More Than One Way to Find Value 219In March, AgFeed shares hit $ 0.90, valuing the company at
$ 38 million, against 2008 net profi ts of $ 17 million, which were up
from $ 6.7 million the year before. In addition the company had a
net cash position of $ 17 million or $ 0.44 a share and tangible book
value of over $ 1.70.
With overseas businesses, especially smaller ones, investors
should demand a greater margin of safety. In this situation, the
price — which was currently below a conservative liquidation value —
was the catalyst.Conclusion
Value comes in many varieties and forms. Only by continuous effort
and intensity can an investor determine whether bargain securi-
ties exist. Contrary to popular belief, value investing is not rigid in
its approach. In fact, those most successful at investing have dem-
onstrated that investing requires a fl exible and multidisciplinary
mind. Because true value investors avoid the herdlike mentality that
occurs in the marketplace, they demonstrate time and time again
that a successful investment approach requires you to investigate all
angles, even those that might not directly relate to the investment.
Where value investors don ’ t bend, however, is in their discipline
to place the process before the outcome. Value investors are always
mindful of downside risk, understanding that risk represents a loss
of capital and not a volatile stock price. Value investors also recog-
nize the need for patience, understanding that investing is most
successful when pursued over a meaningful period of time. Just as it
is silly to think that a fundamentally sound business can lose 25 per-
cent of its value in a single day, the same line of thinking is applied
to stock prices that experience extreme bouts of price volatility.
Value investors are also skeptical. They avoid participating in
market manias, fads, or any other hot investment of the day. Value
investors hold dear to their hearts Buffett ’ s notion that an expensiveCH010.indd 219CH010.indd 219 9/2/09 11:50:57 AM9/2/09 11:50:57 AM