Guy Spier Op-Ed: "The Golden Age of Value Investing Is Over"

[charlieruane]

Check out Spier's new Bloomberg op-ed here. Thoughts?

 

According to this piece, Spier thinks his only edge as a value investor is the quality and depth of his research. LLMs, he argues, have obliterated that edge. 

 

I think reducing the edge of value investing to research is crazy! Our edge is equally, if not more so, rooted in identifying and taming the wilder sides of human psychology. LLMs certainly haven't changed human nature—just look at the crypto treasury companies. If investors can still become so irrationally exuberant, they will someday become equally delusional in the opposite direction. 

 

It doesn't take original scuttlebutt to know you should buy the S&P 500 when the Shiller PE is under 13. That's still value investing, and that opportunity will emerge again in time, LLMs or not. Sure, maybe the golden age is over... but wasn't the real golden age, like, the mid-20th century? 

[Milu]

3 minutes ago, charlieruane said:

Check out Spier's new Bloomberg op-ed here. Thoughts?

 

According to this piece, Spier thinks his only edge as a value investor is the quality and depth of his research. LLMs, he argues, have obliterated that edge. 

 

I think reducing the edge of value investing to research is crazy! Our edge is equally, if not more so, rooted in identifying and taming the wilder sides of human psychology. LLMs certainly haven't changed human nature—just look at the crypto treasury companies. If investors can still become so irrationally exuberant, they will someday become equally delusional in the opposite direction. 

 

It doesn't take original scuttlebutt to know you should buy the S&P 500 when the Shiller PE is under 13. That's still value investing, and that opportunity will emerge again in time, LLMs or not. Sure, maybe the golden age is over... but wasn't the real golden age, like, the mid-20th century? 

I think he is right with a lot of this and have felt this way for at least 5 years. Even before LLMs came out the level of number crunching going on of fundamental data (profits, cash flows, margins etc) was so thorough that no edge was going to be available to a human trawling through that same information. Factor based funds likely would eliminate any edge with net nets, low pe stocks etc. The only edge these days is either the time arbitrage that guy mentions or focusing on qualitative factors such as the vision and execution ability of the CEO and the culture of innovation. Basically buy good innovative companies who can pivot well in this fast changing world, and when you buy them hold them for decades through the ups and downs. 

[Malmqky]

I don't necessarily disagree, but it just takes a 50% crash/recession for everyone to start thinking/acting irrationally. Another "lost decade" scenario could play out and who knows, maybe value investing outperforms during that time period. 

[giulio]

9% cagr for Acquamarine fund since inception. I think Guy Spier is Brilliant at networking, his letters are an interesting read (edited by william green), but his performance tells you something. I agree with you @charlieruane, temperament and character are an edge. Also, I don't believe AI can connect the dots and produce the kind of insights that a human can. Deep research, scuttlebutt, should provide an investor with insights not publicly available and forward looking, I.e. not reflected in today's numbers.

Great discussion for sure, but I am inclined to listen to more successful investors than Spier.

[dwy000]

Doesn't Spier claim this every four or five years (esp when he underperforms)?  Or maybe I'm thinking of someone else.

 

The true value investing ala Walter Schloss and Ben Graham hasn't really been possible since the K's and Q's got put online and you could screen 1000s of companies at once. But as per Munger, all smart investing is value investing - its just a matter of what you deem "value".

[SharperDingaan]

It has been 50+ years since the 1960's; 'value investing' methodology/approach has just evolved with the times. Back in the day the focus was much more on just getting the data/simple analytics, and much less on applied use of the findings. You did well because it was simple to do, but hard to execute; so not many competitors. Different thing today when we can teach data extraction/use of formula to a monkey ... the applied stuff not so much!

 

If all you can do is get/crunch numbers, to spit out content/graphics ... you add minimal value, as AI can do it a lot faster, cheaper, and more reliably than you can. Your value is in using AI to do the grunt work, applying findings via client story telling pitches (people skills), and/or coding decision algorithms into autonomous bots (creativity) that trade for you - 24/7. Do well ... and you work only for you, not someone else.

