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The share price must be less than book value. Preferably it will be less than net working capital less long term debt.

Peter Cundill

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Peter Cundill
Age: 72 †
Born: 1938
Born: October 1
Died: 2011
Died: January 24
Businessperson
Less
Capital
Book
Price
Must
Debt
Long
Value
Share
Term
Working
Values
Preferably

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You find bargains among the unpopular things, the things that everybody hates. The key is that you must have patience.
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Protect the downside. Worry about the margin of safety.
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Curiosity is the engine of civilisation
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If it is cheap enough, we don't care what it is.
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I suspect that my thinking is an eclectic mix, not pure net-net because I couldn’t do it anyway so you have to have a new something to hang your hat on. But the framework stays the same.
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There will be losing years but if the art of making money is not to lose it, then there should not be substantial losses.
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We always look at the margin of safety in the balance sheet and then worry about the business.
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The company must be paying dividends. Preferably the dividend will have been increasing and have been paid for some time.
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We do liquidation analysis and liquidation analysis only.
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Long term debt and bank debt (including off-balance sheet financing must be judiciously employed. There must be room to expand the debt position if required.
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There is almost always a major blip for whatever reason and we have learnt to expect it and not to panic.
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When a stock doubles, sell half - then what you have is a free position. Then it becomes more of an art form. When you sell depends on individual circumstances.
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What differentiates us from other money managers with a similar style is that we’re comfortable with new lows.
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The difference between the price we pay for a stock and its liquidation value gives us a margin of safety. This kind of investing is one of the most effective ways of achieving good long term results.
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I’m lucky to have the kind of life where the differentiation between work and play is absolutely zilch. I have no idea whether I’m working or whether I’m playing.
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There is always something to do. You just need to look harder, be creative and a little flexible.
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Just as many smart people fail in the investment business as stupid ones. Intellectually active people are particularly attracted to elegant concepts, which can have the effect of distracting them from the simpler, more fundamental truths.
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I try to keep in mind Oscar Wilde's comment that saints always have a past and sinners always have a future, so no investment should be ruled out simply on the basis of past history. We focus on liquidation analysis and liquidation analysis alone.
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The most important attribute for success in value investing is patience, patience, and more patience. The majority of investors do not possess this characteristic.
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Why will someone sell you a dollar for 50 cents? Because in the short run, people are irrational on both the optimistic and pessimistic side.
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