Choosing the Best Role Models is the Most Important Thing You Can Do
Especially when it comes to investing
By now, you know how we feel about the phrase “value investing.” It is a term that somehow garnered a life of its own even though Ben Graham has not used it in his most famous book, Warren Buffett said it is redundant, and Charlie Munger basically said ALL investing is value investing. Aren’t they supposed to be the best role models in America when it comes to investing?
If you are going to learn how to properly shoot a free kick, who would be one of the best role models? Perhaps this guy? (clickable)
Why, then, are we not following the guidance of the investing legends?
Remember, Ben Graham and David Dodd both taught at Columbia, which now has the Heilbrunn Center for Graham & Dodd Investing. It makes perfect sense for the Columbia Business School to have a dedicated center for investing.
Having a dedicated center for investing is fantastic, however, we believe their homepage is doing a disservice to their prospective students:
Columbia Business School's Heilbrunn Center is a dynamic resource for students and practitioners to learn about Value Investing through world-class education and research, bridging theory and practice.
Isn’t that interesting? The center is literally Ben Graham’s namesake and, ironically, this misleading language sits on a picture of Warren Buffett.
Columbia is obviously a great school, and the people who are affiliated with the center are undoubtedly smart. Why, then, are they not questioning whether the term “value investing” is a useful tool when teaching investing?
Here is another one. Ben Graham Centre for Value Investing at the Ivey School of Business. They are promoting two different value investing conferences and one value investing seminar. They are also promoting a Value Investing book. The book apparently discusses both a Graham and Buffett search approach, but neither of these masters thinks “value investing” is actually a thing!
Yet another Ben Graham namesake: Benjamin Graham Value Investing Program at UCLA. This one is especially near and dear to the author’s heart who is a UCLA graduate and actually took a class with Andrew Atkeson, Stanley M. Zimmerman Professor of Economics and Finance and co-founder of this program. I loved attending UCLA and I am a Bruin for life, but at the same time, I don’t believe the participants in the Value Investing Program will receive the same value I did from an UCLA education.
Warren Buffett obviously supported this last initiative (the UCLA program homepage includes a letter from him), but It’s not exactly a secret how Buffett and Munger feel about business schools in general:
And this:
Here is Munger’s best line in this video. Did we tell you he is a straight shooter?
A huge majority of the business school teaching in the field of investment … is not what we believe, and not what Warren was taught years ago by Ben Graham.
And here is Buffett’s zinger:
I would say, investment/finance teaching in this country, in general, is kind of pathetic.
Mic drop…
