Some investing strategies are timeless – and this one has quietly created fortunes for the world’s greatest investors.
Benjamin Graham invented it. Buffett and Munger perfected it. Sir John Templeton executed it brilliantly.
Buy strong, well-run companies when the market undervalues them.
That’s it. No complicated algorithms. No frantic trading. No “next big thing” speculation. Instead, it’s about understanding businesses – real businesses – whose intrinsic value is higher than the price the market is currently assigning to them.
They produce consistent profits. They generate reliable cash flows. They reinvest intelligently. And they possess competitive advantages that allow them not just to survive, but to thrive over long periods of time.
History gives us some of the clearest evidence of the power of value investing
Benjamin Graham’s partnership generated a remarkable 20% annualised return across two decades—crushing the broader market and laying the foundation for modern value investing.
Buffett and Munger, applied these principles when they invested in confectionery business – See’s Candies.
They made a $25 million purchase that ultimately produced more than $2 billion in earnings. That’s a staggering 7,900% return over 38 years – a perfect example of a wonderful business at a fair – or mispriced – value.
Sir John Templeton, meanwhile, executed this philosophy under the most extreme conditions imaginable. In 1939, as Europe braced for war, he bought 100 shares of every NYSE-listed company trading under $1.
Within just a few years, he had quadrupled his entire portfolio. Not because those companies were glamorous – most were unloved, overlooked, even distressed – but because the market had simply priced them far below their true long-term potential.
What makes value investing timeless is that it’s rooted in human behaviour…
Markets swing between greed and fear. Investors overreact. They chase momentum. They sell on panic. They misprice quality. And this mispricing creates opportunity for disciplined investors who focus on value rather than noise.
The modern market – hyper-connected, algorithmically driven, emotionally charged – might look different from the world of Graham, Buffett, or Templeton, but the underlying psychology hasn’t changed at all. If anything, opportunities for mispricing are more frequent today because information travels faster, investors react quicker, and narratives shift overnight.
Why now is precisely the moment to revisit this timeless principle of mispricing
The JSE All Share’s performance this year has been anything but broad-based – driven almost entirely by a narrow group of winners (Gold miners, PGMs, telecoms, tech etc)
When an index becomes top-heavy – when performance is concentrated in a few sectors and a few mega-caps – it almost always creates mispriced opportunities elsewhere.
Right now, the JSE is full of them. And for disciplined investors who know how to separate temporary market neglect from real long-term value, this environment is not a challenge at all – it’s an edge.
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