Bruce Greenwald on Value Investing in India

Bruce Greenwald is a Professor at Columbia Graduate School of Business & a director of FirstEagle Funds. He currently occupies the professorial chair which was once occupied by Benjamin Graham at Columbia. He conducts an extremely popular course on Value Investing at the school.

He academic background:
BS, Massachusetts Institute of Technology, 1967; MS, MPA, Princeton, 1969; PhD, Massachusetts Institute of Technology, 1978

A couple of years back he did an interview with Outlook Profit, in which he discussed some of his investing principles, as well as taking up some Indian case studies.

The full interview (Courtesy Outlook Profit) is below:

BruceGreenwald Interview


Some of the key takeaways:
Value Investing has outperformed the market by 3-5% historically.

Valuing companies by using the Discounted Cash Flow model is very risky according to the good professor. He believes that the process of estimating future cash flows is highly error prone, as there are a lot of assumptions to be made. Hence, the scope for errors increases.

Invest only in companies with sustainable competitive advantage, as otherwise it is only a matter of time before others will enter the industry, and hyper competition will put downward pressure on margins.