Product Description

"As with his weekly column, James Montier′s Value Investing is a must read for all students of the financial markets. In short order, Montier shreds the ′efficient market hypothesis′, elucidates the pertinence of behavioral finance, and explains the crucial difference between investment process and investment outcomes. 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!"
—Seth Klarman, President, The Baupost Group LLC

The seductive elegance of classical finance theory is powerful, yet value investing requires that we reject both the precepts of modern portfolio theory (MPT) and pretty much all of its tools and techniques.

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 2008/09 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.

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.

Product Details

• Amazon Sales Rank: #9907 in Books
• Published on: 2009-10-23
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 414 pages

From the Inside Flap
"James Montier combines a profound understanding of behaviorial finance with a fierce adherence to the tried and tested principles of value–investing. He is always readable, thought–provoking and, above all, correct."
—Edward Chancellor, author of Devil Take the Hindmost: A history of financial speculation

"James′ latest effort is a must read. It combines great academic and practitioner approaches written in a humorous and entertaining style. It has practical real world examples that don′t require advanced mathematics to comprehend. I advise everyone to read and study this wonderful book. All of my students now have Value Investing: Tools and Techniques for Intelligent Investment to add to their required reading."
—Mark Cooper, Partner at Omega Advisors & Adjunct Professor at Columbia Business School

"A preponderance of evidence shows that successful long–term investing requires a strong value orientation and a proper temperament, virtues commonly blunted by behavioural and incentive–based biases. Montier, a leading light in value investing and behavioural finance, shows you what’s wrong with standard investment thinking and offers important insight into how to improve your process. Read Value Investing, live its lessons, and prosper."
—Michael J. Mauboussin, Chief Investment Strategist at Legg Mason Capital Management, and author of Think Twice: Harnessing the Power of Counterintuition

From the Back Cover
"As with his weekly column, James Montier′s Value Investing is a must read for all students of the financial markets. In short order, Montier shreds the ′efficient market hypothesis′, elucidates the pertinence of behavioral finance, and explains the crucial difference between investment process and investment outcomes. 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!"
—Seth Klarman, President, The Baupost Group LLC

The seductive elegance of classical finance theory is powerful, yet value investing requires that we reject both the precepts of modern portfolio theory (MPT) and pretty much all of its tools and techniques.

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 2008/09 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.

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.

About the Author
James Montier is a member of GMO′s asset allocation team. Prior to that he was global strategist for Société Générale and Dresdner Kleinwort. He has been the top rated strategist in the annual extel survey for most of the last decade. He is also the author of three other books – Behavioural Finance (2000, Wiley), Behavioural Investing (2007, Wiley) and The Little Book of Behavioral Investing (Forthcoming, Wiley). James is a regular speaker at both academic and practitioner conferences, and is regarded as the leading authority on applying behavioural finance to investment. He is a visiting fellow at the University of Durham and a fellow of the Royal Society of Arts. He has been described as a maverick, an iconoclast, an enfant terrible by the press.

Customer Reviews

Uncommon common sense
Well argued, easy-to-read analysis of why value investing works. Missed out on 5 stars only because its genesis as a collection of disjoint articles showed through and slightly gets in the way if you want to read it cover-to-cover. Having said that, this structure makes it easier to dip into if you choose to approach the book that way.

As each chapter begins with a text box summarizing the main point in a single para, then a one page summary in a few bullets, it is easy to decide if you are interested in each topic. Personally I skipped straight to the main text in order to minimize the feeling of repetition - though each to their own learning style.

At the end of the book you'll have a set of solid ideas on what you should be doing. Do not expect a simple recipe for how to cook up a perfect portfolio, though. There is a lot of detailed work required to implement those ideas - which is no doubt where Mr Montier and his fellow value investment experts earn their money!

A bit cheeky Mr Montier...but I still enjoyed it
Whilst it's always interesting to read Montier's views on investing - especially the details of the cognitive traps we regularly fall into (which are the reason that markets are not and never will be fully efficient) - this book is actually a collection of the regular papers he wrote whilst an analyst at two different investment banks in London (DKW & soc-gen).

Even though they are grouped into themes, the different chapters are mostly stand alone thought pieces that give Montier an outlet for his frustrations with the majority of investors. It's a bit cheeky of him to sell a collection of past papers (however interesting and well put together) as a 'how to' book on value investing. It's more of a "world according to James". Still, I've enjoyed what I've read already & it's always good to read a contrarian view on the market from an insider. Most insiders are too worried about "career risk" or too focused on the next bonus to be as honest. Shame.

For readers looking for a more practical guide for the individual investor I'd recommend John Kay's excellent "The Long & Short of it"

The Long and the Short of it: A Guide to Finance and Investment for Normally Intelligent People Who Aren't in the Industry