We are delighted to bring you this conversation from the MOI Global archives.

We had the pleasure of sitting down with David Steinberg, managing partner of DLS Capital Management, in Chicago in 2014, for an exclusive interview on his deep value-oriented investment approach.

Watch an excerpt of the full video:

The following transcript has been edited for space and clarity.

MOI Gobal: Tell us about how you got started in the business and what piqued your interest in value investing.

I look at deep value, I’m looking at the value of the whole enterprise. In other words, the investment may come in the form of a bond or a bankrupt company or it might come in the sense of a deeply discounted equity.

David Steinberg: I got into the business in 1981 as a retail broker. I started at Merrill, but shortly thereafter went to Morgan Stanley where I spent the majority of my career and ended my career there in the Special Situations Group in New York. What I found in dealing with really high net worth and wealthy and sophisticated institutions is you really needed a base of knowledge and a factual foundation behind what was going to drive your investments. By learning more and more about the economics of asset valuation and cash flows, I was able to always build a really strong case as to the logic and rationale about how we were going to make money or how this particular investment was making money.

The more I did so, the larger a business you could grow and the more confidence you could have with the investors you were dealing with, as well as your returns actually did well. The knowledge you built about factual asset values and cash flows and intrinsic value gave you a terrific foundation for having the courage to make investment suggestions and build your portfolios. That’s the test of time.

MOI: Deep value investing means different things to different people…

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