Tony Kynaston from the QAV Podcast
Quality at Value
Tony Kynaston started investing in the stock market 30 years ago and developed a simple checklist methodology (by studying people like Warren Buffett) that allowed him to retire from his corporate career at age 43 and become a professional investor. And he’s done pretty well since then. The average return on his portfolio over the last 20 years has been 19.5% per annum – double the ASX index.
QAV stands for QUALITY AT VALUE. Tony's approach is to use a checklist to find companies that are performing well (quality) but which can also be bought at a discount (value). It's basically what is usually called "value investing".
Tony joined me on Shares for Beginners to give an overview of his methodology. He has a checklist that helps him determine what shares he will invest. It's all based on publicly available knowledge from company data and on-line tools like Yahoo finance, with a little bit of help from a couple of subscription services.
Tony started investing in shares with a bunch of mates and no clear strategy for making money. It wasn't until he read Buffett - The Making of an American Capitalist that the penny dropped. He combined Buffett's valuation methodology with another book - The Checklist Manifesto which was written by a doctor who noticed that airline safety depended on pilots having a checklist which was strictly adhered to before any flight took off.
This is the basis of the QAV philosophy - a checklist and a clear-eyed view of the numbers that matter in valuing a share.
We talked about:
- Going to a Berkshire Hathaway AGM in Omaha, Nebraska (pop: 467k)
- Newspaper throwing competitions between Bill gates and Warren Buffett
- How Jamie Lee Curtis convinced Charlie Munger to buy tech stocks
- The first and most important number - the net operating cash flow
- What is reporting season
- Is value investing dead?
Tony is a great guy and I hope you learn as much as I did in this interview
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Shares for Beginners is for information and educational purposes only. It isn’t financial advice, and you shouldn’t buy or sell any investments based on what you’ve heard here. Any opinion or commentary is the view of the speaker only not Shares for Beginners. This podcast doesn’t replace professional advice regarding your personal financial needs, circumstances or current situation.