JAMES MONTIER VALUE INVESTING PDF

Montier makes his arguments with clear insight and spirited good humor, and then backs them up with cold hard facts. Buy this book for yourself, and for anyone you know who cares about their capital! In this important new book, the highly respected and controversial value investor and behavioural analyst, James Montier explains how value investing is the only tried and tested method of delivering sustainable long-term returns. James shows you why everything you learnt at business school is wrong; how to think properly about valuation and risk; how to avoid the dangers of growth investing; how to be a contrarian; how to short stocks; how to avoid value traps; how to hedge ignorance using cheap insurance. In this book James shares his tried and tested techniques and provides the latest and most cutting edge tools you will need to deploy the value approach successfully. It provides you with the tools to start thinking in a different fashion about the way in which you invest, introducing the ways of over-riding the emotional distractions that will bedevil the pursuit of a value approach and ultimately think and act differently from the herd.

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Shelves: investment A reasonable defense of value investing in general terms but disappointingly shallow, highly repetitive and weak on individual stock selection perhaps because the author does not himself invest in individual stocks "given time constraints".

A great quote from the book comes from Third Avenue Management who said "DCF is like the Hubble telescope, if you move it an inch you end up studying a different galaxy". There were hundreds of similar quotes from Templeton to Buffet to Newton who failed as an investor incidentally.

While the quotes were interesting they were not well integrated into the text and came off as somewhat gratuitous. That said, readers less familiar with value investing may appreciate the simplified approach and general advice. My advice: rather purchase the equivalent works of Greenwald, Dremen, Klarman or Graham and if you are interested in Montier, read his other book "Bulls-eye Investing".

He argues that value investing is the only approach that puts risk management at the heart of portfolio construction. The book can be divided into two themes: assessing valuation and risk, and the importance of investor behavior in determining outcomes.

According to Montier, the real aim of asset management was best expressed by Sir John Franklin Templeton: "to maximize real total returns after tax". A common distraction Montier strongly opposes is the capital asset pricing model CAPM , which he calls "insidious".

Montier cites a study by Jeremy Grantham a great investor and colleague of his at GMO demonstrating that low beta stocks have outperformed high beta for decades, exactly counter to the premise of CAPM. Following this line of thought, he sees value-at-risk VaR systems as hopelessly flawed, despite their pervasive use. The only risk that matters is permanent capital impairment, a view he attributes to Benjamin Graham, who is considered by some to be the founder of value investing.

Montier also has litte interest in common applications of discounted cash flow DCF models because they tend to instill falsely precise visions of the future. He cites the often inverse correlations between analyst forecasts and actual results, as evidence against this practice.

Although, he does believe DCFs are useful in reverse engineering market-implied assumptions. Those figures can then be compared to base rates historical experience for similar businesses in similar industries. Further to this point, Montier is more focused on reversion to the mean as the backbone of valuation, rather than prescient insight. Value investing often involves going against the crowd, and hence involves social pain.

So value investors are the financial equivalent of masochists". In his view, a successful long-term value investor must by definition be eccentric, willing to be different from the crowd to achieve different results. I think the book would benefit from additional editing to remove repetition and better organize the concepts, as the discussion wandered at times. He could also be clearer on what exactly investors should do, although what we should not do is well-explained.

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Montier makes his arguments with clear insight and spirited good humor, and then backs them up with cold hard facts. Buy this book for yourself, and for anyone you know who cares about their capital! In this important new book, the highly respected and controversial value investor and behavioural analyst, James Montier explains how value investing is the only tried and tested method of delivering sustainable long-term returns. James shows you why everything you learnt at business school is wrong; how to think properly about valuation and risk; how to avoid the dangers of growth investing; how to be a contrarian; how to short stocks; how to avoid value traps; how to hedge ignorance using cheap insurance. Crucially he also gives real time examples of the principles outlined in the context of the 09 financial crisis. In this book James shares his tried and tested techniques and provides the latest and most cutting edge tools you will need to deploy the value approach successfully.

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[PDF] [EPUB] Value Investing: Tools and Techniques for Intelligent Investment Download

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