Wednesday, April 21, 2021

My Amazon Review of Justyn Walsh's "Investing with Keynes....."

 

Warren Buffett on the Thames

 

Investment banker and now money manager Justyn Walsh has offered up an overview of the investing style John Maynard Keynes where aside from running his own personal portfolio he invested the endowment of Kings College along with several insurance companies. His record as an investor in the troubled 1930’s was phenomenal.

 

Walsh recounts the influence of Edgar Lawrence Smith’s 1924 classic “Common Stocks as Long Term Investments” which became the great intellectual foundation of the 1920’s bull market. In that book Smith recognized that industrial companies by retaining earnings became compound interest machines. During the 1920’s Walsh characterizes Keynes as a momentum investor and in 1929 he paid the price with severe losses.

 

In the early 1930’s similar to Benjamin Graham he became a value investor seeking out individual securities that he believed sold at a discount to their underlying intrinsic value independent of behavior of the overall stock market. This approach is very similar to that of Warren Buffett. Keynes, also similar to Buffett, believed in running a concentrated portfolio where his best ideas would have a real impact. As with Buffett he believed that less than knowledgeable investors should own a broadly diversified portfolio.

 

My main problem with this readable, but somewhat repetitive book, is that there is no data on the year-to-year performance of the portfolios he was managing and there is no inkling of what securities he actually owned. Further he mentions that Keynes had a less than stellar sell discipline but offers no real proof.  Simply put, Walsh over-promises.

For the full amazon URL see: Warren Buffett on the Thames (amazon.com)



 

 

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