John Heins - The Art of Value Investing: How the Worlds Best Investors Beat the Market

The Final Word

Value investors have a long tradition of sharing what they've learned, which we hope to have honored by assembling the insights many of the best money managers in the business have shared with us over the years. We have gone to great lengths to make sure that their words, not ours, have taken the most prominence. Our greatest wish is that you'll find in the wisdom they've imparted insights that will make you a better investor tomorrow, a year from now, and ten years from now. To that end, it's only fitting that we close with the quote we used to lead off our Editors' Letter in the inaugural issue of Value Investor Insight , from Warren Buffett's long-time partnerand a brilliant investor in his own rightCharlie Munger:

If Warren Buffett had never learned anything new after graduating from Columbia Business School, Berkshire Hathaway would be a pale shadow of its present self. Warren would have gotten richwhat he learned from Ben Graham at Columbia was enough to make anybody rich. But he wouldn't have the kind of enterprise Berkshire is if he hadn't kept learning. I don't know anyone who [became a great investor] with great rapidity. The game is to keep learning... if you don't keep learning, other people will pass you by.

Here's wishing you a lifetime of investing pleasure and prosperity... at the front of the pack.

About the Authors

John Heins is the cofounder and President of Value Investor Media, Inc., and Editor-in-Chief of Value Investor Insight and SuperInvestor Insight . He is responsible for day-to-day operations of Value Investor Media, a media company founded in 2004 to provide investing ideas and insight to sophisticated professional and individual investors.

Previously, Mr. Heins was President and Chief Executive Officer of Gruner + Jahr USA Publishing, Bertelsmann AG's U.S. magazine subsidiary, Senior Vice President and General Manager of America Online's Personal Finance business, and a reporter and staff writer for Forbes magazine. He graduated magna cum laude from the University of Pennsylvania's Wharton School with a bachelor's degree in Economics and also holds an MBA from Stanford University's Graduate School of Business.

Whitney Tilson is the cofounder of hedge funds Kase Capital, T2 Partners and Tilson Capital Partners, the Tilson Mutual Funds, Value Investor Media, Inc., and the Value Investing Congress.

Mr. Tilson coauthored the book, More Mortgage Meltdown: 6 Ways to Profit in These Bad Times , has written for Forbes , the Financial Times , Kiplinger's , the Motley Fool , and TheStreet.com , and was one of the authors of Poor Charlie's Almanack , the definitive book on Berkshire Hathaway Vice Chairman Charlie Munger. He is a CNBC Contributor, was featured in a 2008 60 Minutes segment about the housing crisis that won an Emmy, was one of five investors included in SmartMoney's 2006 Power 30, and was named by Institutional Investor in 2007 as one of 20 Rising Stars.

Mr. Tilson was a founding member of Teach for America and the Initiative for a Competitive Inner City, and was a consultant at The Boston Consulting Group. He received an MBA with High Distinction from the Harvard Business School and graduated magna cum laude from Harvard College with a bachelor's degree in Government.

Index

A

Abingdon Capital

Abramson, Randall

Ackman, William

Activism

situations ripe for

strategy, as a

Adams, Ellen

Advisory Research, Inc.

Against the Gods

Ainslie, Lee

Akre, Chuck

Akre Capital Management

Al Frank Asset Management

Alatus Capital

Alpert, Robert

Alsin, Arne

Alsin Capital Management

Amarillo Slim

Analysis, Investment

cash flow, primacy of

general

modeling, financial

risk vs. reward

valuation

Aquamarine Fund

Ariel Investments

Ariely, Dan

Artisan Partners

Ashton, Zeke

Athey, Preston

Atlantic Investment Management

Atlas Capital

Atzil, Lee

Avenir Corp.

B

Bares, Brian

Bares Capital

Barish, Brian

Bass, Kyle

Baupost Group

Behavioral Finance

competitive spirit, of top investors

general

independent thinking

learning, importance of

humility, importance of

Berkowitz, Bruce

Berkshire Hathaway

Berler, Matthew

Bestinver Asset Management

Berstein, Peter

Beyer, Timothy

Bingaman, Chris

Bronchick, Jeffrey

Brown Brothers Harriman

Brown, Thomas

Browne, Christopher

Browne, Will

Bubis, Daniel

Buckingham, John

Buffett, Warren

Bulldog Investors

Burbank, John

Buying Discipline

Byrne, Susan

C

Cabot Research

Cambiar Investors

Cannell, Carlo

Cannell Capital

Canyon Capital

Capitalization, Market. See Circle of Competence

Cardinal Capital

Cash, use of. See Risk Management

Cash Flow. See Analysis

CastleRock Management

Cates, Staley

Catalysts. See Research

Causeway Capital

Centaur Capital

Chanos, James

Cibelli, Mario

Cinnamond, Eric

Circle of Competence

general

geographical preference

industry preference

market capitalization

Claar, Gary

Clarke, James

Clarke Bennitt LLC

Cobalt Capital

Coleman, Canon

Collins, Jim

Cooperman, Leon

Cooperman, Wayne

Concentration, Portfolio. See Portfolio Management

Cove Street Capital

Crichton, James

Crist, Steven

Curry, Boykin

Cyclicality, investing ramifications

D

Daily Racing Form

Daruma Capital Management

Davidson, Spencer

Davis, Christopher

Davis Advisors

Defiance Capital

de Lardemelle, Charles

de Vaulx, Charles

Delafield, Dennis

Delafield Fund

Denver, Cara

Deutsche Asset Management

Deshpande, Abhay

Diamond Hill Investments

Diedrich, Joerg

Dillon, Ric

Diversification, Portfolio. See Portfolio Management

Dorfman, John 72

Downside protection. See Research and See Analysis

D3 Family Funds

E

Eagle Capital

Edelheit, Aaron

Efficiency, Market

Eigen, David

Einhorn, David

Einhorn, Steven

El-Erian, Mohamed

Eminence Capital

Ende, Eric

English, Pat

Ervolini, Michael

Esplanade Capital

Eveillard, Jean-Marie

F

Fairfax Financial

Fairholme Capital

Feinberg, Kenneth

Feld, Peter

Feltzin, Brian

Feshbach, Joseph

Fiduciary Management, Inc.

Financial Analysis. See Research and See Analysis

Fir Tree Partners

First Eagle Funds

First Pacific Advisors

First Wilshire Securities

Fisher, Phil

Fitzpatrick, C.T.

Fooling Some of the People All of the Time

Force Capital Management

Fournier, Alan

Fox, Eugene

FPA Funds. See First Pacific Advisors

Frels, William

Fries, William

G

Gabelli, Mario

Gaines, Brian

Galbraith, Steve

GAMCO Investors

Garcia Parames, Francisco

Gardner, Russo & Gardner

Gayner, Thomas

General American Investors

Geographical Preference. See Circle of Competence

George, Whitney

Ghazi, Kian

Giverny Capital

Glenview Capital

GMO

Goddard, Stephen

Gold, use of. See Risk Management

Golden, Tucker

GoldenTree Asset Management

Goldstein, Phillip

Gordon, Mariko

Gotham Capital

Graham, Benjamin

Grantham, Jeremy

Greenblatt, Joel

Greenhaven Associates

Greenlight Capital

Grisanti, Christopher

Grisanti Brown & Partners

H

Harris Associates

Hartch, Timothy

Hawkins, Mason