6. The World Is Biased

Investors need an arsenal of advantages if they are to operate successfully in a world of colliding markets and actors. Solid financing and expertise are important. As discussed, political access can be a strength. A third, less obvious, but increasingly important advantage is reputation.

In developed economies and with traditional value approaches, an investor’s reputation is certainly critical and helps one become an attractive buyer. In more uncertain and unstable environments, however, this “buyer of choice” effect becomes much more powerful. An investor with a strong reputation not only has preferential access to otherwise inaccessible deals, but also can often act as the solution to the very regulatory grayness, weak legal systems, and political and cultural differences I have cited as challenges. As uncertainty grows in an environment, so does the power of reputation.

It is one of the peculiarities of global investing that reputation has such amplified power, particularly in private negotiated deals. For example, if a Chinese state-owned enterprise (SOE) such as Founder in Beijing and a private American company such as Sutter Health in California are interested in partnering or collaborating in healthcare projects, there are likely very compelling business reasons for doing so. But in practice, such deals rarely happen due to both real and perceived risks. One is a private company, and the other is a state-owned enterprise. One is in a Western rule-of-law liberal democracy, and the other is in a state capitalist system. And of course large cultural and language gaps exist. The deals just tend not to happen.

But, in such a situation, the participation of a highly reputable investor or company can often make all the difference—and effectively become the solution to all these problems.

Weak rule of law, frequently changing regulations, lack of transparency, poor governance, limited minority shareholder rights, and unstable markets are all red flags and real risks—and investor apprehension is both prudent and warranted. Dealing with these very real increases in uncertainty is the central challenge to moving into global investing.

But also without question, many (most?) investors today are dramatically overstating these risks. The behavioral finance issues related to crossing borders and entering fundamentally different investment environments are not only large but seem to be growing. The worldwide landscape today is covered with investors behaving oddly.

The starting point for understanding much of this current behavior is to separate the real risks from the perceived ones. We can manage the real risks with the approach outlined in Chapter 2, “Rethinking Value in a Global Age”: We eliminate the downside uncertainties in the current and long-term margin of safety, we quantify the risk, and we invest surgically. For the perceived risks (all the fears, lack of comfort, language barriers, and so on), we can acknowledge them in ourselves and then take advantage of them in others. Paraphrasing Warren Buffett, when others are fearful, that is the time to be greedy. This chapter and the next are about how to do this.

It turns out that colliding markets create lots of new biases. And reputation is my weapon of choice for taking advantage of them. Hence, in terms of negotiated deals, I consider this the second value key—reputable capital.

Note that Figure 6.1 classifies all these real and perceived “cross-border” risks as cross-border inefficiencies and mispricings. These are mispricings like any other—a deviation of price from true value—but they also can create significant hurdles to cross-border capital flows. Both the company mispricings and hurdles to capital flows can be targeted with a value approach.

Figure 6.1. Biases and cross-border inefficiencies and mispricings

That reputation has value in such situations should not be surprising. Deals and investments have always taken place in environments where the rule of law is limited, from the American West in the 1800s, to the Middle East in the 1980s, to Russia today. People just tend to do business with people they trust—family members, friends from grade school, and so on. And lots of marriages between the children of business partners occur. Relationships and reputation are the common solutions to increased instability. And if you’re trying to do deals with new business partners, it usually requires building very close relationships with them (there is a reason why everyone goes out drinking together after every meeting in China and Russia). In many ways, Western investors have become overly reliant on enforceable contracts and the rule of law—and have somewhat lost their past abilities to build solid long-term trusted working relationships.

The most extreme cases of cross-border inefficiencies arise in deals between two emerging-market companies, such as China-to-Saudi deals. I call these “porcupine deals” because they resemble two porcupines trying very carefully to kiss. In these cases, rule of law, regulatory clarity, proper governance, and other standard controls are largely missing on both sides of the deal. The geographic, cultural, and language gaps are much greater. Even finding Arabic-to-Chinese translators for the meetings can be difficult. So when the two parties discuss potential deals, they encounter real structural problems, large perceived risks, little to no trust, and no professional or personal relationships to overcome them. In such situations, a highly reputable investor can enter and enable the deal to happen. Prince Waleed has referred to such situations as “openings.” He has been very successful in targeting a number of them, including Middle East and North Africa (MENA)-USA, MENA-Africa, and MENA-China.

