Charles Brandes Quotes
102 Charles Brandes Quotes
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When the principles of value investing are applied, perhaps the most fortuitous time for value investors is when pessimism has been rampant…
Charles Brandes
[On needing to pay attention to the rate of change in fundamentals in businesses, especially in the technology area] Things are changing more rapidly now than they did in the past. Take the film industry – Kodak, Fuji, and along came digital [photography]. We were always looking at that but thought film was better than digital. Digital would become good enough to stand side by side with film, but film would be around for quite some time. That analysis was wrong and it hurt Kodak, which was a blue chip, nifty-fifty company for many years. That company now is really, really, struggling. It is speculative right now. Because of rapid changes in technology, this is what happened to a really wonderful industry.
Charles Brandes
[On ‘Security Analysis’ by Benjamin Graham] That is the bible of value investing.
Charles Brandes
[On an original 1934 edition of Security Analysis priced at $40-50,000 dollars] It’s kind of hard to determine what the intrinsic value of a book is. We think that the intrinsic value is quite high but not as high as it was priced at the time. [Later offered for $10,000 and they still rejected it. Eventually they bought it for $4,500.00. After the dotcom bubble burst the price the asking prices for the book went back up to $30,000]
Charles Brandes
[During the dotcom bubble] We were told Value Investing then was finished. Absolutely done. We would have clients tell us during that period of time that if you have no technology stocks and no internet stocks… How could you possibly be an investment management firm? Cause we didn’t.
Charles Brandes
[On the internet dotcom bubble] It was the craziest thing that I’d seen in my investment experience.
Charles Brandes
The basic fundamental thing about investing and especially value investors is number one: It’s a very obvious very simple thing to do. There’s nothing terribly complicated about being a value investor number one. Number two in actual practice it becomes extremely difficult, of course if it was all that easy, everybody would be doing it and there wouldn’t be value stocks out there anymore.
Charles Brandes
In 1968 when I finished Graduate school I did become a stock broker. Because I didn’t want to live in the cold climates anymore. And I couldn’t find any good finance areas of the world where you could have nice balmy warm weather all year long. So I decided I can’t become an analyst I can’t work for a bank an investment banker and I would be working in a place where it’s a little chilly for me like Toronto, New York or London. And well I decided to become a stock broker and in 1968 I did. [And in the bear market of 1970 he had a gentleman walk into his office, wanting to open a stock broking account. His name was Benjamin Graham.]
Charles Brandes
[On his thinking after meeting Benjamin Graham with him buying National Presto Can which was a ‘net-net situation’ especially after the boom and bust experience he had just getting into the industry] Maybe I should go back and read Ben Graham… This makes a lot of sense.
Charles Brandes
[On the Intelligent Investor and Security Analysis] It is conservative, it is fundamental. And not speculative. And low and behold because your not doing what everybody else is doing in Bay Street, in Wall Street, you have a very good chance for success.
Charles Brandes
[On the nifty-fifty’s in 1972] That was the thought.. that these companies were so strong that they would grow forever. Of course as experience shows. No company no matter how good they are, always grow forever or are around forever.
Charles Brandes
[On investors paying 30 and 40 times earnings for shares] This is going to come to a bad ending, because this doesn’t make any sense. And it did.
Charles Brandes
[In 1974] Avon Products was a nifty-fifty stock. It went from 105 to 4 dollars a share.
Charles Brandes
[Like Avon crashing from 105 to 4 dollars from Euphoria to Pessimism] This type of story like this as far as stock markets go continues to repeat itself. Over and over again. And when anybody tells you it’s different this time, you cannot believe them as a true Graham and Dodder, you know there is nothing different about what happens in the public stock markets. Just the names change, the margin of circumstances change, but it doesn’t change that rapidly from a standpoint of what good investing is compared with what speculation is. I’ve seen this continue to repeat itself over and over again in my career.
Charles Brandes
The market is crazy, most of the time. You should only think about the fundamentals of the investment that you are actually making and whether that makes sense over a long period of time.
Charles Brandes
Most people get involved in thinking and getting confused about the difference between investment and speculation.
Charles Brandes
[On wanting to know what the stock market will do next quarter] Anytime you are talking about that type of thing you are not an investor. You are actually a speculator trying to forecast unforecastable events in the future. And you are trying to think in much too short a period of time as an investor.
Charles Brandes
[In 2006] The price of oil on [over] a short period of time is unforecastable.
Charles Brandes
The only thing we can do as analysts is take a look at the long-term basic history of the fluctuations as an example in the oil and gas prices, and normalize those fluctuations and try to come up with what we call a normalized price on that. We know we may be wrong. You have to understand that you are going to be wrong when you make a lot of these estimates or guesstimates. And that’s the reason why as value investors you’ve got to be conservative…
Charles Brandes
The bottom line of value investing… is to make money.
Charles Brandes
It is so important to understand whether you are really an investor or whether you are a closet speculator.
Charles Brandes
Be wary of adopting others’ optimistic views on particular companies even if those others are professional analysts.
Charles Brandes
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