‘Our Recent Performance Sucks.’ Here’s Your $10 Billion Back.
This was recently quoted as a headline to a WSJ article citing the closure of AJO Partners, a boutique value-investing firm founded by Ted Aronson which once had USD 30 bn as Assets Under Management (AUM) at the 2007 peak.
So what made AJO partners shut their fund?
Short answer – Under-performance coupled with the biggest client pulling their money out (USD 500 mn in ticket size.)
Let’s back up a little bit here.
WHAT IS VALUE INVESTING?
Value Investing is the practice of buying an asset ‘cheap’ and selling it when it becomes ‘expensive’. This often begs the question – What is cheap? and What is expensive?
Well, for starters we will not talk about PE ratio today.
Oops.
Mr. Sanjoy Bhattacharyya is a lesser-known individual who’s talked about in the investing circles in this country. His thoughts are often free-flowing and filled with a lot of wisdom. This is precisely the reason we will try to objectively filter Value Investing from his lens from a talk he almost gave 10 years ago!
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