At the start of this book, I argued that investing in a new global century requires letting go of our view of the last one. This was an analytical argument about the need to rethink our value strategies, but it was also a psychological argument. It has a lot to do with recognizing our own psychological issues when confronted with fundamentally different investment environments. Although capital and trade have gone global fairly easily, direct investing remains overwhelmingly person-to-person. The increasing collision of markets and actors is creating a fairly fascinating new subtopic in behavioral finance.

The Room Looks Different Depending on Where You’re Sitting

Cross-border bias impacts pricing, and risk is often a matter of perspective

Establishing the cost of equity is one of the more interesting calculations in global investing. When companies or investors from the West try to decide the cost of equity for an investment in a country such as Russia, this figure becomes the catchall for every bias and fear. Western investors might consider an investment in U.S. retail to have a 10% cost of equity but a similar one in Russian retail to carry a 20% to 25% cost. This calculation becomes particularly interesting when a deal involves partners from both the developed and developing markets, and everyone needs to agree on a common number. If you’re operating worldwide, the cost of equity is often where the rubber meets the road in terms of behavioral finance.

For example, in 2004, Saudi Arabia opened a public bid for its second mobile telecommunications license. Mobile service is a business that functions particularly well in emerging markets. The networks are highly scalable and cell phones are now relatively cheap. Mobile service tends to be good at quickly capturing revenue from very large populations of low-income consumers, often scattered across wide geographies with limited infrastructure. A good example is China Mobile’s recent extension of service to the countryside (China’s lowest-income population). In 2007 alone, their users increased by almost 100 million, from 332 million to 414 million, mostly from this extension to the countryside. And with the advent of prepay service, the billing and nonpayment problems of developing economies can also now be managed fairly effectively. Plus, governments often issue only two or three licenses, so it is one of those government-skewed markets with artificially limited competition. You can actually get a competitive advantage from the government regulation, the network effect, and the local economies of scales—a competitive advantage tri fecta. As a result, mobile service companies in developing economies are businesses everyone is trying to get into.

As the second Saudi mobile license was put up for auction, Prince Waleed became interested and started putting together a joint venture to make a bid. Given the technical and operating requirements, many of the local bidders looked for European partners and Kingdom Holding Company decided to partner with Spain’s Telefonica. But this meant that Kingdom Holding and Telefonica had to jointly determine what price to bid for the license, and this raised the cost-of-equity question.

Viewed from Spain, Saudi Arabia is a risky market. It’s far away. It’s not the most pleasant place to be. Nobody speaks Spanish. The cost of equity could be 15%, 20%, or 25%.

However, Prince Waleed has been doing business in Saudi Arabia for 30 years and did not consider it geographically or politically risky. In fact, many investors with experience in the Middle East consider it to be one of the safest, most stable places to do business. It is worth noting that during the recent financial crisis, Spain was designated as one of the financial PIGS (Portugal, Ireland, Greece, Spain) while Saudi Arabia was barely impacted. The cost of equity for Saudi companies doing business in Saudi is more like 10% to 12%. What is the right cost of equity for a Saudi–Spanish venture?

The mobile license was eventually awarded to Etihad-Etisalat, the United Arab Emirates (UAE) mobile operator. Its high bid had a lot to do with how it viewed Saudi Arabia as a strategic market. But the fact that the highest bid was made by a regional company is telling. Similarly, a Kuwaiti Mobile Telecom Company (MTC)-led consortium later won the bid for the third Kingdom of Saudi Arabia (KSA) mobile license in 2007. How risk is perceived by local versus foreign companies is an important question. This is also a reminder that in emerging markets, public equities and open bids attract too much attention and capital. Hence, value point’s focus on privately negotiated transactions, in both private and public equities.

In global investing, how things look really does depend on where you are sitting. There can be dramatically different perceptions of risk between Spain and Saudi Arabia in a way you would never see between New York and Texas, or between Canada and the UK. By separating these risks into the real and the psychological, we begin to uncover the actual stakes in a particular investment.

The Disproportionate Bias of Western Investors

Western investment approaches to perceived “risky” markets tend to follow a common pattern. Either investors and companies avoid developing markets (they avoid the risk by avoiding the market), stay in public stocks, or stick to short-term plays. Western interests notoriously (in my point of view) shy away from longer-term private investments, which unfortunately is where most of the value opportunities are. And when they do enter a private partnership, they typically take a noncommittal position (franchise fees up front, minimal capital at risk, exit, or IPO in two years). All of this runs counter to what I believe is Graham/Buffett’s greatest lesson: that you acquire wealth through the long-term growth in economic value per share.

