Taiwanese Investors Get Western Masters' Stock-Picking Secrets

Liberty Times' "Wealth Freedom" channel, in collaboration with Taiwan Economic News, has introduced "Master Stock Selection." This initiative adapts the stock-picking methodologies of renowned Western investment gurus for the Taiwanese stock market, offering readers new avenues for financial planning.

The series begins by spotlighting Charles Brandes, a prominent student of Benjamin Graham and founder of Brandes Investment Partners. Since 1974, Brandes has grown his firm's assets from $130 million to over $75 billion. His flagship Brandes Global Equity Fund achieved a 17.91% annualized return over twenty years, significantly outperforming the MSCI World Index and earning multiple international accolades.

Brandes adheres strictly to the principles of value investing, rejecting reliance on future predictions and prioritizing "margin of safety" and a company's intrinsic value. His strategy advocates for medium to long-term holding periods. To faithfully represent his investment philosophy, this research quantifies his ideas, using net asset value in place of traditional discounted cash flow models and employing a backtesting framework to evaluate strategy performance against historical market data.

The study defines "margin of safety" as the protective buffer created when an asset's intrinsic value exceeds its market price. This concept aims to mitigate risk, ensuring that even if future business operations or market conditions turn unfavorable, losses are minimized due to purchasing at a sufficiently low price. The research covers all listed and over-the-counter companies in Taiwan, utilizing data from 2013 onwards, with backtesting focused on the period from January 1, 2020, to April 21, 2025.