With Frederik Vanhaverbeke, Bond Portfolio Manager at KBC Asset Management, Author of Excess Returns: A comparative study of the methods of the world’s greatest investors
Frederik Vanhaverbeke has parlayed his analytical smarts into developing his own technique on how to beat the market. He’s not your typical MBA that’s now in the world of finance. Instead, he holds a PhD in electrical engineering in 2005. Over the past decade, Frederik has built considerable expertise in the areas of stock investing, company analysis, accounting, etc., through the reading of hundreds of books, articles, shareholders’ letters, etc. in his free time. And his thorough knowledge of best practices in the field of investing has helped him beat the market by a substantial margin over the past ten years. Currently, he is employed as a bond portfolio manager at KBC Asset Management in Belgium.
In his book Excess Returns, Vanhaverbeke analyses the investment approach of the world’s top investors (Warren Buffett, Benjamin Graham, Anthony Bolton, Peter Lynch, Charles Munger, Joel Greenblatt, Seth Klarman, David Einhorn, Daniel Loeb, Lou Simpson, Prem Watsa and many more) and shows how to achieve market-beating returns.
In conversation with Steve, he candidly shares his current thoughts on the market. He believes stocks in the U.S. are expensive with high valuation multiples, as they are but to a lesser extent in Europe. As a result, he’s increased the cash weighting in his portfolio and advises investors to sit still and wait for opportunities to come along. Reflecting on stock market selloffs in emerging markets in 2015, he believes we are at the beginning of a really serious crisis in emerging markets that could be triggered by a conclusive slowdown in China’s economy. On the prospect of rising interest rates in the U.S., he sees positives and negatives.
To beat the market, he looks at investments in companies such as Berkshire Hathaway. He also likes to put his money where other smart investors are going. He also recommends Index Funds for people that do not have the analytical skills or the time to study the market and pick companies, but suggest Index Fund investors understand the market so they don’t go in at the top.