Why value investing ?

Okay, so why blog about value investing ?

It's not like I'm the only one interested in this. So what can I bring to the value investing discussion that isn't already out there ?

What I hope to do is bring out a few thoughts on investing that way from the perspective of Western Europe, but with a clear influence from the greats in the field, for the most part active in the U.S.

I'm also a firm believer in the greatness of the economic model of the western world, so that you won't see me focusing much on emerging markets.

I discovered value investing not that long ago, in the dark days following the fall of Lehman Brothers with the financial world more or less in absolute panic. My own employer was facing a tough period and the lack of new projects gave me quite some time during my work hours (hope my boss never hears about this !) to explore different publications starting with Warren Buffet's famous letters to his shareholders.

They were (and still are) a fascinating read. In rapid succession, I then read The Intelligent Investor, One Up on Wall Street, Beating the Street and even Security Analysis. I also got my hands on a copy of Klarman's Margin of Safety. In the meantime I devoured annual reports, one after the other, and even though I already had a good grasp of accounting due to my job, I delved into certain intricacies of IFRS and US GAAP thanks mainly to insights from co-workers more knowledgeable than me about them.

I tried, in these last few years, of straying from value investing, but each time I bought a hot growth stock or something of the like, I always ended up selling because I just couldn't sleep at night. Seems I'm even stuck with value investing !

I can't complain though. Compared to the 'market' which, in my case, I determined is the simple average of the results of the S&P 500 and of the EuroStoxx 50 (not corrected for currency fluctuations), I've done better each year for 4 years running now.

I may underperform in the future, but for now, that's been quite satisfactory for me.

A further kick I get out of this is that a very good friend of mine, who in the past was adamant that owning shares in individual companies was the only way to go, completely changed tactics after 08 and since then has only held index funds. I'm out to try and prove that indexes can be beaten !