Masters of Stock Picking: Value Investing Expert Charles Brandes Featured

Liberty Times' "Wealth Freedom" channel, in collaboration with Taiwan Economic News, is presenting a series of investment strategies from renowned international masters. The latest feature focuses on the value investing approach of Charles Brandes, a protégé of Benjamin Graham.

Brandes, who founded Brandes Investment Partners in 1974, grew its managed assets from $130 million to over $75 billion. His Brandes Global Equity Fund achieved a 17.91% annualized return over twenty years, significantly outperforming the MSCI World Index and earning multiple awards. His AGF International Value Fund also demonstrated exceptional long-term performance.

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The strategy quantifies this approach, substituting net asset value for traditional discounted cash flow models.

The core of Brandes' philosophy, as presented, rejects reliance on future predictions, emphasizing "margin of safety" and a company's intrinsic value. The research quantifies this approach, substituting net asset value for traditional discounted cash flow models. A backtesting framework was constructed to examine the strategy's performance using historical market data.

The study defines "margin of safety" as the buffer created when an asset's intrinsic value exceeds its market price, mitigating risk even if future business or market conditions deteriorate. The research utilized data from all listed companies on the Taiwan Stock Exchange and OTC Exchange from 2013 to 2025, focusing on financial statements and director shareholdings. The actual backtesting period ran from January 1, 2020, to April 21, 2025, to ensure data integrity and rigorous strategy evaluation.

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Margin of safety refers to the protective space created when an asset's intrinsic value is higher than its market price.