Bruce C. Greenwald & Judd Kahn 
Value Investing 
From Graham to Buffett and Beyond

Explore the modern extension of value investing in this essential text from ‘the guru to Wall Street’s gurus’

The substantially rewritten Second Edition of Value Investing: From Graham to Buffett and Beyond delivers an incisive and refined approach to investing grounded on almost 100 years of history, beginning with Graham and Dodd. Founded on the value investing course taught for almost twenty-five years by co-author Bruce Greenwald at Columbia Business School, the book helps investors consistently land on the profitable side of the trade.

Readers will learn how to search for underpriced securities, value them accurately, hone a research strategy, and apply it all in the context of a risk management practice that mitigates the chance of a permanent loss of capital.

The new edition includes:

* Two innovative new chapters discussing the valuation of growth stocks, a perennial problem for investors in the Graham and Dodd tradition

* New profiles of successful investors, including Tom Russo, Paul Hilal, and Andrew Weiss

* An extended discussion of risk management, including modern best practices in an environment where it is often divorced from individual security selection

A substantive expansion of an already highly regarded book, Value Investing: From Graham to Buffett and Beyond is the premier text discussing the application of timeless investing principles within a transformed economic environment. It is an essential resource for portfolio managers, retail and institutional investors, and anyone else with a professional or personal interest in securities valuation and investing.

Successful value investing practitioners have graced both the course and this book with presentations describing what they really do when they are at work. Find brief descriptions of their practices within, and video presentations available on the web site that accompanies this volume:

http://www.wiley.com/go/greenwald/valueinvesting2e

Table of Content

Dedication v

Acknowledgments ix

Preface xi

Introduction xi

1 Value Investing: Definitions, Distinctions, Results, Risks, Principles 1

2 Searching for Value: Finding the Right Side of the Trade 17

3 Valuation in Principle, Valuation in Practice 41

4 Valuing the Assets: From Book Value to Replacement Costs 71

Example One: Hudson General 91

5 Earnings Power Value 103

Example Two: Magna International 123

6 Growth 141

7 ‘Good’ Businesses 161

8 The Valuation of Franchise Stocks 187

Appendix to Chapter 8: Return Calculations for Franchise Businesses 217

Example Three: WD-40 231

Example Four: Intel 253

9 Research Strategy 301

10 Risk Management and Building Portfolios 321

Investor Profiles 339

Warren Buffett 343

Robert H. Heilbrunn 375

Walter and Edwin Schloss 381

Mario Gabelli 393

Glenn Greenberg 395

Paul Hilal 399

Jan Hummel 403

Seth Klarman 407

Michael Price 411

Thomas Russo 415

Andrew Weiss 419

Index 423

About the author

BRUCE C. GREENWALD was Founding Director of the Heilbrunn Center for Graham and Dodd Investing at Columbia Business School from 2001 until his retirement in 2019. In addition to training thousands of students in the mysteries of value investing, he taught oversubscribed courses on the economics of business strategy and globalization. His book Competition Demystified, published in 2005, is still in print. He has also been Chairman of Paradigm Capital Management since its founding in 2007 and the Director of Research at First Eagle Funds from 2007-11, serving as a senior advisor since.

JUDD KAHN is currently a partner in Davidson Kahn Capital Management. He started his professional career as a historian, worked as a consultant and financial executive, and has been involved in investment management since 2000. He has a doctorate in history from UC Berkeley.