📚《Value Investing》— Bruce Greenwald's detailed introduction

Hello everyone! Today, I'd like to share a classic book, "Value Investing: From Graham to Buffett and Beyond," hailed as the "academic bible of value investing ." The author is Bruce Greenwald , a professor at Columbia Business School and revered in the investment community as the "godfather of the value investing school."

This book not only summarizes the thought process behind value investing over the past century, but also systematically proposes how to apply it to modern financial markets. For those who want to deeply understand the essence of value investing, this book is an absolute must-read.

🌟 Author background: Who is Bruce Greenwald?

• Academic status : Professor at Columbia Business School, specializing in finance and corporate strategy, and has long taught the "Value Investing" course.
• Investment Enlightenment : Columbia University is the birthplace of value investing. Benjamin Graham taught there and later influenced Warren Buffett. Greenwald continues and furthers this tradition.
• Contributions to his writings : In addition to "Value Investing," he also wrote "Competition Demystified," which provides an in-depth discussion of industry competitive advantages.
• A bridge between academia and industry : He is both a scholar and a collaborator with investment funds, combining theory with practice, and is highly respected by students and professional investors.

📖 The meaning of the title: What is "Value Investing"?

The core spirit of "Value Investing" is:
👉Buy assets at a price below their intrinsic value and hold them for the long term, waiting for the market to return to rationality.

The uniqueness of this book lies in that it not only repeats the concepts of Graham and Buffett, but also further breaks down value investing into an actionable framework, making it easier for readers to apply it to different types of investment objects.

🔑 The core ideas of the book (edited by the editor)

1. Estimation of intrinsic value 🏷️

Greenwald believes that estimating corporate value cannot rely on a single method, but requires multiple perspectives:

• Asset value : The liquidation value of the company's assets is used as the bottom line.
• Earnings value : evaluated based on the company's future stable profitability.
• Growth value : If a company has a long-term competitive advantage, consider its future growth.

This three-level valuation logic helps investors avoid over-reliance on "growth stories."

2. Margin of safety

He continues the core philosophy of Graham and Buffett:

• Buy companies whose value is significantly higher than the market price.
• Protect the principal and ensure that the investment is not fatal due to market misjudgment.

3. Competitive Advantage and Moat 🏰

Greenwald particularly emphasizes the company's "moat":

• Economies of scale : Large companies reduce costs due to their size.
• Network effect : The more users there are, the greater the value (e.g., technology platforms).
• Customer stickiness : Products or services have low substitutability.
• Patents and brands : provide legal or psychological protection.

This part echoes his other book, Competition Demystified.

4. Investment categories and strategies📊

He divides investment opportunities into different types and proposes corresponding methods:

• Asset-based companies : Suitable for measurement by liquidation value or replacement cost.
• Profitable companies : look at their stable earnings and cash flow.
• Growth companies : Be careful, investing is only worthwhile when growth is sustainable.

5. The impact of behavioral finance

Greenwald pointed out that market investors often lose their rationality due to emotions and biases, which is why value investors can make money.

• Buy when you're afraid
• Be cautious when greedy

This coincides with Buffett's famous saying.

💡 Editor's opinion: The value of this book

• Academic systematization : Compared with Buffett's shareholder letters or Graham's classic works, Greenwald's version has a more "textbook feel" and is suitable for those who want to learn about value investing in a comprehensive way.
• Practical Application : The book provides specific cases, allowing readers to transition from "theory to practice".
• Modern extension : It not only discusses traditional enterprises, but also discusses technology and emerging industries, so that value investing will not be misunderstood as "only buying cheap old companies."

🌍 What the investment community thinks of this book

• Many Columbia Business School students consider it a "must-have textbook for value investing classes."
• Wall Street professionals believe that it is a representative work that modernizes value investing.
• The editor feels that it is like a "textbook on value investing". It is easier to get started than "The Intelligent Investor" and more structured than Buffett's letters.

📌 Editor's Summary

The core value of the book "Value Investing" lies in:
👉 Disassemble and systematize the classic concept of value investing.
👉 Emphasize intrinsic value assessment and safety margin .
👉 Suitable for readers who want to learn comprehensively from theory to practice.

My feeling after reading this book is that it is like a set of "martial arts secrets of value investing". It not only teaches you swordsmanship (valuation methods), but also teaches you the mindset (investment mentality), so that you can be invincible in the market⚔️.