When Charles brandes was young, he worked as a stockbroker in the company of Graham, the godfather of Wall Street, and was personally taught by him. Brandes Investment Partnership Company was established on 1974. In the past 40 years, the assets managed by companies in brandes have increased from the initial $65,438+$300 million to $50 billion. In the past 20 years up to 2007, the average rate of return of global equity funds he managed reached 19.2 1%, while the American equity funds he managed in the past 10.
In his investment career of more than 40 years, brandes has always adhered to Graham's value investment law: looking for those "unpopular stocks" whose value is underestimated and ignored by the market, that is, "picking up cigarette butts", and selling them after the company's value is recognized and the stock price rises to a certain extent.
In brandes's view, real investment is a long-term concern for the actual value of the company. Investors who only consider quarterly returns, their market behavior can not be investment, but speculation. He believes that the operation mode of fast-forward and fast-out is opportunistic. "Being a speculator will not be better than being an investor." For example, during the bear market from 1974 to 1975, although the value investors did not get very big profits, in the long run, these people still got satisfactory profits.
Brandes wrote in his book "Value Investment Today" that investors should be patient when looking for companies whose value can be accurately measured and waiting for the shares of companies whose value can be accurately measured to be sold at a price lower than the value, especially when the stock price meets the selling conditions.
Brandes believes that the pricing of stocks is actually a discounted valuation of their future earnings and cash flows, and these earnings and cash flows depend on market expectations. For hot growth stocks, because their share prices are in the high valuation area, once the unexpected income drops, their share prices will drop sharply. Even if there is a performance surprise, due to the high expectations of the market before, when the "surprise" comes, the share prices of these growth stocks may still fall. In contrast, the price of value stocks is cheaper and the market expectation is very low, so any news of its performance may exceed the market expectation. This is also one of the reasons why value stocks perform better in the long run.
Investment style and strategy
Brandes thinks that predictive information is not helpful for stock investment, and likes to invest in neglected "unpopular stocks". He attaches great importance to the integrity and shareholding of the company's management, and invests 30%-60% of his funds in high-quality bonds and special stocks, with an average shareholding time of 3-5 years.
His investment strategy requires stocks: first, the company should have a strong balance sheet; Second, it has a reasonable valuation; Third, the management of the company has integrity and sufficient shareholding.
Enlightenment to us
Investment based on value, then patience! Be patient! Be patient!