The Education of a Value Investor Summary Explained

Author: Guy Spier

The Education of a Value Investor (2014) is a book about Guy Spier’s transformative journey from being a profitable yet unhappy hedge funder to a value investor. This book will teach you how to establish a long-lasting and satisfying career without compromising your ethics.
the education of a value investor

Discussion of The Education of a Value Investor Summary

The Education of a Value Investor takes us on the journey that transformed the thinking, business, and lifestyle of one of the most successful people in the world of finance: Guy Spier.

He shares how he went from being unhappy in a job he loathed yet earned a lot from to becoming someone who values his clients, and colleagues who have incredible relationships in his field and is exceptionally happy while earning well.

In this book, you will learn about the importance of perspective and personal ethics. If your dream is to make a successful career that is not only based on short-term profits but has meaning and value, keep on reading!

The Education of a Value Investor Summary Key Points

What should be an utmost importance for a value investor? For a value investor, it is obligatory that he/she must have the ability to understand valuations. Additionally, for an investor, it is best to set their own investment strategy rather than steal from someone else.

This way, their mind will open to the fullest and it increases their potential for critical thinking. Besides, investors should also leave some room for errors and mistakes because without mistakes they will not learn. The following key points are great for understanding the various tactics based on investor ethics. How one can adopt them to become a successful investor.

You might also like to read The Promise of a Pencil Summary.

Financial Careers are Lucrative but are they Always Ethical?

Guy Spier received his education from Oxford University and became a prominent personality in the world of finance. He was one of the top hedge funders on wall street who managed hedge funds in a way that generated a lot of money.

He was ambitious and successful but was he happy? In his own words, he excelled at his job but he was extremely unhappy. He loathed the environment he worked in and felt extremely dissatisfied. He labels himself in this phase of his life as an ‘inauthentic person”

So what changed? Well, a 650,100 dollar lunch with a philanthropist named Warren Buffet did the job. Spier walked out of that restaurant as a changed man who was ready to redefine and reshape his work for his fulfillment.

 Jobs in the financial fields earn a lot of money but usually, people have to compromise their ethics to get to the top. You want to earn the most profit and sometimes that means choosing the least profitable opinion for the opposing party even when you know in your gut that what you are doing is wrong.

Is Elite Education Worth it?

We all want to study in top-notch schools and colleges. Getting into Harvard, Stanford, or any Ivy League college would be a dream come true. But Spier puts forward a question in front of his readers. Is it worth it? Yes, you may receive the best theoretical education and get taught by the world’s most genius people.

But do these teachings apply to the real world? Spier does not say that these colleges and schools do not teach technical skills. They do. But most of these skills do not make the students aware of the ever-changing world. They are not practical when the student goes into real life.

Economic models and theories apply when there is sufficient information at hand, but in real life do you always have sufficient information or sufficient time to know everything before you move on to finding a solution? No. Instead of teaching rationality these schools need to take a newer approach that is of developing critical thinking.

 Instead of teaching the students to think right, teaching them to think hard will help. Critical thinking does not require learned answers. When you teach these students how to tackle a problem from different angles and they go into the real world, they will be able to think about any problem they are faced with instead of sticking to the solutions they are taught.

Many Jobs will Challenge your Moral Compass

You get a job in a high-tech company that offers the best opportunities for growth, a fair salary, and health insurance. You’ll be extremely happy. Let us suppose that once you start working, you find out that they use immoral and unethical ways to increase their profit.

For example, not explaining to their client a much more profitable option for them because the company can earn more from the option they are choosing. So they choose to not disclose that opportunity and keep the customer in dark or they exploit their clients by being aggressive so they feel pressured to make the decision suggested by the company.

In such a situation, you may not be directly exploiting anyone but your compass will be ticking because you know you are earning by working in an unfair company. Now you have two choices either stretch your morals to accommodate what is happening or know your principles and leave.

Consider the Long Term Impact rather than the Short Term Earnings

When you change your focus in the long term you will start doing much better and eventually, you will feel satisfied and happy. To make a career that has an impact and is beneficial in a long term you will need to let go of short-sightedness.

Yes maybe you will earn more by being dishonest with this client and the profit you will earn will be huge. But will this client return to you in the next few years? The chances are that sooner or later they will find someone better and you will not be hearing from them.

 Think of how you carry out your job. Is it only beneficial now or are you doing everything in a way that will be beneficial even after ten years? Making important relationships, expressing gratitude, and treating people around you in your field can benefit you in more ways than you can think of right now. So choose what will be important in the long run.

The Education of a Value Investor Quotes

“We like to think that we change our environment, but the truth is that it changes us.” –Guy Spier

“People will always stop you from doing the right thing if it’s unconventional.” –Guy Spier

The Education of a Value Investor Summary Review

The Education of a Value Investor is a powerful book that can change your perspective about the way you perceive your career. Making short-term and money-making decisions may be tempting but they are not satisfying and profitable in a long run. The book is a journey of a guy who transformed himself from a greedy money-making hedge funder to a profitable investor. It is a good read for those who are looking for advice on making the right decisions for their careers.

To Whom I Would Recommend The Education of a Value Investor Summary

  • To any client who is looking to invest a huge sum of money but cannot choose an investor.
  • The twenty-six-year-old is stuck in a lucrative yet morally exploiting job.
  • And to anyone who wants to learn to forge their path in fields related to finance, economics, business, and trading.