'The Business of Value Investing': Great Resource for Beginners or Professionals

by: Mariusz Skonieczny


You can be the smartest person in the world with an education from one of the top business schools in the world, but this will not be enough to be a successful investor. The author of this book, Sham Gad, says that the stock market tends to make smart people do dumb things with their money. How true this is. Even though I am experienced in investing, I found this book to be a great resource. I usually highlight sections that I like when I read books, and there weren’t many pages where I did not have something highlighted.

The author discusses topics such as investing in stocks as if they were businesses, searching for investment opportunities, valuing companies through various methods, and avoiding common mistakes. Also, there are three case studies that show value investing in action. In 2009, one of my best investments was a company called Ternium (NYSE:TX), the most profitable steel company in the world. It was a pleasant surprise that the author included Ternium as one of the case studies. Whether you are a beginning or advanced investor, I can assure you that you will find this book resourceful.

Gad does a great job of laying the right foundation for investors to have the greatest chance of investment success. I think that this book is one of the best on the market when it comes to mental discipline. I like to think that I am pretty disciplined, but reading the author’s words on how to deal in situations when a particular stock drops significantly, or when the general market is up and you are down, was very helpful.
Many investors, especially beginners, think that they cannot be better than professionals because they are not smart enough. But they do not realize that the investment world is filled with smart people who cannot do better than average. The author says that most of these smart professionals are average because they lack discipline. If you have the discipline to say no and follow the investment strategy outlined in this book, you will likely beat most of the professionals even though you might lack experience and smarts.