The Graph and the Pen: the bibliography of Financière de La Clarté

For the launch of this new section “The Graph and the Pen”, we invited La Financière de La Clarté to share its bibliography.

At Financière de La Clarté, we are convinced that reading is an inexhaustible source of knowledge and that it is essential to perpetually enrich our investment philosophy. We share with you our main references.

Margin of safety

Klarman, S. (1991). Harper Collins.

This book written in 1991 by Seth Klarman[3] (Beaupost Group) is a timeless addition to our library. Although difficult to buy (rare and expensive) it is still a bible for any long-term investor and “stock-picker”. Note that there is no French translation of the work. The quotes we remember:

“The biggest challenge is maintaining the patience and discipline to buy only when prices are attractive and sell when they are not, avoiding the short-term performance frenzy that affects most market participants.» Introduction

“In the long run, the value-based approach works so well that few, if any, advocates of philosophy ever abandon it.p.88.

Security Analysis

Graham, B., & Dodd, D. (2015). Valor Editions.

The major work of Benjamin Graham[1] & David Dodd[4] is the fundamental foundation of the value investment strategy. This Magnum opus is a must and its latest edition brings together the comments of legendary investors (Buffett, Klarman, Marks…). The quotes we remember:

“It is in the universe of companies that are often ignored that the investor will logically find his interest and that the financial analyst will show his talents.p.71.

“In our opinion, buying on short-term prospects is buying speculative stocks. The weakness of this strategy is that the price is already part of the market consensus.p.631.

The little book to beat the market

Greenblatt, J. (2011). Valor Editions.

In “The Little Book to Beat the Market”, Joel Greenblatt (Gotham AM) presents the basic principles of the “Value-Quality[5]” strategy (notably taken up by Financière de La Clarté). This book clearly traces the methodology for investing with meaning and results. The quotes we remember:

“Stock prices fluctuate sharply over short periods of time. This does not mean that the value of the same companies has changed significantly during this same period. In fact, the stock market acts like a crazy guy called Monsieur LeMarché.p.48.

“Despite the fact that, in the short term, Mr. LeMarché can set the price according to his mood, it is the true value of the company that becomes, in the long term, important to him.p.105.

Value Investing[2]: Tools and Techniques for Intelligent Investment

Montier, J. (2009). Wiley.

“Value Investing: Tools and Techniques for Intelligent Investment” is probably my favorite book (Thibault Le Flanchec). Bought in the Waterstones bookshop in Cambridge, this 394-page book is what I would have wanted to write. Montier’s reasoning (GMO) is structured, clear, logical. I can’t count the number of times it has been opened. Fortunately, its cardboard cover is robust! Note that there is no French translation of the work. The quotes we remember:

“In the world of modern finance, the love of numbers has replaced the desire for critical thinking. As long as something is associated with a number, it is considered gospel truth. Research shows that people are often fooled by the use of pseudoscience. Just making things complex makes people believe them more! Risk managers, analysts and consultants are all guilty of using pseudoscience to promote an illusion of security. We must all be on our guard against the artificial deployment of insignificant numbers. Critical thinking and skepticism are the least rated (and rarest) tools in our world.p.29.

“We spend too much time trying to find out more and more about less and less, until we know everything about nothing. Rarely, if ever, do we stop and ask what we really need to know! p.195.

Richer, wiser, happier

Green, W. (2022). Valor Editions.

My last discovery (Thibault Le Flanchec). Far from academic and sometimes monotonous books, in this book Green traces these exchanges with references of investment (Monnish Pabari, Sir John Templeton, Howard Marks, Charlie Munger …). A well of anecdotes coupled with a dynamic and pleasant writing style. It is more a question of philosophy, art of living and thought, than of figures and quantitative studies. The quotes we remember:

“There is no reward for frenzied investors. On the contrary, succeeding in investing is essentially waiting for those rare moments when the chances of making money far outweigh those of losing money. p.34.

“We don’t get paid to be active, just to be right.p.38.

Termes et définitions
1. Benjamin Graham ( Benjamin Graham ) Benjamin Graham est un économiste et un investisseur américain. Il est considéré comme le “père” de l’investissement à…
2. Value Investing ( Value Investing ) L’investissement axé sur la valeur, ou “Value Investing”, est une stratégie d’investissement qui se concentre sur l’achat d’actions…
3. Seth Klarman ( Seth Klarman ) Seth Klarman est un investisseur et gestionnaire de fonds américain. Il est le fondateur et le directeur général…
4. David Dodd ( David Dodd ) David L. Dodd était un économiste et professeur américain connu pour ses travaux sur la théorie de la…
5. Value-Quality ( Value-Quality ) Un portefeuille “Value-Quality” est une stratégie d’investissement qui combine deux approches majeures de sélection d’actions : l’investissement axé…
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