savageinfidel

Here's one of the better explanations I've recently read on the idea of fundamental analysis or "value" investing (from the Ideas Report: Buying a stake in a publicly traded company is deceptively easy. Log into your brokerage account, type in the ticker of the company whose stock you wish to buy, and— voilà !—you own a stake in the enterprise. Many investors don’t even refer to companies by their name; they simply invoke the ticker symbol. The ease with which stocks are bought and sold obscures the underlying nature of a stock market transaction and invites bad decision-making. The trick is to avoid thinking of a stock as a readily disposable piece of paper and instead consider that you are buying a percentage of a business whenever you purchase a share of stock. Read the whole thing here

Andy Kern and Welsey Gray are two finance doctoral student who also run the blog Empirical Finance Research . They've just put a study up on SSRN titled " Fundamental Value Investors: Characteristics and Performance ." In it, they examine the investment recommendations of a fairly large and sophisticated community of fundamental value investors (the folks at Valueinvestorclub.com ): The data in this study are collected from a private internet community called Valueinvestorsclub.com (VIC), proclaimed by the founders to be an “exclusive online investment club where top investors share their best ideas.”1 The site has been heralded in many business publications as a top-notch resource for anyone who can attain membership (Financial Times, Barron’s, Business Week, and Forbes among others). The site was founded by Joel Greenblatt and John Petry, both successful value investors and managers of the large hedge fund Gotham Capital. It was created with $400,000 of start-up ca...

Seth Klarman, is the president of Boston hedge fund the Baupost Group. He's known as one of the savviest value investors around, having earned a 26% average annual return over the last 26 years. In fact, he was asked to write the foreword to the latest edition of Graham and Dodd's classic "Value Investing." Here's an interview he gave to the Harvard Business School Bulletin back in December. In it, he talks about why he's a value investor, target returns (he doesn't believe in them), the credit crisis, and much more. Read it here