It's been a challenging year for
deep value investors like McElvaine Investment Management president Tim McElvaine.
CEO Jim Cotter, Sr., is a very conservative and
deep value investor like myself.
Not exact matches
His
deep -
value philosophy can be boiled down to four points: he's looking for high - quality stocks that protect against the downside; he wants businesses where short - term issues have caused
investors to abandon the company; he wants to wait until valuations are «out - of - this - world» cheap, and he tries not to pay attention to macro issues
like eurozone debt or Chinese growth.
Selloffs
like those seen recently in US equities have provided a respite from soaring share prices for
deep value investors, and they have been out in force, scouring the markets for quality stocks at bargain prices.
Camellia seems to be a favourite among
deep value or «assets at a discount»
investors and as I do
like strange companies (and conglomerates), I decided to take a
deeper look at it.
If an
investor is using
Deep Value Contrarian style (
like me sometimes), he must be able to understand it is «HIGH RISK, high return» — note the capital letters.
This is always a debate among
value investors: Is it better to look for asset based investments
like Graham / Schloss and other
deep value school, or is it better to strive for great businesses at reasonable prices that are almost certain to compound intrinsic
value over time?
You can learn more about activists
like Mr. Icahn by reading money manager Tobias Carlisle's new book
Deep Value: Why Activist
Investors and Other Contrarians Battle for Control of Losing Corporations.
(Note: Rather than picking large caps
like IBM, he was a
deep value investor, finding huge mismatches between price and
value.