3200: The Values of Value Investing by Vitaliy Katsenelson of Contrarian Edge on Stock Market Valuations

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🗓️ 4 July 2025

⏱️ 11 minutes

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Summary

Discover all of the podcasts in our network, search for specific episodes, get the Optimal Living Daily workbook, and learn more at: OLDPodcast.com. Episode 3200: Vitaliy Katsenelson challenges the simplistic notion that value investing is about buying only the cheapest stocks. Drawing on insights from Ben Graham, Charlie Munger, and Warren Buffett, he reveals that true value lies not just in low prices but in the blend of quality, growth, and sound judgment proving that a Motel 6 mindset won't build a Berkshire Hathaway-sized portfolio. Read along with the original article(s) here: https://contrarianedge.com/values-value-investing/ Quotes to ponder: "I thought value investors were supposed to like cheap stuff." "A $36-a-night room at Motel 6 by the airport, overrun by cockroaches and bedbugs and with questionable plumbing, may be statistically cheap, but it’s not a bargain." "Charlie is not a ‘sidekick’! Charlie changed Buffett’s investment philosophy. Sidekicks don’t do that." Episode references: The Intelligent Investor: https://www.amazon.com/Intelligent-Investor-Definitive-Value-Investing/dp/0060555661 Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is Optimal Finance Daily, the values of value investing by Vitaly Kastenelson of contrarianedge.com.
0:10.7	I organize a conference every summer called Value X Vale. Veil is a quaint, beautiful, ritsy ski resort
0:18.8	tucked away in the gorgeous Rocky Mountains, about 100 miles from
0:22.8	Denver. One day, I received an email from a reader asking why I, a value investor, would have a
0:29.3	conference in an expensive place like Vail. He suggested that as a true value investor, I should
0:35.7	hold the conference in a hotel somewhere by the airport,
0:38.4	where prices were much cheaper. His precise comment was, quote, I thought value investors were
0:43.9	supposed to like cheap stuff, end quote. This email challenged my value investment hood. It made me
0:51.4	question my value investing values. Was that reader right? Was I straying from value investor
0:57.9	traditions? Maybe I should rename the conference Value X Motel 6 and hold it at a $36 a night
1:05.7	remote airport hotel. I recognized that the notion was slightly silly, but it started me pondering, what are the
1:13.5	values of value investing? Let's think about the Bible of Value Investing. Ben Graham's 1949, the intelligent
1:21.7	investor. Graham spent a lot of time talking about cheap stocks. He defined them as the ones that trade at
1:29.4	single-digit price earnings multiples, trade at a discount to book value, or trade below their
1:35.9	cash value, net-nets. Graham placed great emphasis on statistical cheapness. His flavor of value investing is tangible, staring you in the face.
1:47.0	It requires very little imagination. You just need to close your eyes, plug your nose,
1:51.7	take a deep breath, and buy whatever you scrape off the bottom of the stock market abyss.
1:56.7	What Warren Buffett calls the cigarette butt approach to investing. But if the only thing you get out of Graham's teachings is to buy statistically cheap stocks,
2:06.6	then you're short-changing yourself.
2:08.6	This analysis is one-dimensional and ignores much that is important.
2:13.6	In one of my articles, I called Charlie Munger, Warren Buffett's sidekick.
2:19.3	Jeff Matthews, a friend and the author of Pilgrimage to Warren Buffett's Omaha, sent me an impassioned
	...

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