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Bill Nygren: The Key To Long Term Value Investing

In this interview, Bill Nygren from Harris Associates, explains his quite unconventional approach to value investing. Despite being a value investor, his portfolio has recently included tech giants like Netflix, Amazon, Meta, and Alphabet (his largest position). Bill shares his highly effective approach to value investing and the various strategies.

Here are the key takeaways on Bill’s investment philosophy:

  • He aims to buy businesses trading at a significant discount to their estimated intrinsic value, using a 7-year timeframe and assuming a “normal” world.
  • Bill invests in companies expected to grow shareholder value over time, avoiding value traps that are inexpensive for a reason and do not grow.
  • Revenue growth is not a necessity; cash-generative companies with low revenue growth can still produce strong EPS growth through share buybacks.
  • He seeks management teams that think and act like owners, understanding per-share value growth dynamics and aligning their interests with shareholders through ownership and incentives.

And I think one of the biggest lessons learned over being the 23-year-old kid who started in this business to the other end of 40-plus years doing it today is realizing how important the people are.

You know, you come into this business, you’ve got spreadsheet skills that run circles around the more senior people, but they’ve got the nuance of being able to understand the importance of qualitative and the importance of assessing the people you’re investing with. You know, a lot of our holdings, we probably average five years for a typical holding.

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Disclaimer of liability

The above has been prepared by Børsgade ApS for information purposes and cannot be regarded as a solicitation or recommendation to buy or sell any security. Nor can the information etc. be regarded as recommendations or advice of a legal, accounting or tax nature. Børsgade cannot be held liable for losses caused by customers’/users’ actions – or lack thereof – based on the information in the above. We have made every effort to ensure that the information in the above is complete and accurate, but cannot guarantee this and accept no liability for errors or omissions.

Readers are advised that investing may involve a risk of loss that cannot be determined in advance, and that past performance and price development cannot be used as a reliable indicator of future performance and price development. For further information please contact info@borsgade.dk

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