Thanks to John Bethel in his Controlled Greed blog for pointing me to this interview with Tim McElvaine (pdf).

Tim McElvaine made a name for himself in value investing circles by being Peter Cundill’s, a well known Canadian value investor’s, top associate for a number of years. Tim set up his own firm McElvaine Investment Management on the side in the 1990s and eventually left to run it full time.

His quarterly newsletters are also worth a read.

The interview is really insightful and explains value investing in an easy to understand way. If you do only half of what Tim explains in the interview you will be a very successful investor.

Its hard to argue with a 20% annualized return (16 percent net to investors) for the ten years until December 31, 2007 while sometimes holding up to 59% cash. Similarly to most value investors 2008 was a disaster year for Tim with -48%.

Really the whole interview it is worth it.