Joshua Kennon/Value Investing

[Hoya21]

Hi all,

I'm a medical student who is also interested in finance. I read Joshua Kennon's blog pretty religiously for a few years until he started his own asset management firm with his spouse and subsequently deleted a good portion of his blog. I'm all for indexing, and even Joshua is a proponent of indexing for the vast majority of investors. However, he is a very disciplined value investor. I am nowhere close to being able to analyze a business and determine at what price and on what terms a stock should be purchased, however, I'd love to learn that skill and apply it when I have my own funds to manage after residency. I'm wondering if being a value investor of the Joshua Kennon sort is reasonable alongside being a physician? Thanks WCI!

Jake

[Zaphod]

Highly unlikely. He is an incredibly smart, driven and fully immersed into business. Most doctors do not have that kind of time nor the training. He has both plus the experience.

Shame he deleted some of his blog he has great content.

[PhysicianOnFIRE]

I'm a value investor, but I spend very little time on it. I own both VSIAX (small cap value) and VMVAX (mid cap value) funds in my portfolio, creating a value tilt.

[CM]

Hoya21 wrote:

Hi all,

I’m a medical student who is also interested in finance. I read Joshua Kennon’s blog pretty religiously for a few years until he started his own asset management firm with his spouse and subsequently deleted a good portion of his blog. I’m all for indexing, and even Joshua is a proponent of indexing for the vast majority of investors. However, he is a very disciplined value investor. I am nowhere close to being able to analyze a business and determine at what price and on what terms a stock should be purchased, however, I’d love to learn that skill and apply it when I have my own funds to manage after residency. I’m wondering if being a value investor of the Joshua Kennon sort is reasonable alongside being a physician? Thanks WCI!

Jake

Click to expand...

.

[Hoya21]

Thanks all. That's a bit disappointing, but probably what I needed to hear.

[Zaphod]

CM wrote:

Hoya21 wrote:

Hi all,

I’m a medical student who is also interested in finance. I read Joshua Kennon’s blog pretty religiously for a few years until he started his own asset management firm with his spouse and subsequently deleted a good portion of his blog. I’m all for indexing, and even Joshua is a proponent of indexing for the vast majority of investors. However, he is a very disciplined value investor. I am nowhere close to being able to analyze a business and determine at what price and on what terms a stock should be purchased, however, I’d love to learn that skill and apply it when I have my own funds to manage after residency. I’m wondering if being a value investor of the Joshua Kennon sort is reasonable alongside being a physician? Thanks WCI!

Jake

Click to expand…

I’m not familiar with J Kennon, but if you’re asking about selecting individual stocks, I think it’s unlikely that you’ll benefit from that as a working physician. I’m a former healthcare equity analyst who earned an MBA (accounting and finance) from Booth, as well as the CFA designation, and I don’t try to do that for my own portfolio because it requires a great deal of research and I don’t have enough time or energy. Now after I retire …

On the other hand, Michael Burry did it successfully.

Click to expand...

Even he quit though, recognizing that it takes concentration and focus. You can do that with one thing, but hard to balance two very time/focus intensive things at once.

[CM]

Zaphod wrote:

CM wrote:

Hoya21 wrote:

Hi all,

I’m a medical student who is also interested in finance. I read Joshua Kennon’s blog pretty religiously for a few years until he started his own asset management firm with his spouse and subsequently deleted a good portion of his blog. I’m all for indexing, and even Joshua is a proponent of indexing for the vast majority of investors. However, he is a very disciplined value investor. I am nowhere close to being able to analyze a business and determine at what price and on what terms a stock should be purchased, however, I’d love to learn that skill and apply it when I have my own funds to manage after residency. I’m wondering if being a value investor of the Joshua Kennon sort is reasonable alongside being a physician? Thanks WCI!

