I just finished reading the book ‘The Education of a Value Investor’ from Guy Spier after just three days. As an exception I read the German version. The author describes his personal journey of how he became not only a better value investor but also a better and happier individual at the same time.
The book is very much about his personal experiences and invaluable insights that emotions are an important factor in the field of value investing. Guy tells the story of how important it was for him to set the right environment without too many distractions. He left New York and moved to Zürich, Switzerland and implemented strategies how not to pay too much attention to daily news (or spending endless time at the bloomberg terminal). Additionally he emphasizes the importance to surround oneself with ‘better’ people and with givers instead of takers.
He makes a great deal of effort to eliminate possilbe mistakes within his investment process. He created a check list to look at before finally buying shares preventing him from individual habits and biases. Such a check list has to be created according to your (and mine) personal weaknesses.
To further mitigate investment errors and distractions he formulates eight rules which make a lot of sense to me:
- Stop checking stock prices
- If somebody wants to sell something to you, do not buy it
- Do not speak to the management
- Gather and read research material in the right order
- Only discuss your investment ideas with people who do not have a personal interest
- Never sell or buy shares when the market is open
- If a share’s price declines after you bought the share, do not sell it for two years
- Do not speak about your current investment activities
I enjoyed reading the book very much and I am truly thankful for Guy writing honestly about his personal experiences, struggles and weaknesses as well as his educational journey. The book offers great insights into a very important aspect of investing and life!
In general I prefer to read books in English. I believe the translation was not always optimal, but the content was always correct I believe.