 

Same approach, just executed very differently.

 

SD

 

   

[Munger_Disciple]

I think value investing in the US market perhaps doesn't work as well as it used to, say 20 years ago. There is way too much competition here in the US with every Tom, Dick & Harry obsessed with investing (no one here wants a "real" job any more); hence the edge is being competed away. Besides with the market endlessly picked over by both public & private fund managers and due to the effect of technology upending many "old guard" businesses, there are now way more value traps than real values. I agree with the comment that human emotions like greed and fear will always be with us but that doesn't necessarily mean that it hasn't become exceedingly difficult to beat the market index over the long haul. Even Berkshire roughly matched the index over the last 20+ years. However I disagree with Spier in that I don't think AI & LLMs have got anything do with it. They are simply tools which everyone will have just like Excel. They can't replace thinking & judgment. 

 

Charlie Munger used to say you have got to fish where the fish are. I think the fish are mainly outside the US these days. 

Edited September 19, 2025 by Munger_Disciple

[Kuhndan]

He has significantly underperformed the S & P 500 in 10 out of the last 11 years. Not sure he ever had an edge. Most likely luck.

[Dalal.Holdings]

I’m sorry, but what “Golden Age” is Spier referring to exactly? He and his promotional value bro cohort (Pabrai, Tilson, etc) have underperformed consistently the entire last decade and more.

If there was a Golden Age, Spier was never part of it.

[gfp]

1 hour ago, Kuhndan said:

He has significantly underperformed the S & P 500 in 10 out of the last 11 years. Not sure he ever had an edge. Most likely luck.

 

Dana!  Hope you are well.  I wonder what his results were before fees.  I feel like a lot of his underperformance is just the fact that all these guys charge so damn much.  I've returned 17% for a quarter century but I don't charge 25% of the freaking profits...  

[Eldad]

I still find things that are obliviously not being looked at correctly by the market. Also, every time I try to tinker with LLMs I get nothing but very deceptive garbage. But that’s just me. 

Edited September 19, 2025 by Eldad

[skanjete]

His reasoning doesn’t seem correct to me. It is true that methods are changing and that information is now much more easily accessible. However, the edge in value investing does not come from having information, but from what you do with it. The edge comes from the thinking you apply to that information.

 

What he describes in his article is the same as claiming that the era of courier services in the West was over when train tracks were built and mail could be transported not by horse and carriage anymore, but by train.

[whiskybravo]

12 hours ago, Milu said:

I think he is right with a lot of this and have felt this way for at least 5 years. Even before LLMs came out the level of number crunching going on of fundamental data (profits, cash flows, margins etc) was so thorough that no edge was going to be available to a human trawling through that same information. Factor based funds likely would eliminate any edge with net nets, low pe stocks etc. The only edge these days is either the time arbitrage that guy mentions or focusing on qualitative factors such as the vision and execution ability of the CEO and the culture of innovation. Basically buy good innovative companies who can pivot well in this fast changing world, and when you buy them hold them for decades through the ups and downs. 

Agree time arbitrage works wonders, especially combined with companies that will likely make good returns on investment over time AND are run by honest, competent people.  Ideally in small companies whose market cap you could realistically expect to grow many fold over time.  And concentrate on your best ideas.  I haven’t always adhered to that.  When I have though the returns have been great.  When I haven’t mediocre.

[no_free_lunch]

All I know is investing is still very difficult.  The performance of the indices is still very difficult to match given how concentrated returns can be.    

[Castanza]

Individuals like Spier are simply unwilling to adapt. His view of value investing is stuck in a box. Value is what you find, not how you find it...

 

23 minutes ago, no_free_lunch said:

All I know is investing is still very difficult.  The performance of the indices is still very difficult to match given how concentrated returns can be.    

 

This will probably become more and more true as we globalize even more (although it looks like we are taking a break). Big reason I keep most of my funds in index funds and then move them to individual positions as I find value. 

