FDRR - 'May The Force Be With You'
Summary
- They may be far fewer in number than they used to be but traditional value investors are still out there, harnessing the power of “the force” in markets.
- Investors still interested in “thinking” their way to wealth (rather than giving in to the dark side) would do well to learn from these masters of their craft.
- Because the opportunity set may be greater today than ever before.
Several years ago, I wrote a post titled, “ There Has Never Been A Better Time To Be A Thinking Investor ,” which featured this quote from Warren Buffett:
“What could be more advantageous in an intellectual contest – whether it be bridge, chess, or stock selection than to have opponents who have been taught that thinking is a waste of energy?” – Warren Buffett , 1985 Berkshire Hathaway Letter to Shareholders
Buffett was extolling the virtues of employing a traditional value investing discipline in markets at a time when many were beginning to embrace the “ Efficient Market Hypothesis ” leading them to adopt a passive approach .
Obviously, that trend has only gained a great deal of momentum in the nearly four decades since, thus the advantage for “thinking” investors has grown commensurately.
This trend has now gone so far that some, like hedge fund manager David Einhorn, claim that value investing may, in fact, be dead.
To be clear, Einhorn, much like Buffett did years ago, sees the demise of traditional value investing as a tremendous advantage to the few adherents remaining, a topic he discusses in great detail in a wonderful recent podcast interview with my friends, Grant Williams and Bill Fleckenstein .
In many ways, dedicated value investors like Einhorn have become like Star Wars’ Jedi masters, “a once powerful presence in the markets forced into hiding,” as another friend of mine, Eric Cinnamond, writes.
Eric is an accomplished Jedi master in his own right who generously shares his views (from his metaphorical cave on Tatooine) at palmvalleycapital.com. I fervently read everything he writes.
Also effectively taking advantage of the massive Death Star the stock market has now become is dedicated value veteran, Chris Bloomstran. Wielding his lethal light saber of wit and wisdom over on Twitter, Chris brings a degree of expertise and levelheadedness to the social media platform that is far too rare. For this reason alone, he’s a must follow account for me.
They may be far fewer in number than they used to be but traditional value investors are still out there, harnessing the power of “the force” in markets. Investors still interested in “thinking” their way to wealth (rather than giving in to the dark side) would do well to learn from these masters of their craft. Because the opportunity set may be greater today than ever before.
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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'May The Force Be With You'