In a 2010 discussion, the newly appointed head of international investments at Apollo Management described how the firm was struggling with the question of how to break out of its current situation of having 90% of its investments in the United States and Europe, when the firm’s long-term goal was to balance its portfolio between international and domestic markets. This meant going into developing markets. It also meant dealing with a U.S.-based investment committee whose members had little experience outside of Western markets.

The more common approaches to this going global problem typically include the following:

• Making short-term investments in overseas public markets. This is not a bad first step and is one I recommend in the global investment playbook detailed in Chapter 12. It expands one’s circle of competence and can position an investor to later move into private opportunities. But as mentioned, emerging-market public markets are often considered the “dumb money,” so this approach has its own risks. And most overseas public markets are still characterized by too few companies and too much money.

• Buying Western or Japanese stocks that have significant exposure to developing economies. This is fairly logical, but it can also result in swapping a perceived developing-market risk with a real increase in uncertainty. Most multinationals break out little detailed information about their developing market activities.

• Investing in the inputs, particularly natural resources, for high-growth economies. China is usually the primary target of this strategy. It is one of the largest sources of global growth and is very low in domestic resources.

• Investing in a fund of funds between the developed and developing economies, thereby connecting global capital with local investment talent. Again, this is a possible first step to direct private investing but seems a bit indirect.

All of these methods strike me as conspicuously contorted and awkward attempts to stretch out from what is already comfortable. In the West, if you like a company you just buy it. Why such complications elsewhere? As the investment world gets more global, more and more Western investors seem to be either contorting themselves or reflexively throwing more and more opportunities into the “too hard” bucket. These perceived risks, particularly a feeling of “foreign-ness,” are powerful and surprisingly resilient.

This is ironic, because value investors are supposed to be the experts at identifying biases. But clearly, significant psychological biases exist in the investor community when going global. It is often possible to predict how a Western investment group will act or where it will pursue deals simply from the cultural backgrounds of its staff. If a group has employees of Chinese descent, it typically expands to Asia and seems to end up in Hong Kong. If it has employees of Indian descent, it gravitates to India. And if it has mostly employees who don’t speak a second language, it seems to end up in India, Dubai, or Singapore. The pattern is conspicuous. At what point does a circle of competence become an excuse to stay with what is comfortable?

The strategies presented here are a departure from and almost a reaction to this pattern. It’s a back-to-basics, or back-to-Graham, approach in which you return to Graham’s original methods, take out a blank piece of paper, and start from scratch.

From this, my conclusion is that the most attractive wealth-creation opportunities in a new global age are direct, value-based, long-term investments that capture growth in per-share economic value. It is the strategy that appears to be the most lucrative and to offer the greatest number of opportunities. Ironically, it is also the strategy that most Western-based investors seem to fear the most.

Reputation Lets Your Capital Punch Above Its Weight Class

Four ways in which reputable capital can help investors

For investors hunting for deals in a global landscape, capital with a good reputation is a real strength. It can create advantages at the deal level and occasionally add value at the company level. So I have designated reputable capital as a second value key, as shown in Figure 6.2. Not only can an investor use this to get preferential access to deals, he or she can also add value to them and take advantage of many of the mentioned biases. If your reputation is strong, your capital will be valued more. It’s that simple.

Figure 6.2. The reputable capital key and cross-border inefficiencies

GE, which has arguably one of the world’s best corporate names, is a good example of the value of reputation in global investing and deal-making. GE Money, the consumer finance arm, has been particularly successful at making direct investments across Asia, the Middle East, and Eastern Europe. Recent investments and deals have included local banks and retailers in Turkey, Spain, and the UAE. And they are very much in demand in other emerging markets, such as Africa. If you are a medium-sized company, in Kenya or Latvia, an investment from international brand name GE, the company of Thomas Edison, is very attractive.

