Video Transcript: Compelling evidence for value investing
Hello, I’m Bill Nasgovitz, Founder and Portfolio Manager at Heartland Advisors.
Boy, these are interesting, but challenging times for investors. We’ve got the European debt crisis, British Petroleum oil in the Gulf, high unemployment. I could go on and on. There’s plenty of negativity out there and lots of uncertainty. What to do?
In my view, it’s time for common sense investing; time for value investing. Focusing on buying stocks at what we believe to be bargain prices. When shopping, you generally look for a good deal. Perhaps a price reduction without sacrificing quality.
At Heartland, that’s what we do day after day – scouring the marketplace looking for companies we feel are selling at low prices in relation to their earnings, cash flows and assets. In essence, our goal is to buy a sound business at a fraction, a fraction of it’s true worth. We are trying to take advantage of today’s uncertainty and volatility.
Pretty easy to understand, yet difficult to practice because emotions come into play. It is difficult to be a value investor, a bit contrarian and buy when most others are negative. That’s where we come in. We try to stay focused and disciplined. Does it work? Studies have said “yes.” I would like to share with you one such study.
Take a look at the chart. Going back thirty years –value has trumped growth across the board. Whether it be a small, large or all-cap stock – this seems to be compelling evidence for value. Or course, there is no guarantee on future returns, but our strong belief is that value investing is the most intelligent way to build your net worth.
Source: Furey Research Partners, Custom Research & Analysis