The Manual of Ideas has a copy of Empirical Finance Research’s paper “Fundamental Value Investors: Characteristics and Performance” (.pdf). The paper examines the investment methods of professional value investors (defined as the members of the valueinvestorsclub.com) and concludes that value investing is a broad church encompassing many different styles, but predominantly consists of “Warren Buffett-style growth investors:”
We find that investors are overwhelmingly concerned with assessing intrinsic value. Discounted cash flow models, earnings multiples, GARP, and other similar valuation techniques are overwhelmingly used (87.50% include this analysis in their recommendation). Based on these results, professional value investors tend to be Warren Buffett-style growth investors…
The paper seems to quantitatively confirm our qualitative (read, baseless) assertion in the About Greenbackd page that “assets are a contrarian measure of value.” Less than a quarter of professional value investors incorporate the value of tangible assets in their investment decisions:
[A]pproximately 24% of value investors do incorporate the classic value technique of focusing on tangible asset undervaluation. The other favorite tools of value investors are open market repurchases (12.12%), the presence of net operating loss assets (5.29%), restructuring and spin-off situations (5.12%), and insider trading activity (4.70%).
The paper also indirectly tackles the question oft posed by commenters on this site which, incidentally, questions the very raison d’etre of Greenbackd: why opportunities to invest below liquidation value and alongside activist investors persist even after the filing of the 13D notice:
According to efficient market logic (Fama (1970)), the rational arbitrager should act alone, drive the price to the fundamental level, and reap all the rewards of the arbitrage he has found. Unfortunately, arbitragers find this difficult in practice. Two primary reasons for this are capital constraints and the limits to arbitrage arising from the realities in the investment management business (Shleifer and Vishny (1997)).
The paper is typical of Empirical Finance Research’s rigorous approach and well worth the effort.
Greenbackd 
[…] liquidation value investing or low price-to-book value investing – is counterintuitive even to practitioners within the value school, who predominantly seek Buffett-style earnings and growth. The counterintuitive element is that […]
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what has been Grenenbackd’s performance record?
Thanks,
Jamie
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Jamie
You can see the results of the last time we undertook the exercise here. We’re going to do it again in July.
G
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