#61 - Mr Common Sense - Rich Pzena on how to build an $80bn deep value firm, survive 60% underperformance and buy stocks on under 10x normalised earnings.

Rich Pzena, founder of $80bn AUM Pzena Investment Management, explains his value investing philosophy and how he built a deep value franchise by buying good businesses when they are deeply out of favour. He talks through recreating Benjamin Graham’s net net research at Wharton, leaving a secure role at Bernstein to start his own firm, surviving ten quarters of brutal underperformance in the dot com bubble and how he nearly sold out but was persuaded to continue by Joel Greenblatt. Rich explains his clear framework for what makes a good business, how to judge if problems are temporary, and why most investors systematically misprice uncertainty and cyclicality. He thinks deep value investing is just commonsense.