Peter Cundill Quotes
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To my knowledge there are no good records that have been built by institutions run by committee. In almost all cases the great records are the product of individuals, perhaps working together, but always within a clearly defined framework. Their names are on the door and they are quite visible to the investing public. In reality outstanding records are made by dictators, hopefully benevolent, but nonetheless dictators.
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In every analysis you need to isolate what the real assets are and you must not forget to examine the franchise to do business, to review the character and competence of the management and to estimate the outcome if the whole business had to be turned into cash.
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Sooner or later, the market will do what it has to do to prove the majority wrong.
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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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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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I bought stuff at 3.5 cents once and I thought it can’t go down to zero. It can.
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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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The company must be paying dividends. Preferably the dividend will have been increasing and have been paid for some time.
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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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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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To put money into anything, anywhere, provided that the downside is measurable and acceptable and the chances of a good profit appear to be better than 50%. I will not take gambles, but it is part of my job description to be ready to take very carefully calculated risks.
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If it is cheap enough, we don't care what it is.
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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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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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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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All we try to do is buy a dollar for 40 cents.
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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.
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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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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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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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I think that intelligent forecasting (company revenues, earnings, etc.) should not seek to predict what will in fact happen in the future. Its purpose ought to be to illuminate the road, to point out obstacles and potential pitfalls and so assist management to tailor events and to bend them in a desired direction. Forecasting should be used as a device to put both problems and opportunities into perspective. It is a management tool, but it can never be a substitute for strategy, nor should it ever be used as the primary basis for portfolio investment decisions.
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Curiosity is the engine of civilisation
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The price earning multiple must be less than ten or the inverse of the long term corporate bond rate, whichever is the less.
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They really can’t afford to be contrarians. A major investment house can’t afford to do research for five customers who won’t generate a lot of commissions.
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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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One of the dangers about net-net investing is that if you buy a net-net that begins to lose money your net-net goes down and your capacity to be able to make a profit becomes less secure. So the trick is not necessarily to predict what the earnings are going to be but to have a clear conviction that the company isn't going bust and that your margin of safety will remain intact over time.
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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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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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