Customer Review

4 of 4 people found the following review helpful
4.0 out of 5 stars An absorbing hands-on demonstration, 5 Jan. 2014
This review is from: Deep Value Investing: Finding bargain shares with big potential (Paperback)
Books on investing are often laden with theory and light on application. Many readers, on the other hand, want to roll their shirt-sleeves up and be taken into the workshop. What is unmistakable from the opening pages of Jeroen Bos' "Deep Value Investing" is that this is no theoretical text. If what is sought is an opportunity to peer over the shoulder of an experienced deep value investor and watch him at work then this book is ideal.

Fifteen of the seventeen chapters in Deep Value Investing are given over to specific case studies. Mr. Bos takes us through his investment analysis, step-by-step, providing the detail (including extended extracts from company announcements) that was available to him at the time of his investment decision. The author does not merely walk us through past successes. He also explores a couple of failures, and leaves the final six chapters for the discussion of current holdings (two of which are currently trading at prices close to those at which Mr. Bos made his initial purchases).

Deep value investing is difficult for many to practice. It involves holding unknown or highly unpopular securities: "names" to which clients may have a visceral negative reaction should they spy them on a list of holdings. Money managers generally do not lose their jobs for dropping performance on the IBMs of this world. But holding a deep value opportunity that does not work may be far less easily forgiven. There are, in short, some pretty good reasons why these sorts of stocks should be favourable investments for those who are able to act dispassionately (i.e. for investors to whom any dollar of loss and any dollar of gain are equally weighted and netted off against each other).

For value investors the overriding concern in relation to this style of investing is generally not one of basic validity but rather one of opportunity. It is commonly assumed that Benjamin Graham's "net-nets" were, and are, available in decent quantity only during periods of distress (such as the great depression or the end of the "dot-com" bubble). They are believed to be so thin on the ground at other times as to make a deep value approach at best a minor supplement to a broader armoury.

In Deep Value Investing Jeroen Bos does much to cast doubt on this common assumption. Few of the case studies relate to stocks bought during the market dislocation immediately following the collapse of Lehman Brothers. That said, Mr. Bos himself speaks in the closing paragraphs of the need to "head into cash and short-term high-quality bonds (gilts) as the markets become more confident". With markets currently (at the time of writing) hitting new highs on a regular basis we may be entering such a period. If so, the resolve of all but the most disciplined will likely be tested.

Deep Value Investing does not, of course, answer every question. Mr. Bos spends his time valuing companies and making investment decisions. He has, in consequence, written an accessible and absorbing book for investors. Those looking for empirical or academic support for deep value investing will have to look elsewhere. Those seeking a detailed discussion of the theory underlying Mr. Bos's art will also not find it here.

The style of the text matches the content. It is businesslike. That said, a thorough review by a keen-eyed style editor could have saved typing errors and style lapses which leave the expression a little rougher than it might be in places.

For those with the discipline, and the freedom, to apply a deep value approach Jeroen Bos' "Deep Value Investing" should prove an absorbing point of reference. It also offers anecdotal support for the continuing validity of this venerable approach to intelligent investment. Art cannot, by its nature, be reduced to strict formulae. Watching an experienced practitioner at work is one of the best means by which a feeling for the art of investment can be developed.
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