Another recent example is Warren Buffett’s 2008 investment in Shenzhen-based BYD, China’s largest maker of batteries and possibly one day, electric cars. BYD is one of those stories that wakes up Westerners to how much the world has changed in the last ten years. Founded in 1995 by Wang Chuanfu, the company grew to 100,000 employees in less than 15 years. And it has achieved a dominant and defensible competitive position in batteries. It commands more than 50% of the global market share for cell phone batteries, which I suspect was more important to Buffett than its cool but technology-dependent electric cars.

But BYD is also a tightly held company, run and primarily owned by its founder. Chairman Wang has openly stated that he agreed to sell part of the company only because of Buffett’s unique reputation. Even then, he denied Buffett’s request for 25%, and agreed to only 10%. It was a classic Buffett value investment, but getting access was mostly about reputation.

In terms of the uncertainty language presented, reputable capital as a value key can have the following uses:

1. Increased access to deals. As in the GE and Buffett examples, this is the most common use and is an amplified version of being perceived as the buyer of choice.
2. Decreased negotiated entry price. Occasionally, you can secure a lower price on an acquisition or an investment stake—a “reputation discount”—but a good reputation is mostly about limiting the number of competing bids.
3. Greater intrinsic value for the asset or company. A reputable company buying into a target can occasionally increase the target’s value. News Corp.’s recent investment in Rotana, a Middle Eastern media company, will likely increase Rotana’s economic value due to the impact that News Corp.’s reputation will have on attracting artists. Such a reputable partnership also likely won’t hurt if the company IPOs next year in Dubai.
4. Potential advantage when competing for deals. This type of advantage works on both sides. Not only do reputable investors have an edge, but a highly reputable emerging-market company typically is in a very strong position when dealing with foreign suitors or partners.

These advantages can be seen in the value framework shown in Figure 6.3.

Figure 6.3. The uses of reputable capital

The most impressive example I know of the use of reputable capital was in the 1990s, when Prince Waleed was one of the most liquid investors in the world. He conducted billions of dollars of high-profile negotiated investments in Western companies, including Citigroup, Euro Disney, the Fairmont, the Four Seasons, and Canary Wharf. These deals, typically in the hundreds of millions of dollars, were happening almost every month at certain points. His approach was to buy into companies he described as “on their knees” or “down but not out” and to use his capital as his “ultimate weapon.” In such distressed situations, the combination of capital and a very good reputation can be powerful in negotiated transactions. It was during this period that Waleed started to be widely described as both a “white knight” and a “Western bargain hunter.”

You will note that in these discussions I frequently mix company advantages and deal advantages. A Saudi mobile service company likely has significant competitive advantages. Warren Buffett has deal advantages relative to investors with lesser reputations (effectively, everyone). Recall from Figures 6.1 and 6.2 that I always ask three primary questions about the quality of the company (#1), the price (#2), and the deal structure (#3). In this chapter, the reputation and the behavioral finance questions raised mostly impact the price (#2) and the deal structure (#3). The investor biases and cross-border mispricings as well as occasional “reputation discounts” are about getting a low price. The increased access and increased intrinsic value are about getting the deal and stabilizing the margin of safety. In the following chapters, this distinction between deal advantages and company advantages will become more important.

How to Create an Emerging-Market ATM

Reputable capital + political access = a powerful investment approach

Reputation and political access can be used separately with fairly good results, but when they are used simultaneously, the results can be truly impressive. In fact, the generated cash flow can sometimes be so great that it creates what I call an emerging-market ATM—a simple structure that just shoots out cash.

One example of an emerging-market ATM that is truly impressive in both its scale (and cash flow) is Prince Waleed’s one-mile skyscraper in Jeddah (see Figure 6.4). Although the exact height of the tower is still being decided, it will likely reach well above .62 mile and possibly to 1 mile. This would make it approximately four times the height of the Empire State Building and twice the height of the Burj Dubai/Khalifa, currently the world’s tallest building.

Figure 6.4. Waleed’s one-mile tower

The mega-tower will be the centerpiece of a more than $10 billion real estate development occupying 3.2 square miles of land in northern Jeddah. The development is nothing less than the creation of a new modern city. It is the type of project that in many ways has come to symbolize the abilities and grand ambitions of the developing economies and their players.

