Mr Jim Clarke, here on referred to as Mr. Clarke, started the talk with a brief introduction about his work. Mr Clarke is the Co-manager of Brandywine Global Investment. He started off as financial analyst in Morgan Stanley, right after his graduation from Williams College and later on took on the path of value investing in Brandywine.
“Value Investing is an interesting way to invest capital”. With this he started talking about value investing. He shared an interesting story about technology stock prices in early 2000’s. The technology stock prices soared up due to the innovations in Microsoft. While everyone was after the technology stock shared, he and his company ended up buying Ball corporation’s stock, a company selling beverage cans. The reason for this was because the stock prices were significantly cheaper. According to Mr Clarke“You won’t buy the company everybody loves” because the costs are too high.
Then he moved on to talk about the price,value and cost. Price is what you pay and value is what you get. He talked about Margin of Safety which is the difference between cost and value. Margin of safety is an important determinant in the stock market.
He compared stocks to tiny pieces of business and told us to ask yourself the same questions you would ask as if you were buying a new business. One should look at the market price, cost, net earnings and debt as well as Assets and Liabilities. Only after taking all the aspects into consideration should one proceed with the purchase of the stocks.
Concluding his talk on value investing, Mr Clarke ventured into “how to get an internship in this sector”. Four advices he gave were:
1. Should be ready to play with numbers
2. Read Wall Street Journal
3. Read books on investing
4. Networking with alumni in the respective field
He further suggested to not let few hundred dollars stop you from taking a job. After that we entered a Q/A session with students asking him questions ranging from investment, value investing to different job opportunities.
The talk ended at 10:15 pm. We would like to thank Mr. Jim Clarke for holding his talk and taking some time out from his busy schedule.
See you on Wednesday, 30th October. Until then “Buy fear and Sell Greed”!