Investment Masters' Stock Selection: Value Investing Expert Featured

The "Wealth Freedom" channel, in collaboration with Taiwan Economic News, has launched a new series featuring investment strategies from renowned global masters. The initiative aims to simplify investment and financial management for readers by applying the stock-picking logic and principles of esteemed European and American investors to the Taiwanese stock market.

The inaugural focus is on the value investing methodology of Charles Brandes. A prominent student of Benjamin Graham, Brandes founded Brandes Investment Partners in 1974. Under his leadership, the firm's managed assets grew from $130 million to over $75 billion. His Brandes Global Equity Fund achieved a remarkable 17.91% annualized return over twenty years, significantly outperforming the MSCI World Index and earning a five-star rating from Morningstar, along with numerous international accolades.

Brandes is a staunch advocate of value investing's core tenets, rejecting the use of future forecast data for stock selection. He prioritizes "margin of safety" and a company's true intrinsic value, advocating for a medium to long-term holding strategy. To accurately represent his investment philosophy, the research quantifies his concepts, using net asset value instead of traditional discounted cash flow models and employing a backtesting framework to evaluate the strategy's historical performance.

The concept of "margin of safety" refers to the buffer created when an asset's intrinsic value exceeds its market price. This principle underscores the reduction of risk, even in the face of adverse future business or market conditions, by ensuring assets are purchased at a sufficiently low price. The study utilizes data from all listed and OTC companies on the Taiwan Stock Exchange and the GreTai Securities Market, covering stock prices, financial statements, and director shareholdings from 2013. The backtesting period is set from January 1, 2020, to April 21, 2025, to ensure data integrity and rigorous strategy testing.