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Five lessons in value investing

  • Communications
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  • Apr 6, 2018
Five lessons in value investing

Bryan Pilsworth (left) with Professor George Athanassakos.

Bryan Pilsworth has always been a saver.

“As an investor, you’re inherently a saver because you’re deferring consumption now for a larger return in the future.” Now as the President, CEO and Portfolio Manager, Canadian Equities at Foyston, Gordon & Payne Inc. (FGP), he understands what it takes to find success in his field.

On March 1, he visited Ivey Business School to share his learnings with Professor George Athanassakos' value investing class, and explain how to pick the right companies to invest in:

Understand the company

There are hundreds of companies that you can invest in. As an investor, you need to know your comfort zone. Pilsworth said specializing or understanding something well can help you gain an edge on the competition.

Track record and history

“How much you’re willing to pay for growth is up to you,” he said. The best way to predict the future is to review the past. Before you invest, you should decide if you would be willing to pay for a company’s existing track record.

Balance sheet strength

“When you invest in a company, you have to be very mindful of the debt on the balance sheet,” he said. You want to own a company with strong balance sheets. If there is debt, it’s important to understand what kind of debt it is.

Management

Understand how the management team is going to create value. “Some management teams don’t know [their strategy] and it changes every year – and that’s not good.”

Competitive advantage

Ask yourself the important questions: Why does the company exist? What is their competitive advantage? What makes them special?

If you don’t like numbers, reading, or you haven’t owned a bond or stock and love jumping on the latest fad, investing may not be for you, said Pilsworth. However, if you’re a curious person, who likes analyzing and contemplating, who is inherently skeptical and have been investing already you may have the potential to find success in the world of value investing.