Tweedy, Browne: “Volatility is the Friend of the Value Investor”

The Tweedy, Browne Global Value Fund (TBGVX) has had an exceptional track record, outperforming its benchmark and peer-group average by over 300 basis points annually since its inception 25 years ago through December 31, 2018. It is an $8.3 billion international equity fund that currently invests approximately 90% of its invested assets outside the U.S.

I interviewed the members of Tweedy, Browne’s investment committee: Will Browne, John Spears, Tom Shrager, Bob Wyckoff, Roger de Bree, Frank Hawrylak, and Jay Hill.

The interview took place on February 5 at Tweedy, Browne’s offices in Stamford, CT.

What is Tweedy, Browne's philosophy and approach to value investing?

Will Browne: The essence of what we do comes from what some people refer to as Benjamin Graham's big idea. Our focus is on determining the value of a business. That is a relatively objective exercise. It's ascertainable within a reasonable range. The share of stock is nothing more than a fractional interest in the business.

If you can get comfortable with the valuation of the business, then you look to the marketplace and see at what price that business is changing hands. We don't subscribe to the idea that market price is the efficient price. It is the result of all sorts of people bringing all sorts of factors to the marketplace to trade those securities. Our investment philosophy gives us an anchor and a framework to think about what we want to do with regard to our investments.

That is the essence. I don't believe that it differs entirely or to a great extent from a number of other people who employ or speak about this approach.