Michael Price’s Approach to Investing

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Mr. Price recommends the book, There is Always Something to Do by Peter Cundhill

ALWAYS something to do

Peter Cundill, a philanthropist and investor whose work has been praised by the likes of Warren Buffett, found his life changed forever when he discovered the value investment principles of Benjamin Graham and began to put them into action. There’s Always Something to Do tells the story of Cundill’s voyage of discovery, with all its ups and downs, as he developed his immensely successful investment strategies. In the context of recent financial upheavals and ongoing uncertainty, Peter Cundill’s wise and frequently funny reflections are more important than ever. In a seamlessly assembled narrative drawn from interviews, speeches, and exclusive access to the daily journal Cundill kept for forty-five years, Christopher Risso-Gill outlines Cundill’s investment approach and provides accounts of his investments and the analytical process that led to their selection. A book for everyday investors as much as professional investors and investment gurus, There’s Always Something to Do offers a compelling perspective on global financial markets and on how we can avoid their worst pitfalls and grow our hard-earned capital.

John Chew: I enjoyed the book, but there are no great insights for an experienced investor. But the stories of perseverance in the face of company problems/investments are helpful. 

Thanks to¬†sfriedman@santangels.com, (ask to subscribe to his free emails–how can you ask for more!?).

P.S. Mr. Price presents his approach to value investing. Use what can help YOU in YOUR OWN approach. Price practices a form of special situation investing. There are as many ways to invest as people who practice value investing.

4 responses to “Michael Price’s Approach to Investing

  1. I very much enjoyed the interview. Haven’t read Cundill’s book, but added it to my list.

    After watching Price’s interview, I did some digging to try and get a better idea of what his returns were like while he ran his mutual fund and more recently, his hedge fund. I didn’t come across exact figures, but I did find a lot of old interviews from the 90’s early 2000’s (in large part thanks to Value Walk’s resource page on Price) I also found a more recent interview from 2011 at Graham and Doddsville’s newsletter.

    In that interview, Price mentioned his investment style was basically two thirds value stocks (a diversified basket of cheap stocks relative to the value a private owner would pay for the business… sounds much like Graham, Dodd, and Schloss style stocks), and one third special situations. He described how his methods resulted in close to 20% annual returns for a long period of time, with his worst year (before 2008) being 5% down. He was only down twice in 35 years prior to 2008.

    He said in 08 he was down 30%, but quickly bounced back. But he also said in the last decade or so his strategy is yielding closer to 15% rather than 20%. However, he still feels this method of diversification, 67% value stocks, 33% special situations is a great way to compound money over time.

    His returns are not going to be as high as more concentrated value investors, but his style seems to resemble a more quantitative approach similar to Graham and Dodd.

    As you mentioned in the post, it’s interesting to consider all the different styles of value investing and how different they can be, yet still be effective.

  2. i like michael price’s approach to sizing positions. i think it always makes sense to average into positions as you get more familiar with them. waiting forever to complete research, a la weschler/munger, and then hitting big hasn’t been my style. when sitting with a 10% position all at once, it seems way too stressful. better, in my opinion, to average into a deeply discounted stock across time. different strokes for different folks though and those guys have done quite well.

  3. Hi

    Recently read Peter Cundill book. Its an excellent book but might not appeal to everyone. Mr. Peter Cundill use to practice deep value investing style of Benjamin Graham. Peter suggest to buy stocks only when they are out of favour and he mostly seem to have invested in net net situations.

  4. Im gonna get Cundill’s book at the library this week to read. It seems interesting. As for Price, I think he is very smart and makes logical and rational bets on stocks. The HESS story is a good one.

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