Jeffrey Towson - What Would Ben Graham Do Now?: A New Value Investing Playbook for a Global Age

A New Value Investing Playbook for a Global Age

Jeffrey Towson

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2011 by Jeffrey Towson

Publishing as FT Press
Upper Saddle River, New Jersey 07458

This book is sold with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, or other professional services or advice by publishing this book. Each individual situation is unique. Thus, if legal or financial advice or other expert assistance is required in a specific situation, the services of a competent professional should be sought to ensure that the situation has been evaluated carefully and appropriately. The author and the publisher disclaim any liability, loss, or risk resulting directly or indirectly from the use or application of any of the contents of this book.

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Printed in the United States of America

First Printing June 2011

ISBN-10: 0-13-217323-9

ISBN-13: 978-0-13-217323-0

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Library of Congress Cataloging-in-Publication Data:

Towson, Jeffrey Alan, 1970
What would Ben Graham do now? : a new value investing playbook for a global age / Jeffrey
Towson. 1st ed.
p. cm.
ISBN 978-0-13-217323-0 (hardback : alk. paper)
1. Investment analysis. 2. Securities. I. Title.
HG4529.T696 2011
332.6dc22
2011000081

For my parents, Wayne and Linda Towson

With more than half the worlds GDP growth coming from developing countries and regions like China, India, Brazil, and Africa by 2020, a clear approach to participating in this new global landscape is imperative. Jeffrey Towson delivers one such view. He takes a powerful old paradigmthat of fundamental value from Ben Grahamand applies it to the financial and cultural nuances of the developing world. Towsons real world experience and application of Grahams theory is a thoughtful read for any business leader.

Dominic Barton, Global Managing Director, McKinsey & Company

Throughout my career, Ive found it difficult to identify international professionals with a grasp of the intricacies of investing in the Middle East. Jeffrey successfully draws on his vast experience accumulated through working closely with HRH Prince Alwaleed bin Talal to develop an optimal investment approach, marrying the well-understood principles of international investing with the idiosyncratic aspects of emerging markets, including the requisite differentiated risk perception, eye for value, and intricate understanding of local business culture. This book is an excellent reference for any international investor looking to spot value and avoid pitfalls in emerging markets.

Tony Hchaime, Head of Middle East and North Africa, The D. E. Shaw Group

Identifying and profiting from market inefficiencies has always been at the core of value investing. Yet most investors are still trying to uncover these in overworked, developed markets. Towsons book is a wake-up call to the powerful fact that in the 21st century the real opportunities lie elsewhere: in the inefficiencies that are thrown up when developing and developed markets collide. Not only does he show investors where to look to profit from todays globalization, he provides a practical guide as to how to go about investing on the basis of this new paradigm. Rich in ideas and examples [of] how this new approach has spectacularly delivered, this book will revolutionize your investment strategy.

Peter Williamson, Professor of International Management, University of Cambridge, Judge Business School

This is more than just an offering on value investing. Without realizing it, or at least without intending to do so, the author has set before policy makers a startling analysis of the world in which America competes. If it doesnt challenge your concepts of the global competitive environment, you arent paying attention.

Congressman Mick Mulvaney, United House of Representatives

Jeff has a view of global investing that incorporates both the developed and developing economies that is virtually unmatched ... the dislocations occurring daily have the potential to create many opportunities ... his insights and investing framework will help investors better understand this changing world.

Jerry Leamon, Global Managing Partner, Services and Mergers & Acquisitions, Deloitte Touche Tohmatsu

In drawing on his unique experiences in the three critical sectors affecting the geopolitics of the new century, Towson has managed the rare feat of marrying a rigorous economic prognosis with acute cultural awareness.

David Watt, International Director, Head of Business Development and Client Services, Asia Pacific, DTZ

Dr. Towson, a brilliant young insider who worked for Prince Waleed, takes the reader on an exciting investing journey that goes beyond Grahams value investing to value point, the latter adding the critical political dynamics factor necessary for global investing.

Donald J. Palmisano, MD, JD, Former President of AMA, and author of On Leadership

Towsons book addresses one of the greatest challenges for todays investorthe world might be globalizing, but that doesnt make it easier to understand. Towson wisely shows how the differences between developed and developing countries are not barriers to investment, but instead value opportunities, whether by bringing Western management expertise to a deal, or leveraging political relationships. Neither East nor West has the right model. But finding the value in each is the way forward. Towson points the way.

Ben Simpfendorfer, author of The New Silk Road: How a Rising Arab World Is Turning Away from the West and Rediscovering China and Former Chief China Economist of RBS Global Banking & Markets

In a decade of opening distressed asset markets in Asia, Ive never met anyone quite like Jeffrey Towson, which explains why so many international investors lost money.

Jack Rodman, President, Global Distressed Solutions, LLC

If you subscribe to the theory that equity-investing exclusively in Western markets in coming years will provide lackluster returns, read Jeff Towsons thought-provoking analysis of how to create a modern framework for global investment. A value investor to the core, Jeff has modified the historic model with new concepts such as value point and capabilities migration which make value investing more effective in complex regions offering high growth potential, such as the BRIC countries and the Middle East.