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Value investing seems simple at first glance - but the devil is in the detail: books on value investing have a circulation of several 100 thousand p.a. - but the number of successful value investors who beat their benchmark is probably less than 50. At FORUM we read as a team about 20 - 30 books on the topic of investing, the following books we found most worth reading.
The book analyses about 20 companies that the Hege Fund AKO Capital had or has in its portfolio. Its founder Nikolai Tangen now heads the Norwegian State Pension Fund. The company analyses give an extraordinary insight into the foundations of long-term earning power. Apparently AKO has a fund of concepts to capture and describe the quality of businesses. The reports also show an extraordinary effort to bring out the specific core of a business - making it pleasantly different from standard checklists like SWOT analyses. A must-read.
I view the book as the entrepreneurial vision of a person whose agenda in life is that anything can be improved if you take an engineer's perspective on it. Key aspects are a) Facts, facts, facts, root causes, and objectivity b) No tolerance for opinions, soft judgements or anything superficial. His credo is to get to the root cause of anything, then apply the consequences without any mercy for any humans around. c) Not allowing for any tolerance when something is not moving according to this view of the world. At the meta-level you can argue that any progress to mankind since the age of enlightenment around 1600 - aka the renaissance - has come from applying scientific principles to questions which were before viewed by opinions and no texposed to rigorous analysis. Other managers have preached similar credos a) Alfred Sloan at GM b) Warren Buffett at Berkshire c) And the new digital organizations appear to be run on these principles. Thus it fits into this sequence of evolution and other builders of organizations. What you can only sense between the lines is the absolute rigor with which Dalio has applied these principles in the organization: he moves like a robot, no emotions, no slackening - just a "social engineer with a mission". This is what I take personally out of the book: a) Many of the points made appear generic - we know them b) He reminds us that we have to apply them with absolute consequence - cutting through any resistance if needed.
In the book, the founder of the Koch Group of Companies describes his core business principles. The Koch Group is the largest privately held group of companies in the U.S., it essentially came into being with the existing generation. Like many management books, the central principles are listed in many textbooks. What is always special is the consistency with which these principles are thought through to the end and implemented. Charles Koch is a very radical thinker in this regard, his comments on leadership and accountability are particularly noteworthy. Negative: Charles Koch is so capitalistic that in some aspects he has views that are scientifically untenable, e.g. in the area of ecological sustainability. You can read about this aspect in the book "Kochland" by Christopher Leonard.
The author shows in a magnificently researched analysis how an increasing number of sectors in the US are becoming so concentrated that the remaining suppliers can use their market power to raise prices and achieve above-average returns on capital. Very good learning about the economic aspects of competition policy, but also the perspective of the companies. In the second part of the book, Philippon shows why the political system in the US makes it virtually impossible for non-millionaires to get representation in either chamber of the US - the US is increasingly becoming a plutocracy with it.
I included this book in the reading section because it really stands out among the countless guidebooks on efficient time management and working: it develops 7 principles of successful people and analyses each one with a lot of facts and depth. In doing so, the discussion is sophisticated and differentiated, it does not remain on the "how to" level of many American advice books. Probably the most important principle is "do less, then obsess" - the idea behind this is that one should focus fully on the tasks that create value - even if this means that other, more administrative tasks suffer. I found it refreshing to read such principles, the routine of admin tasks is such that you need a "mental counterbalance" - and Hansen fulfils this role brilliantly.