Tweedy Browne's John Spears and Jay Hill on value investing and insider buying | S08 E17

Deep value investing relies on identifying companies trading at significant discounts to private market value, a process refined by Tweedy, Browne’s John Spears and Jay Hill. Their approach utilizes a two-part test: evaluating stocks against comparable M&A transaction multiples and assessing absolute valuation metrics. The firm’s "COPY" ETF strategy further enhances this by filtering for material, free-will insider buying, which serves as a high-conviction signal of intrinsic value. Despite the prolonged outperformance of market cap-weighted indices and growth-oriented tech stocks, significant opportunities persist in international small and mid-cap markets, particularly in the UK. These undervalued sectors, often shunned by current market flows, offer attractive owner earnings yields and potential for mean reversion, demonstrating that disciplined, data-driven stock selection remains a viable, albeit challenging, path to long-term outperformance.