Sven Carlin is the author of Modern Value Investing, a title which last month was ranked the #5 best value investing book of all time.
Modern Value Investing is Sven’s way of providing a contemporary update to the classic value investing titles penned over 50 years ago, such as Benjamin Graham’s The Intelligent Investor.
Sven achieves this and more, resulting in a fresh take on value investing which isn’t derivative or a mash-up of pre-existing schools of thought.
I firmly believe that Modern Value Investing is a modern value investing classic which will maintain its current sales and will sit alongside the likes of Graham as one of the go-to value investing beginners guides.
If you’re interested in hearing more from Sven after reading the interview below, please follow him on Twitter. His handle is @SvenCarlin.
Sven Carlin’s title sits within the following finance book genre hierarchy:
Interview: Sven Carlin
Please could you tell us a little about your professional background and why you felt inspired to write the book?
Sven: My professional background is academic and as a value investor I disagree with most of the academic theories out there. My Ph.D., where I developed a Factor Risk Model for stocks on an emerging market also confirmed that value investing leads to lower risk and higher returns. Then, as most of the books on value investing were written a long time ago, I’ve thought of summarizing the older timeless knowledge and also adding a bit of the modern findings so that the reader can find what fits him best.
So, the book is the result of my process in summarizing other value investment books but also mixing the value investing knowledge with actionable things one can do in the current environment.
This title is a guide suitable for beginners. What drove you to write such a comprehensive guide compared to a more specialist title?
Sven: As it is my first book, I focused on giving an overview of how value investing works, what are the things to be careful about and I also firmly believe investing is and should always be simple. Things start to get dangerous when we start to complicate things too much. A key fundamental investing concept that is not much discussed is the behavioural concept of investing, which is one I dedicated a whole chapter for in the book. That is something always beneficial for both beginners and aged investors.
In the course of researching and writing your book – did you come across anything that surprised you?
Sven: What always surprises me is how little value investing is discussed in the media, how little comprehensive content has been published on it and especially how little research has been done analyzing it. Of course, the academic field thinks the markets are efficient and therefore there is no point in wasting time with value investing. Despite being surprised, I hope things remain like this because so we few value investors, keep our edge on others.
For budding financial writers, what is the one piece of advice would you give to those writing to educate beginners about investing?
Sven: Write! As you do research for your writing, you learn, so by writing you become better – there is no other way.
And finally, I like to ask all authors; when saving and investing your own money, what is your preferred investing style?
Sven: The first big misunderstanding here is the definition of value. Academics look at price to book value and price to earnings ratio that use past metrics while we value investors look at future cash flows and discount them to the present day. When the price of a stock is below its intrinsic value, it is a value stock. So, even a growth stock can be a value stock and that is something superficial financial journalism will never understand. The second factor with value investing is risk – investment returns have to be measured in relation to the risk of permanent capital loss taken.
To conclude, I know value investing is what works and will work forever, the key is to constantly compound over long periods of time. That is the biggest value you can get from investing.