I’ve always believed that success in investing is the long-term result of applying consistent principles to choosing companies. These principles include using fundamental analysis to find high quality stocks selling for bargain prices below their intrinsic value.
This is the process known as value investing. In this age where most investors are content with simply indexing and following the crowd, I believe that disciplined investors that are willing to do more research can outperform significantly over the long run.
I’ve spent the past decade or so as an equity options trader. Therefore, I know that maintaining an edge in trading is key to being profitable.
If trading could be considered a series of bets, I knew that if I had a mathematical edge according to my model, then the more bets I placed, the better the chances I’d come out ahead.
I believe the same principle can be applied to investing for the long term. If one applies the principles of value investing, buying companies at a discount to their intrinsic value, then one can maintain a significant edge and come out ahead in the long run.
Financial markets are for the most part efficient, but there are times when markets can get distorted and irrational. It’s precisely these times when an astute investor can find high quality companies selling for attractive prices.
My growth as a value investor has resulted from many hours of perusing and soaking up the knowledge from Warren Buffet’s letters to shareholders of Berkshire Hathaway and the wisdom of his partner, Charlie Munger.
I’ve also followed and learned from superinvestors I admire such as Mohnish Pabrai and Seth Klarman, both of which shaped my
investment philosophy. After listening to them, it was hard to fathom how investors could make decisions in any other way. It just made sense.
Something clicked in me and from then on, I knew I’d be pursuing this path. It was as exciting as searching for buried treasure. I hope you can join me.
Robert T. Nowak, CFA
Learn More about RTN Investments
- Micron Technology (MU)(16.67%)
- Canfor Corp (CFPZF)(16.67%)
- Thor Industries (THO)(16.67%)
- Advanced Energy Ind. (AEIS)(16.66%)
- Louisiana Pacific Corp. (LPX)(16.66%)
- United Therapeutics (UTHR)(16.66%)
- Current holdings as of January 3, 2019