10 Things We Can Learned from The Little Book of Value Investing by Christopher H. Browne

The Little Book of Value Investing by Christopher H. Browne
Here are 10 key takeaways that can be gained from reading The Little Book of Value Investing:
  • Buy stocks like you buy everything else, when they are on sale.
  • Browne uses a three-legged value stool that consists of the price-to-book (P/B) ratio, price-to-earnings (P/E) ratio, and the appraisal method to measure the intrinsic value of a stock
  • It’s a marathon, not a sprint.
Here are 10 key takeaways that we gained from reading The Little Book of Value Investing, "I have no faith in my ability, or in the ability of most others, to predict the direction of stock prices over the short term.":
  • Buy when the insiders buy.
  • When quarterly earnings of a stock fail to meet analyst expectations, investors sometimes panic and dump their shares.
  • The investment world now equates activity with intelligence.
  • Apparently, FOMO is not just a thing in the social media, but also in the investment world
  • Look to invest globally, but in the developed markets.
  • Browne likes simple businesses where there is ongoing demand for its products and services.
To sum up, value investors look to buy stocks below their intrinsic value with a margin of safety, but it is easier said than done. Even when armed with our facts and research, we can still be swayed by our emotions and the markets.
So if you ever need some words of advice whenever it feels like you’re going against the tide, Browne writes:
‘Value investors are more like farmers. They plant seeds and wait for the crops to grow. If the corn is a little late in starting because of cold weather, they don’t tear up the fields and plant something else. No, they just sit back and wait patiently for the corn to pop out of the ground, confident that it will eventually sprout.’