Intangibles of Value Investing
Bill Nygren of Harris Associates, on how tangible book value may no longer be a good indicator of a company’s potential value.
- Contrary to many investment managers, Harris Associates believes that value and growth investing are not really opposite approaches.
- Company balance sheets are not what they used to be: the tie between book value and potential economic value has been broken.
- Many investors still follow fads, get emotional, and overact – Harris Associates believes the tenets of value investing have not changed.
Value investing carries the risk that a security can continue to be undervalued by the market for long periods of time.