- Bargains can be found through book value, special situations, 52 week lows, merger arbitrages, bankruptcies, etc.
- It’s necessary to be a contrarian to be a value investor, though it might be painful for a while.
- With experience, it will take less and less time to assess a stock and whether it has the potential to be a good investment.
Last week we discussed Klarman’s view on the best business valuation methods. You can find the article here. Today we’ll discuss his approach to investment research.
Studying fairly priced securities won’t get you far because you’re competing with thousands of others who have researched those companies and, especially in the current market environment, if there is anything worth owning, it will probably be expensive. Therefore, to find bargain investments, an investor has to look where others aren’t looking or refuse to look. More →