Investment Masters' Stock Selection: Value Investing Expert Featured

The "Wealth Freedom" channel, in partnership with Taiwan Economic News (TEJ), has launched a new initiative to bring sophisticated investment strategies from renowned global investors to the Taiwanese market. This collaboration aims to simplify wealth management for local investors by applying established methodologies to Taiwanese stocks.

The inaugural feature focuses on the value investing approach of Charles Brandes. Brandes, a prominent student of Benjamin Graham, founded Brandes Investment Partners in 1974. Under his leadership, the firm grew its managed assets 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.

Brandes' investment philosophy centers on the core principles of value investing, emphasizing "margin of safety" and a company's intrinsic value, while cautioning against relying solely on future predictions. He advocates for a medium to long-term holding strategy. To accurately reflect his approach, the research quantifies his philosophy, using net asset value in place of traditional discounted cash flow models and testing the strategy's performance through historical backtesting.

The study defines "margin of safety" as the buffer created when an asset's intrinsic value exceeds its market price. This concept is crucial for mitigating risk, ensuring that even unfavorable business or market shifts do not lead to significant losses due to a sufficiently low purchase price.

The research scope includes all listed and over-the-counter companies on the Taiwan Stock Exchange and the Taipei Exchange. Data collected spans from 2013 to the present, covering stock prices, financial statements, and director shareholdings. The backtesting period is specifically set from January 1, 2020, to April 21, 2025, to ensure data integrity and rigorous strategy validation, using only qualifying samples.