The Art of Value Investing: How the World's Best Investors Beat the Market
Says Bill Ackman of Pershing Square Capital Management about The Art of Value Investing
: "I learned the investment business largely from the work and thinking of other
investors. The Art of Value Investing is a thoughtfully organized compilation of some of
the best investment insights I have ever read. Read this book with care. It will be one of
the highest-return investments you will ever make." Based on interviews with the
world's most-successful value investors,
The Art of Value Investing offers a comprehensive set of answers to the questions every
equity money manager should have thought through clearly before holding himself or herself
out as a worthy steward of other people's money. What market inefficiencies will I try to
exploit? How will I generate ideas? What will be my geographic focus? What analytical edge
will I hope to have? What valuation methodologies will I use? What time horizon will I
typically employ? How many stocks will I own? How specifically will I decide to buy or
sell? Will I hedge, and how? How will I keep my emotions from getting the best of me? Who
should read The Art of Value Investing ? It is as vital a resource for the just ]starting
]out investor as for the sophisticated professional one.
The former will find a comprehensive guidebook for defining a sound investment strategy
from A-to-Z; the latter will find all aspects of his or her existing practice challenged
or reconfirmed by the provocative thinking of their most-successful peers. It also is a
must ]read for any investor -- institutional or individual -- charged with choosing the
best managers for the money they are allocating to equities. Choosing the right managers
requires knowing all the right questions to ask as well as the answers worthy of respect
and attention -- both of which are delivered in The Art of Value Investing .
Introduction 1
Chapter 1 "All Sensible Investing Is Value Investing" 5 What It Means to Be a
Value Investor 6 Does Quality Matter? 13 The Value of Growth 19 The Value Mindset 25 Part
ONE Field of Play 33
Chapter 2 Circle of Competence 35 The Right Size 36 Industry Preference 45 Where in the
World? 57
Chapter 3 Deficient Market Hypothesis 65 The Human Element 66 It's a Matter of Time 74
Chapter 4 Fertile Ground 81 In Search of Uncertainty 82 Special Situations 86 Operating
Turnarounds 93
Chapter 5 Generating Ideas 99 Behind the Screen 99 Follow the Lead 106 Reliable Sources
111 Part TWO Building the Case 115
Chapter 6 Cutting Through the Noise 117 Second-Level Thinking 118 Macro versus Micro
120 Business First 127 What Quality Means 131 Crunching the Numbers 135 What Could Go
Wrong? 139 From the Top 147 How Important Is Management? 147 Handicapping the Jockeys 149
Red Flags 157 Catalysts 164 Getting It Done 169 Organizing Principles 174
Chapter 7 Getting to Yes 183 Cash (Flow) Is King 184 Multiple Angles 190 The Informed
Buyer 192 Model Behavior 194 Playing the Odds 199 Theories of Relativity 202 Pulling the
Trigger 206 Part Three Active Management 213
Chapter 8 The Portfolio 215 Concentration versus Diversification 215 The Size That Fits
222 Cognizance of Correlation 227
Chapter 9 Playing the Hand 233 Trading Mentality 233 Dealing with Adversity 239 Taking
a Stand 248 Attracting Activists' Attention 251
Chapter 10 Guarding Against Risk 257 Margin of Safety 258 Building a Position 261 Cash
Management 263 Midas Touch 267 Hedging Bets 268 To Short or Not to Short? 268 Value
Destroyers 271 Portfolio Hedging 276 Is Shorting Inherently Evil? 277
Chapter 11 Making the Sale 281 Why to Sell 282 Selling by the Numbers 286 Getting the
Timing Right 290 Sale Process 293 Part four Of Sound Mind 297
Chapter 12 Of Sound Mind 299 Competitive Spirit 300 Independent Thought 303 Perpetual
Student 306 To Err Is Human 309 Be Ever So Humble 312 The Final Word 315 About the Authors
317 Index 319
336 pages, Hardcover