A Review of Ben Graham’s Value Investing Strategy: “Net Nets”

Gaurang Merani of Global Investing Insight presented his research findings into the practical replicability of Ben Graham’s famous “net-net” value investing strategy at Asian Investing Summit 2022.

Presentation summary:

Benjamin Graham developed an investment strategy that involved purchasing securities for less than their “current-asset value”, “a rough index of the liquidating value”.

Gaurang uncovered ten research papers that examined the returns achieved by investing in such securities which were conducted over a number of decades and across various geographies. In general, the research found that the strategy generated a remarkable level of outperformance.

Gaurang’s objective was to answer the question, “Could the returns reported in the research have been achieved by an investor in practice?” To meet this objective, Gaurang developed a methodology to analyze the evidence and determine its reliability.

Gaurang found that each of the studies suffered, or may have potentially suffered, from a number of biases which adversely impacted the reliability of the results contained therein. He therefore concluded that, in essence, a practitioner could not have achieved the returns reported in the research.

Lastly, Gaurang touched on the implications of his findings for practitioners of the investment strategy, as well as for evidence-based investors at large.

The full session is available exclusively to members of MOI Global.

Members, log in below to access the full session.

Not a member?

Thank you for your interest.  Please note that MOI Global is closed to new members at this time. If you would like to join the waiting list, complete the following form:

First name:

Last name:

Email address:

City / state / country:

Company:

How did you hear about MOI Global? Select Member referral Staff This website Media / Internet Other

If referral, please provide member's name:

Which of the following applies most closely to you? Select Investment Firm - Head Investment Firm - Analyst or PM Institutional Allocator - Firm C-Level Executive Institutional Allocator - Firm Employee Family Office - Head or Co-Owner Family Office - Employee Non-Investment Firm - C-Level Executive Non-Investment Firm - Employee Other

How do you hope to add value to the community?

Leave this field empty if you're human:

About the instructor:

After nearly 15 years in corporate finance, forensic accounting and financial risk management Gaurang focused his attention on global equity research and portfolio management. He expended many thousands of hours over a number of years researching finance, investing and human behaviour. The result of his research effort, which is continually ongoing, was the development and implementation of two systematic investment strategies: “Quantitative Deep Value” and “Quantitative Value with Momentum”. He uses the aforementioned strategies to manage the capital of High Net Worth Individuals (HNWIs), friends, family and himself. Interestingly, one of his European based HNWIs has a history of identifying asset managers at the commencement of their careers who have subsequently gone on to produce enviable track records.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.