Amazon.ca:Customer reviews: The Little Book of Value Investing

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From Canada

Katherine

Easy read

Reviewed in Canada 🇨🇦 on October 12, 2017

Verified Purchase

This book was recommended by a friend given that I'm very financially illiterate. It was an informative and easy read.

One person found this helpful

Helpful

From other countries

jagadeesh

value , value

Reviewed in India 🇮🇳 on September 20, 2022

Verified Purchase

changes my short term mindset to long term and a as learner I got lot ideas like how the market react with announcement like insider buying, buy back, inflation, rate hikes,etc. very nice to read

John G. Barbour

Excellent Introduction to Value Investing

Reviewed in the United States 🇺🇸 on July 11, 2013

Verified Purchase

The heart of this book are chapters 12-14. Chapter 12 is titled "Give the Company a Physical" and shows you how to examine the balance sheet. The important ratios here are:
1. The current ratio - Current assets over Current liabilities - look for a figure greater than 2
2. The quick ratio - same thing minus the inventory
3. Shareholder equity (book value)- Total assets (less intangibles) minus total liabilities
4. Debt to equity ratio - Total debt over Shareholders equity - look for numbers < 1 - the lower the number the better

Chapter 13 is titled "Physical Exam Part II" and examines the income statement.
1. Look for growing revenues ( sales)- top line
2. Gross Profit - Sales minus COGS
3. Gross profit margin - Gross profit over Revenue - look for stability
4. EPS - net profit divided by shares outstanding
5. ROC - Earnings divided by beginning of the year's capital (stockholder's equity plus debt)
6. A low P/E relative to industry and market

Chapter 14 is titled "Send Your Stocks to the Mayo Clinic". Here he gives you 16 additional questions to ask about your company. You have to get the book to see the questions.

This book gave me the idea to create a spread sheet with info that I gathered from the book. The following is the one I did on Intel.
INTEL
Shares Outstanding 4,980
Price per share 24.26
Market Capitalization $120,815
Earnings per share 2.0
TOTAL ASSETS 83083
NET WORTH ( SHAREHOLDERS EQUITY) 51,194
Intangibles 15563
Total Liabilities 31889
Book Value per Share $7.15
Price to Book value per share ratio Selling for 3 times the amount company can be sold for
Price to Earnings per share ratio Selling for 12.1 times earnings
Current Assets 28677
Total Current Liabilities 11798
Net Current Assets (Graham's number) $16,879
Net Current Assets per share $3.39
Price to net current assets per share ratio Selling for 7.2 times net current assets

Total Assets 83083
Total Debts 31889
Assets to Debt ratio 2.6

40 people found this helpful

dennis wentraub

Little Book - Lot of Credibility

Reviewed in the United States 🇺🇸 on December 5, 2006

Verified Purchase

In a perfect world markets would offer stocks at prices equaling their value, but they are not and do not. Value investors look for companies that are trading for less than their intrinsic worth. Stocks trading at low p/e ratios, low price-to-book values, or for less than their 'take out' price can be value candidates. Many of these stock prices represent temporary mis-pricings, and that is the point. Patience is a strategy that rewards the value investor as prices eventually adjust upwards to reflect their true worth.

Most investors looking for outsized gains focus on companies whose prospects are grand but also widely recognized. Growth investors and momentum investors are inclined to push prices well beyond a company's underlying value and ignore the importance of consistent, if not explosive, growth, and its appreciating assets. It is instructive that the author begins his review of a company by examining its balance sheet for what it is currently worth. By contrast growth investors will focus on a company's income statement for what it may become in the future.

Finding a "margin of safety" gives the value investor the confidence to weather the times when his style of investing is out of favor. That margin of safety is foremost in being able to buy solid companies on sale. Owning a diverse portfolio of easily understood businesses with predictable income and a pattern of insider buying or corporate stock buybacks re-enforces that margin of safety (I would also add-in companies that consistently increase their dividends). Identifying suitable value stocks means avoiding cheap stocks of companies that are over-leveraged, facing increased competition, dealing with unfunded pensions, obsolescence or accounting issues. These are the value traps that add nothing to your portfolio prospects.

Many of these ideas we have heard before. Browne's accomplishment is to present them in an accessible way. His long tenure as a career investor and money manager and his specific anecdotes got a long way in maintaining his credibility as an advocate of this investing style. Academic studies that support the value approach are noted in the final chapter and bibliography. This is a short, easily read, and informative introduction to the topic.

11 people found this helpful

Martha Hutchens

Unsure

Reviewed in the United States 🇺🇸 on March 3, 2022

Verified Purchase

Book was listed as new. When it arrived (on time) it doesn't look new. The page edges are yellowed. The binding feels as if it's been opened and read. Possibly some marks on the dust jacket. Book is in good shape. Just doesn't feel new.

Wells Velaquez Maciel

Have a notebook beside of you when read it

Reviewed in the United Kingdom 🇬🇧 on April 22, 2021

Verified Purchase

The book is good but there is not charts or even the formulas for calculations. It is just text. Like examples with the formulas you learn there, you won’t find. If you want, you can read and take notes to memorise everything

Suyash Tuppekar

Good

Reviewed in India 🇮🇳 on July 18, 2021

Verified Purchase

It's a good book. Some ideas are repeated. But overall a nice message for long term investment. Nicely explained every thing.

remoredax

Good and compact read. Perfect for beginners.

Reviewed in the United States 🇺🇸 on July 8, 2016

Verified Purchase

I enjoyed reading this book due to its succinctness, clarity and beginner friendly text. Browne does a good job explaining the ideas behind Value Investing, him being a student/follower of Warren Buffet's methods. It's a good intro book but don't expect it to just teach you everything you need to know on the topic. The book is relatively short and handheld so it's perfect for reading at a coffee break/on the bus, etc.

Just keep in mind that if you're looking for it to give you ideas on which securities to invest in and actual investment strategies/advice, you're not going to find it here. It's a basic book that explains the idea of Value Investing, and some of the basic methodologies behind it. It explains the history of it, the definition, and how to put it into practice. Any more details would have to require more advanced concepts which will not be covered.

8 people found this helpful

Gcrikey

great pimer...

Reviewed in the United Kingdom 🇬🇧 on November 24, 2011

Verified Purchase

this is an incredibly well written, concise book on value investing. it tells the reader exactly what look for - equities that are peiced cheaper than face value. why do i like this book? - it simple and clear - it doesn't expect the reader to be a financial analyst of accountant so the style is very easy. it uses great case studies, it's very short and not long winded and i will use this as a reference point going forward.

reading this book; you won't become a stock market guru overnight, however you will learn a hell of a lot and may even be swayed by value investing as a methodology going forward.

4 people found this helpful

Maanan G.

Essentail reading

Reviewed in the United Kingdom 🇬🇧 on February 24, 2017

Verified Purchase

Great book laying down the fundamentals of value investing in a simple and easy-to-digest format. Would definitely recommend to other newbies in the value investing space.

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