Waleed’s new city will occupy an entire peninsula on the Red Sea. Boats will be able to berth in a newly constructed Sydney-like harbor that will be excavated in the center of the development. Multiple skyscrapers and bay-front communities will line the new inland bay and the waterways that will bisect the development. On the Eastern inland side, visitors will enter via a grand skyscraper-lined thoroughfare similar to Park Avenue. And at the end of the thoroughfare, located on the harbor’s promontory point, will be Waleed’s one-mile golden Kingdom Tower. As far as I know, Waleed’s new city is the grandest and most ambitious real estate development ever attempted.

A skyscraper of this magnitude raises some interesting design questions. In terms of buildings, it is a new animal, not just two or three stacked skyscrapers. Vertical transportation becomes more and more of a problem the taller you make the building, and entering and leaving the tower can easily take 30 minutes. Usable space is also an interesting question. At the base you can have 24,757 square feet net usable area per floor, but this decreases to 11,840 square feet by the 200th floor. So the top floors become less appropriate for office space and more appropriate for residential space. But this raises the question, do people really want to live 3,280 feet up in the sky? However, given the huge total volume, couldn’t we build in large public spaces such as museums, parks, and shopping centers? As the project team went through the design process, we realized that the tower was starting to resemble a city in the sky more than a building.

Viewed this way, the “city in the sky” project offers interesting possibilities such as creating a museum in the clouds (Waleed is currently building a new wing for the Louvre in Paris), or putting multiple hotels in the building, or thinking about floating parks and lakes. It also creates unique problems such as rerouting air traffic from the nearby airport (the tower pokes into the airspace) and realizing that any fire escape plans may require giving people parachutes.

But this is a value investment from start to finish, and it’s a fairly spectacular emerging-market ATM. Prince Waleed used both political access and reputable capital to buy a large piece of land, received approval to build an iconic tower (very political), and then pumped a huge amount of value into it at the time of purchase. The announcement about Waleed’s intention to build the world’s tallest tower caused the land price to surge.

From a distance, this project looks like a real estate development. But looking closer, one realizes Prince Waleed was operating as a solo investor and had no real estate company. In fact, he was doing something the local real estate companies could not. Using little besides reputation and connections, he was turning a land investment of hundreds of millions of dollars into a project worth billions. He was operating a value investor using primarily reputation and political access. The project is mostly an emerging-market ATM.

It was political access that enabled the purchase of such a large piece of land and secured the permission to build such large, iconic structures. And it was reputation that enables him to solve the secondary problem of obtaining the approximately $10 billion of capital needed for the development. In the U.S., this would have been difficult. In the more inefficient capital markets of the Middle East, it should have been next to impossible. All the factors previously discussed came into play: lack of trust, fuzzy contracts, side deals.

Waleed’s unique reputation with real estate buyers, international investors, and local subdevelopers gave him access to required capital. In fact, Middle Eastern investors have been eager to put money into the project. Waleed’s reputation became the solution to both the domestic and cross-border capital market inefficiencies.

The truly impressive part of this deal is that the whole thing was put together by a handful of people sitting in an office. During this period, Middle East Economic Digest published a ranking of the top ten real estate companies in the Middle East and Kingdom Holding made the list. I suspect the editors would be surprised to learn that the entire real estate division consisted of only a couple of people. It was really a value-added investment, consistent with Graham’s Method.

It is important to note the low-cost nature of an approach built on connections, reputation, and capital. There are no physical assets to speak of, no specialists or teams of employees. These deals can often be done with one or two people in a single office, and the cash flows can be spectacular. The ATM seems to print money out of thin air.

Waleed looked at a variation on this same emerging-market ATM real-estate strategy in Shanghai in 2008. The proposed Shanghai development also included a one-mile skyscraper and the primary advantages brought to the deal were the same—political access and reputation. But the inefficiency targeted in this case was the much larger and much more political cross-border gap between Saudi Arabia and China.

For about five years, an unconsummated love affair has been going on between Saudi Arabia and China. The two countries are natural allies: One needs oil, and the other has lots of it. Officials on both sides, unsurprisingly have been looking for ways to build a closer relationship. But so far, their relationship has been limited to high-level summits and a few joint ventures between Saudi and Chinese state-owned enterprises.

The problem, in essence, is insufficient trust and history. Significant cultural and language barriers, as well as regulatory grayness, exist on both sides. And there is little in the way of working history or personal relationships with which to overcome these problems. The Middle East also suffers from a perpetual lack of skilled human capital, where virtually no business executives have any China expertise or experience.

