The Art of Value Investing How the World's Best Investors Beat the Market

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  • Edition: 1st
  • Format: Hardcover
  • Copyright: 4/29/2013
  • Publisher: Wiley
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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.

Author Biography

JOHN HEINS is the cofounder and President of Value Investor Media, Inc., a media company founded in 2004 to provide investing ideas and insight to sophisticated professional and individual investors, and Editor-in-Chief of Value Investor Insight and SuperInvestor Insight. Previously, Mr. Heins was President and Chief Executive Officer of Gruner + Jahr USA Publishing, Bertelsmann AG's U.S. magazine subsidiary, Senior Vice President and General Manager of America Online's Personal Finance business, and a reporter and staff writer for Forbes magazine. He graduated magna cum laude from the University of Pennsylvania's Wharton School with a bachelor's degree in Economics and also holds an MBA from Stanford University's Graduate School of Business.

WHITNEY TILSON is the cofounder of hedge funds Kase Capital and T2 Partners, the Tilson Mutual Funds, Value Investor Media, Inc. and the Value Investing Congress. He coauthored the book, More Mortgage Meltdown: 6 Ways to Profit in These Bad Times, is a CNBC Contributor, has written for Forbes, the Financial Times, Kiplinger's, the Motley Fool and TheStreet.com, and was one of the authors of Poor Charlie's Almanack, the definitive book on Berkshire Hathaway Vice Chairman Charlie Munger. He was one of five investors included in SmartMoney's 2006 "Power 30," and was named by Institutional Investor in 2007 as one of "20 Rising Stars." Previously, Mr. Tilson was a founding member of Teach for America and the Initiative for a Competitive Inner City, and was a consultant at The Boston Consulting Group. He received an MBA with High Distinction from the Harvard Business School and graduated magna cum laude from Harvard College with a bachelor's degree in Government.

Table of Contents


Chapter 1: “All Sensible Investing Is Value Investing”

What It Means to Be a Value Investor

Does Quality Matter?

The Value of Growth

The Value Mindset

Part I: Field of Play

Chapter 2: Circle of Competence

The Right Size

Industry Preference

Where in the World?

Chapter 3: Deficient Market Hypothesis

The Human Element

It’s a Matter of Time

Chapter 4: Fertile Ground

In Search of Uncertainty

“Special” Situations

Operating Turnarounds

Chapter 5: Generating Ideas

Behind the Screen

Follow the Lead

Reliable Sources

Part II: Building the Case

Chapter 6: Cutting Through the Noise

Second-Level Thinking

Macro vs. Micro

Business First

What “Quality” Means

Crunching the Numbers

What Could Go Wrong?

From the Top

How Important is Management?

Handicapping the Jockeys

Red Flags


Getting it Done

Organizing Principles

Chapter 7: Getting to Yes

Cash (Flow) is King

Multiple Angles

The Informed Buyer

Model Behavior

Playing the Odds

Theories of Relativity

Pulling the Trigger

Part III: Active Management

Chapter 8: The Portfolio

Concentration vs. Diversification

The Size That Fits

Cognizance of Correlation

Chapter 9: Playing the Hand

Trading Mentality

Dealing with Adversity

Taking a Stand

Attracting Activists’ Attention

Chapter 10: Guarding Against Risk

Margin of Safety

Building a Position

Cash Management

Midas Touch

Hedging Bets

To Short or Not to Short?

Value Destroyers

Portfolio Hedging

Is Shorting Inherently Evil?

Chapter 11: Making the Sale

Why To Sell

Selling By the Numbers

Getting the Timing Right

Sale Process

Part IV: Of Sound Mind

Chapter 12: Of Sound Mind

Competitive Spirit

Independent Thought

Perpetual Student

To Err is Human

Be Ever So Humble

The Final Word

About the Authors


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