Richard Oldfield: Simple But Not Easy–A Deep Value Investor Speaks

Richard

Simple But Not Easy

“Value investors are born not made.” Richard Oldfield

I am an investor similar to Walter Schloss and Peter Cundhill.

Simple But Not Easy Quotes
“One should invest in equities, which are volatile, only with a long-term perspective, and in the most volatile of equities with an especially long-term perspective – 5 years or more – and only with money which one can be sure of not needing in the next few years.”
“Different meanings of safety to different investors. For someone needing a lump of money in a year’s time, the only safe investment is a cash deposit or a short-term government bond. For someone with no imminent need of the money and a desire to accumulate capital and increase purchasing power in the long-term, it may be safer to invest in equities – volatile but with the historic and likely future characteristic of a high return after inflation – than to put money on deposit with the risk that over the years the real value of the investment will be eroded by inflation.”
“A share looks cheap; you buy it; it goes down and looks cheaper; you buy more; it goes down and down, getting cheaper and cheaper, until it reaches what practitioners call euphemistically the ultimate cheapness – zero. This is what is generally called the value trap.”
“A long-term temperament as well as long-term circumstances A Japanese man went into a bank to change some Japanese notes into sterling. He was surprised at how little he got. “Please explain,” he said to the cashier. “Yesterday I was changing same yen for sterling and I received many more sterling. Why is this?” The cashier shrugged his shoulders. “Fluctuations,” he explained. The Japanese man was aghast. “And fluck you bloody Europeans too,” he responded, grabbed the notes, and walked out. Fluctuations matter if the money could be needed soon. Money invested in equities must not be money which will be wanted in a year or two, or might be urgently wanted at any time, because there is a fair chance that the moment when it is needed will be a bad one for the stock market and the investor will therefore be selling at low prices. If investors think they might need the money soon, the message is clearly stay away: the chance of a minus return is just too great. Even if investors are in a position to allocate a fair amount to equities, they should not necessarily do so. It is not enough that the circumstances are right. Investors need to be temperamentally inclined to the sort of long-term investment which equities are. Long-termness must be subjective as well as objective. The fact that the circumstances of a particular investor might objectively lead to a certain viewpoint does not mean that he or she necessarily has that viewpoint. A baby is in an objective position to take a long-term view, but will not actually look beyond the next feeding-time.”
“The great advantage of the property-centred policy was that in a panic property was very difficult to sell. The British kept their property because they could not do otherwise, and prices always recovered. They were prevented by the illiquidity of property from selling at the bottom.”
Richard Oldfield, Deep Value Investor from the UK VIDEO Worth the view and to be seen with this presentation:
2016_Oldfield  Presentation on March 2, 2016

3 responses to “Richard Oldfield: Simple But Not Easy–A Deep Value Investor Speaks

  1. His presentation is an excellent example of WHY “value investing” works–because of the exceptional patience required. The average institutional holding period is less than ten (10) months, but the average holdering period for true value investors is about five (5) years. How else to allow reversion to the mean or compounding to work?

  2. Yes, unlimited patience and complete lack of concern regarding extreme price fluctuations are two essential traits of a real value investor.

    One of my favorite Ben Graham quotes:

    “Investors should purchase stocks like they purchase groceries and not like they purchase perfume.”

    You should not be in love with your positions, but you should be satisfied with the assets that you own. Looking at them as actual things will facilitate being patient and having no problem with volatility.

  3. Have a library of more than 300 investment related books – this one comes into the ” read regularly ” category if reader is a relatively inexperienced investor .Well worth the price.

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