Value Investor Charles Brandes’ Stock-Picking Strategy Applied to Taiwan Shares

A new investment series from Liberty Times and Taiwan Economic News is turning Charles Brandes’ value-investing principles into a framework for selecting Taiwan stocks.

Brandes, a noted student of Benjamin Graham, founded Brandes Investment Partners in 1974. The firm’s assets under management grew from $130 million to more than $75 billion, while its Brandes Global Equity Fund recorded a 17.91% annualized return over 20 years, according to the article. The fund also received a five-star Morningstar rating and other international awards.

The approach rejects stock selection based mainly on forecasts of future data. Instead, it emphasizes a company’s real value and a margin of safety, meaning the protection created when an asset’s intrinsic value exceeds its market price. Buying at a sufficiently low price, the strategy argues, can reduce the risk of losses even if business conditions or markets deteriorate.

To reproduce Brandes’ ideas, the study quantified the strategy and used company net worth in place of a conventional discounted valuation model. It built a backtesting framework using historical market data. The research covers all companies listed on the Taiwan Stock Exchange and the Taipei Exchange, drawing on share prices, financial statements and director and supervisor holdings collected from 2013 onward. Because the strategy requires five years of recent financial information, the actual test period runs from 2020 through April 21, 2025. The results are presented for investment reference only.