James Montier, GMO. James is a member of GMO’s Asset Allocation team. Prior to joining GMO in , he was co-head of Global Strategy at Société Générale. James Montier’s book Value Investing is essential reading for value investors. With markets falling due to fears over China’s economy – the. “”As with his weekly column, James Montier’s Value Investing is a must read for all students of the financial markets. In short order, Montier shreds the ‘efficient.

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It is exclamatory inflation at its most egregious! Value investing often involves going against the crowd, and hence involves social pain.

8 investing tips from James Montier

The second section is on behavioral economics. Books by James Montier. The influence of luck in investing — particularly over the short term — means that investors can never be certain a particular investment will be profitable. He cites the often inverse correlations between analyst forecasts and actual results, as evidence against this practice. Top Reviews Most recent Top Reviews.

Shopbop Designer Fashion Brands. To ask other readers questions about Value Investingplease sign up. The Art of Value Investing: I think he’s trying to distinguish some sorts of forecasts from others, but he doesn’t make this clear, investinv certainly doesn’t offer any convincing argument for this view. Also, Montier has a middle school girl’s infatuation for the exclamation point! Be contrarian Tenet III: Would you like to change to the site?

Widely regarded as a “perma-bear” by most market observers, Montier makes the case for being bullish last year despite widespread concerns of deflation driven by leverage and credit contraction. Over time and as the number of investment decisions made increases, the influence moontier luck on your performance declines and the influence of skill takes over. If you’d like to join this conversation, please login or sign up here.

Ore-commitments to sell after a profit warning and buy 1 year later might serve us well.

Value Investing: Tools and Techniques for Intelligent Investment by James Montier

Value investors seem to do poorly relative to the m market for long periods of tie and make their strong relative performance in short periods hard for most to tolerate this. Montier also, like Thaler and others before him, points out how we are all victims of our own biases and of the decision traps our brain architecture montjer wants to throw us into.


Ed Yau rated it it was amazing Jun 02, Be unconstrained Invessting V: Learn more about Amazon Giveaway.

Jun 17, Rob Kol rated it it was amazing. So it’s not surprising that the successful value investors Montier surveyed had an average holding period of five years. There were hundreds of similar quotes from Templeton to Buffet to Newton who failed as an investor incidentally. Evidence shows that stocks which have a profit warning continue to do poorly for around a year. Amazon Giveaway allows you to montoer promotional giveaways in order to create buzz, reward your audience, and attract new followers kontier customers.

In short order, Montier shreds the ‘efficient market hypothesis’, elucidates the pertinence of behavioral finance, and explains the crucial difference between investment process and investment outcomes.

If anything, it makes you want to go passive. Montier cites a study by Jeremy Grantham a great investor and colleague of his at GMO demonstrating that low beta stocks have outperformed high beta for decades, exactly counter to the premise of CAPM. In brief, he explores the idea that a value investor, when unable to find much that’s cheap enough to buy, might want to sell short the most expensive stocks.

James is a regular speaker at both academic and practitioner conferences, and is regarded as the leading authority on applying behavioural finance to investment.

Unfortunately this book was not as interesting as his later book Bull’s Eye Investing which provides a topical look at the current high level of the stock market and what strategies could work in the coming years – a more difficult topic in my opinion but A reasonable defense of value investing in general terms but disappointingly shallow, highly repetitive and weak on individual stock selection perhaps because the author does not himself invest in individual stocks “given time constraints”.

A common distraction Montier strongly opposes is the capital asset pricing model CAPMwhich he calls “insidious”. Or, Am I Clinically Depressed? Want access to our latest research and new buy ideas? Montier also, like Thaler and others before him, points out how we are all victims of our own biases and of the decision traps our brain architecture always wants to throw us into.


That way I have firepower left over to buy at lower prices and, if the stock rises instead, I get the best of both worlds. Be sceptical Tenet IX: Harry Hart rated it really liked it Aug 20, Guy Feld rated it liked it Jun 06, All too often too narrow a perspective is taken when thinking about diversification. He has been described as a maverick, an iconoclast, an enfant terrible by the press. You’ll sometimes find the same sentence, or even an entire paragraph repeated verbatim three, four, or even more times.

Montier, I think successfully, debunks a number of popular investment theories that drive so many investment decisions: The Valuation Debate References Index Those figures can then be compared to base rates historical experience for similar businesses in similar industries.

From my point of view the key negative with this book, is that it consists mostly of a collection of the regular research pieces Montier previously wrote when working at Societe General and Dresdner Kleinwort, of which I had read most before. It’s easy to think about how much money you can make but you also need to consider how much you can lose and the respective probabilities of each the ‘expected value’, in mathematical jargon.

The seductive elegance of classical finance theory is powerful, yet value investing requires that we reject both the precepts investlng modern portfolio theory MPT and pretty much all of its tools and techniques.

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Well written-‘s book reminds us all to remain objective and con Montier’s work uses empirical evidence to support value investing principles.

It combines great academicand practitioner approaches written in a humorous and entertainingstyle.