"Value investing is easy it is sick. Everyday, I read to expand my circle of competence. That's all."
"When I read , I know. When I study, I remember. When I do, I understand. When I went to Buffett's meetings, I self-actualized."
"My risk management control is to reject investment ideas."
-- Mike Onghai
I still think the management fee of a hedge fund should not be a profit center. I know a lot of funds that have billions of dollars under management and they won't put it to work so they don't risk any money and they just live off the management fees.
posted by Mike Onghai, CFA @ 7:34 AM
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My investing philosophy is an amalgamation of my five great inspirations and direct teachers: Graham&Dodd, Buffett and Munger's Latticework of Mental Models, Phil Fisher, and of course, my two direct teachers, Marty Whitman, and Joel Greenblatt. Numerous studies (See Fama-French, Lakonishok, Piotroski) have been made confirming that a value strategy beats a growth strategy in U.S. and international markets. I look for investment ideas that fall into 4 baskets: excellent businesses( high returns on capital, that can deploy retained earnings and yield higher than the cost of capital) at fair prices, stocks selling for below liquidation values (the cigar butts), stocks selling for below net ascertainable values (Marty Whitman), and special situations (Joel Greenblatt -- spinoffs, post-bankruptcies, and liquidations). I have a degree in Computer Science and Engineering and I am a member of the ValueInvestorsClub.com . I help run a fund using these principles here in the U.S. Beginning in 2006, I will also run a fund with a satellite office in Asia. The focus will be investing in companies that will enjoy benefits of the growth opportunities in Asia.
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