certain way.

According to Andrew Lo of MIT and Thomas J. Brennan of Northwestern claim that science evolution may explain both the herd mentality and also a contrarian one.

In other words, many of us are bound to the pack. A minority of us break away from it.

Both behaviors are necessary from an evolutionary standpoint because they’re necessary for the species to survive.  Every species needs its normal populations and its mutants.

I think I was just called a “mutant.”  I guess if that puts anywhere near the same group as Warren Buffett and Seth Klarman, then I am proud to be a mutant.

Click here to read the entire article The missing link of investing: Science may explain why we trade at

Click here to see An Interview with Seth Klarman and Charlie Rose.

Click here to learn more about Seth Klarman.

Danny DeVito Explains Value Investing in 3 Minutes

November 13, 2012 By: webmaster Category: Benjamin Graham, Columbia Business School, Understanding Value

The first time I saw this scene from Other People’s Money was in my value investing class.  I came across the clip several months ago, thanks to Walrusvalue, and just saw another reference to it on

In this clip from the 1991 comedy, Other People’s MoneyDanny DeVito gives a 3 minute explanation of value investing – Benjamin Graham Style – with the clarity of a Warren Buffett.

The Seven Immutable Laws of Investing

March 09, 2011 By: webmaster Category: Behavioral Finance, James Montier, Understanding Value

James Montier of GMO, LLC recently penned a piece titled “The Seven Immutable Laws of Investing.”  These “laws” are certainly not new to adherents of value investing.  However, I believe we need to constantly reinforce these laws, especially since they are often inconsistent with our natural tendencies.

So, now, for the moment of truth, I present a set of principles that together form what I call The Seven Immutable Laws of Investing.

1.  Always insist on a margin of safety

2.  This time is never different

3.  Be patient and wait for the fat pitch

4.  Be contrarian

5.  Risk is the permanent loss of capital, never a number

6.  Be leery of leverage

7.  Never invest in something you don’t understand

You can find the entire report here.  (Free registration is required)