My aim here is to give some thoughts on my approach to value investing to try and spark conversation. I've had reasonable success applying this approach but still make mistakes and want to be a better investor so have decided to outline my approach with the hope that others will comment constructively. For reference, I have been managing my pension since early 2016 and to date have achieved an IRR of c.26%. That includes some funds, all of which I have outperformed so I guess that the IRR on my equities is somewhere between 30-35%.

My professional experience is in banking; I was a restructuring banker for a large UK bank following the financial crisis and have then had a business development role in a large corporate and now work in alternative credit. I am fascinated by what drives a business forward. Given my banking background and experience I have seen a lot of failed/ under-performing businesses and have developed some thoughts regarding risk which I will outline below.

Howard Marks, founder of Oaktree, has written an excellent book on value investing - "The most important thing". The big point I have learnt from Marks is that price is a key component of risk. Given that there is always uncertainty in investing, the higher the price you pay for an asset the greater the risk you are taking. I seek to apply that insight by categorising my investments as follows:

1) Deep value. These are situations where the market cap of a company is far lower than its tangible net asset value ("TNAV"). An example of an investment in this category which worked for me was Hargreaves Services (LON:HSP) , a legacy coal mining company which had large amounts of excess land. Earnings where declining but the company was seeking residential planning permission for a large site. Even before allowing for a valuation uplift for consent, the company was at a c.30% discount to TNAV. I was able to buy in at around 160p and sell out at 330p about a year later once permission came in. It was possible to research the development proposal using public information and doing the leg work paid off.

A case which didn't work for me was BCAPII a fund which tried to buy and turnaround struggling businesses. Despite…

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