Jake

Click to expand…

I’m not familiar with J Kennon, but if you’re asking about selecting individual stocks, I think it’s unlikely that you’ll benefit from that as a working physician. I’m a former healthcare equity analyst who earned an MBA (accounting and finance) from Booth, as well as the CFA designation, and I don’t try to do that for my own portfolio because it requires a great deal of research and I don’t have enough time or energy. Now after I retire …

On the other hand, Michael Burry did it successfully.

Click to expand…

Even he quit though, recognizing that it takes concentration and focus. You can do that with one thing, but hard to balance two very time/focus intensive things at once.

Click to expand...

Good point. He left medicine before becoming successful hedge fund manager.

[The White Coat Investor]

Why not try it? Just start with 5% of your portfolio and keep careful records. In a few years you'll know if you're skilled/lucky and if you're enjoying it or not.The only risk is you are successful due to luck and mistake it for skill.

[Complete_newbie]

Zaphod wrote:

Highly unlikely. He is an incredibly smart, driven and fully immersed into business. Most doctors do not have that kind of time nor the training. He has both plus the experience.

Shame he deleted some of his blog he has great content.

Click to expand...

Why did he delete it? TMI about assets he now manages? wouldn't have been a good read (jsut looking at his blog now)

[Zaphod]

The White Coat Investor wrote:

Why not try it? Just start with 5% of your portfolio and keep careful records. In a few years you’ll know if you’re skilled/lucky and if you’re enjoying it or not.The only risk is you are successful due to luck and mistake it for skill.

Click to expand...

This is a big risk, especially in a bull market.

[Hoya21]

He went into really elegant detail about his thought process when he would value a business and wrote about it numerous times. His favorites, in no particular order, were Coca Cola, Tiffany and Co, Johnson&Johnson, Hershey (prior to current leadership), Nestle, etc. when the price was right. It was really neat, blue-chip, value investing a la Ben Graham in 2017. He would never indicate in a post whether or not he bought any but it'd be fairly clear if you read between the lines. So, "yes" is the answer to your question most likely.

[Hoya21]

Whoops, thought I included the quote in my reply. That was to you @complete_newbie

[VagabondMD]

The history of stock investing is littered with value gurus. Early in my investing career, my guru was Marty Whitman, a finance professor at Yale and mutual fund magnate of the 90's and 00's. At least Marty came up with some more interesting ideas than JNJ, KO, and Tiffany! Marty had me in off-the-beaten-path companies like the Swedish holding company Investor AB, the Japanese conglomerate Tokio Marine (yes, it is spelled correctly), and Leukadia National, the poor man's Berkshire Hathaway. I also followed (and invested with) Bill Nygren at Oakmark. Both are so smart and make such convincing arguments why they are right and, at the moment, the market is wrong.

Now that I am a more mature investor, I silence the siren call of the value god du jour. Some of them (ie. Seth Klarman) will make a ton of money for their investors. But practically speaking, it is unlikely that you will fall in with Klarman until after he has worked his magic. Better to understand the academic finance literature and if you are value inclined, find a rules-based strategy (like DFA or a value-tilted Vanguard fund) to scratch the value itch.

[TheHappyPhilosopher]

Joshua has a fantastic blog. One of my favorites. He is a really smart guy, and a fantastic writer. He took some of the investing posts off I think for compliance reasons, but the best stuff on his blog is the non-financial stuff. He has some fantastic articles on ethics and philosophy and often writes about very interesting historical events. He has cut way back on his writing much to my dismay.

http://www.joshuakennon.com/

[Zaphod]

Yes, his stuff is amazing. He also writes encyclopedic amount of all kinds of finance articles on about.com. He writes a lot. While he writes for informational and explanation of overall principles regarding those basic well known companies, that was not really his overall investing style. Loved the case studies, dolly parton for example was an amazing one.

He had some core positions in those kind of things and in some family accounts, but he basically pores over things and finds value in companies most people have never heard of, which is where some value still may be. I dont know if that info is still on the site.