Brandes Institute Summit Emphasizes Current Appeal of Value Investing

Brandes Institute Summit Emphasizes Current Appeal of Value Investing


The Brandes Institute earlier this month hosted a number of today’s top value investing practitioners in New York City for a series of events including a lively discussion on the benefits of value investing and the characteristics of solid value-based opportunities today.

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NEW YORK CITY, April 27, 2016 – The Brandes Institute earlier this month hosted a number of today’s top value investing practitioners in New York City for a series of events including a lively discussion on the benefits of value investing and the characteristics of solid value-based opportunities today. The conference, attended by nearly 100 institutional investors, consultants and private clients, featured Brandes Investment Partners founder and Chairman Charles Brandes, Tweedy Browne Company Managing Director John D. Spears and van Biema Value Partners founder Michael van Biema.

The roundtable on value investing was the main event of the summit and underscored the history of value investing and opportunities in today’s market. Key takeaways from the conversation:

  • The continued focus on so-called higher-quality growth stocks has resulted in some global value stocks currently selling at a very deep discount, as van Biema explained. For investors who believe that long-term returns are driven by low valuations, this suggests that value stocks are exceptionally attractive. “It’s encouraging to know that value is selling at a deep discount,” he said.  
  • Participants agreed that markets generally are not more efficient today vs. a decade or so ago; in fact, inefficiencies continue to create opportunities for value investors around the world.
  • Charles Brandes explained, “Value investing today is not going to be any different than it has been for the last 75 years. It has been proven over and over again that in taking advantage of short-term thinking and behavioral aspects, value has worked very well.”
  • Spears suggested investors think of a stock’s intrinsic value as collateral against which a bank might lend money. He shared an example of a stock that’s worth $100, but purchased at $70. “If it drops to $50 but the business hasn’t changed, it’s not more risky. At $70 your ‘coverage’ of intrinsic value to price is about 1.5 to 1. At $50, it’s 2 to 1. From this perspective, it actually gets safer as the price goes down.”

“We are thrilled with the level of engagement and collaborative thinking that took place at this year’s Brandes Institute Summit,” said Bob Schmidt, manager at the Brandes Institute. “The ability to foster discussions among the value community enables genuinely unique ideas to surface and serves as a tremendous learning experience for everyone who participated.”

For more information on the Brandes Institute, visit https://www.brandes.com/institute.

The views expressed by guest speakers do not necessarily reflect the opinions of Brandes Investment Partners or the Brandes Institute.

The Brandes Institute is associated with Brandes Investment Partners, L.P., and seeks to develop ideas and research to expand the investment community’s understanding of market behavior and portfolio management.

About Brandes Investment Partners, L.P.

Brandes is a leading investment advisory firm, managing global equity and fixed-income assets for clients worldwide. Since the firm’s inception in 1974, Brandes has consistently applied the value investing approach, pioneered by Benjamin Graham, to security selection and was among the first investment firms to invest globally using a value approach. The independently owned firm manages a variety of active investment strategies and applies its investment philosophy consistently in all market conditions. Headquartered in San Diego, Brandes and its related entities have offices in Milwaukee, Toronto, Dublin and Singapore.