The proposed Shanghai skyscraper project spoke strongly to the major political interests and to this persistent cross-border “gap.” The idea was to do a large, symbolic project that would require truly unique political access—possibly a proposal from the King of Saudi Arabia to the President of China—and very large dollars, likely tens of billions. Not only would it be difficult to get a symbolic tower approved, but for the economics to work, the project would need a lot of surrounding land that could increase in value and offset the expected negative return from the $2–3 billion tower itself. The politics were both the problem and the advantage.

Assuming that the Saudi government could overcome the political hurdles, the next target would be the cross-border inefficiency between the Chinese and the Middle Eastern capital markets. Over the past 20 years, Middle Eastern governments and private groups have invested well over $500 billion in both the U.S. and Europe. But, as of today, very little GCC investment capital has gone into China. In fact, it is conspicuous and telling that while China has been one of the largest growth stories of the past 20 years, the GCC heavyweights, some of the world’s largest investors, have almost completely sat it out. Opening the petrodollar floodgates, between the GCC and China is the holy grail of cross-border financing and is at least a $200–500 billion opportunity. But it would take the right group with the right project and the right connections to do it. Waleed’s reputation applied to a highly political and very large real estate project could potentially be the solution.

This initial concept led to government meetings across Shanghai and Beijing to vet the idea. The most memorable of these was a meeting with the Shanghai Expo development group, the government group that oversees the 3.72 square miles of land being used for the 2010 Shanghai Expo. The expo site is actually the perfect location for such a project. It is in Pudong, close to Liujiazui and on the river. And they had already put in the basic infrastructure and connected it to the subway system, likely 30% to 40% of the project costs. After the 2010 expo, the site would be 80% empty, and they had no set plans for development at that time.

For the first 20 minutes of the meeting, it was clear that the expo management thought this project was ridiculous. The idea of a 3,280-foot tower was unheard of in China. But after hearing about the likely involvement of the Saudi Arabian government and a similar project underway in Jeddah, the expo management began to take the project seriously (many of Prince Waleed’s projects begin with a process of explaining that you aren’t crazy). In fact, the expo team immediately figured out the math and asked if 70% of the land would be enough. Basically, they recognized the value being added to all the adjacent land and wanted to keep part of it.

This project eventually got shelved as the 2008 financial crisis erupted. However, Prince Waleed quickly pivoted and moved forward with an even grander emerging-market ATM located 30 minutes outside of Riyadh. This real estate project, although lacking an ultra-high skyscraper, will likely cover 27 square miles, making it roughly the same size as Manhattan. The vision is to create a massive master-planned desert city and oasis that contrasts nicely with the rather drab state of Riyadh (think Scottsdale versus Phoenix). In the initial phases, it will likely contain 14,000 homes, a Four Seasons resort, and an adjacent personal camp for the Prince covering 1.16 square miles.

The investment strategy in all of these is the same: Use political access and reputable capital to surgically add huge value to a project, thereby turning both government-skewed markets and cross-border capital inefficiencies into capturable value opportunities. The key (really, the only) assets being used in these deals, which total more than $20 billion, are political access and reputable capital.

Such emerging-market ATMs can be seen regularly across the developing world. They are usually noticeable for the large cash flow they throw off and the investors they launch onto the world stage. And as the economic wealth of these developing countries increases, these types of negotiated deals are growing larger and more spectacular.

I suspect the reader now feels I have walked him/her quite a long ways off into the tall grass. Certainly building one-mile skyscrapers in China and the Middle East at first glance appears a long ways off from stock picking in the U.S. But going from Graham to Buffett to Waleed, and from traditional value investing to value point, is not really a trip at all. In practice, it is still a few investors sitting in a room following one consistently applied value strategy. Both Waleed’s one-mile skyscraper and Buffett’s BYD purchase can be simply laid out on the graphic presented.

And the feeling is important. There is something surprisingly resilient about geographic and cultural preferences. Buying a company in Texas from New Jersey just feels more comfortable than buying one in Kenya. But are geographic, cultural, and language factors really significant in your circle of competence? If you can value an insurance company in the U.S., can’t you confidently value one in Africa? (By the way, insurance companies in developing economies are fantastic.)

A colliding world is full of such biases. But if you stick to Graham’s Method, pursue a consistent value strategy, and stay within your circle of competence, it all becomes fairly easy and comfortable. And as a value investor, isn’t the tall grass where you really want to be?