Another Value Investor Explains His Approach

In Warren Buffett's "Superinvestors of Graham and Doddsville," he describes the various approaches Walter Schloss, Bill Ruane and others apply to value investing. The differences, however slight, can be seemingly endless.

James Bartholomew (who I don't know) describes his approach in The Daily Telegraph:

Then there are those – mostly professionals – who closely analyse profits of companies to decide what is their real profitability. They consider, quite rightly, that the declared profits of companies are not calculated according to rules that accurately reveal what an investor needs to know.

Others invest according to charts of share prices. And there have been many other approaches. I am fundamentally a value investor with a bit of everything else thrown in.

I do look at the charts in a rather simple sort of way. I try to invest in businesses which have some kind of advantage over others. Above all, I try to look at the numbers (which many investors don’t bother with) while always recognising the psychology of the situation – both for the company and for investors.

He goes on to discuss one of his holdings:

When I first bought a large stake in Healthcare Locums last year, the market was still pretty sceptical. The company had been through many changes in a short time.

I was lucky to have met the managing director, Kate Bleasdale, when she worked for another company and I was confident she knew what she was doing. But the market took its time to recognise this was a good business that could keep increasing profits even through a recession.

The credibility of the profit forecasts gradually improved and, in response, the shares have done very well. While the overall market has fallen about 15pc, Healthcare Locums has risen 29pc this year and has more than doubled from the price at which I first bought it.