 

9 hours ago, Eldad said:

I still find things that are obliviously not being looked at correctly by the market. Also, every time I try to tinker with LLMs I get nothing but very deceptive garbage. But that’s just me. 

 

Agree with this.. LLMs will remove the account skill barrier to investing imo. But the difficult part has always been managements decision making, market trends, consumer trends and all the human psychology that goes along with it. I'm not sure if that moves value investing closer to gambling or skill.....

[Luke]

56 minutes ago, Castanza said:

Individuals like Spier are simply unwilling to adapt. His view of value investing is stuck in a box. Value is what you find, not how you find it...

 

 

This will probably become more and more true as we globalize even more (although it looks like we are taking a break). Big reason I keep most of my funds in index funds and then move them to individual positions as I find value. 

 

 

Agree with this.. LLMs will remove the account skill barrier to investing imo. But the difficult part has always been managements decision making, market trends, consumer trends and all the human psychology that goes along with it. I'm not sure if that moves value investing closer to gambling or skill.....

There are still PLENTY of paper hands if i look at family and friends :)))

[Libs]

Spier is off-base.

 

It's 90% about insight and temperament. 10% crunching numbers. I'm living proof of that, I've got Mick Jagger's level skills analyzing a balance sheet. But even I have beaten the indexes for 25 years. Sure, you could beat the game by having better access to financial information, pre - internet. But just because that approach is gone doesn't mean it's game over.

 

Look at the LULU thread. A great discussion. In the end it's going to come down to insight and judgement. 

[villainx]

4 hours ago, Castanza said:

Individuals like Spier are simply unwilling to adapt. His view of value investing is stuck in a box.

 

He just moved on to the next phase of supposed legend investors, complaining.  Maybe folks here complain too, but not publicly, and I assume everyone is still grinding.

 

 

[Munger_Disciple]

17 hours ago, gfp said:

I wonder what his results were before fees.  I feel like a lot of his underperformance is just the fact that all these guys charge so damn much.  I've returned 17% for a quarter century but I don't charge 25% of the freaking profits...  

 

Wow! That's very impressive!! Is that 17% an IRR number? And is it the return for just publicly traded stocks or does it also include (private) real estate investments?

Edited September 19, 2025 by Munger_Disciple

[scorpioncapital]

"People used to ask, “What’s your edge?”, but there is no edge anymore. At least, none that is obvious to me."

 

Why I would think he should know best about this. Being resident in Switzerland with no capital gains tax, that is an edge right there. It's funny, even with no taxes he still has done rather mediocre.

 

I have seen tons of inefficiency in markets. Why just a few days ago this stock SNPS dropped 38%. Then it rebounded 28%. It was clearly cheap imho and it was available for all to purchase. He is talking about 'value investing' or cheap stocks that are often value traps. But these were never really value investing! I think he actually has the wrong idea about value investing and then claims it is dead. Buffett is a little wiser when he said that growth is a very important part of value. Buying a melting ice cube at 6x fcf and being frustrated for a decade or two with low performance and then you scratch your head and blame AI? I'm not even sure AI wouldn't have kindly suggested to the prompter that this was not value! 

[CorpRaider]

He should check out the best performing SPY stocks YTD.  There are like 20 formerly el cheapo value stocks.

Edited September 19, 2025 by CorpRaider

[gfp]

2 hours ago, Munger_Disciple said:

 

Wow! That's very impressive!! Is that 17% an IRR number? And is it the return for just publicly traded stocks or does it also include (private) real estate investments?

 

It's just the Interactive Brokers "all accounts," "since inception", set to "annualized".  17 is the time weighted rate of return.  Money weighted is higher because the last 5 years have been the best and there is a lot more money for the later periods.  It includes all accounts I manage through IB, some using leverage, some IRAs or no leverage taxable accounts.  It doesn't include around $7 million I manage at Fidelity for other people, which uses no leverage and has a shorter "since inception" period - since 2007.  But IB is where most of the assets are.

 

Doesn't include any real estate that we develop / own directly.  I wouldn't even know how to calculate the return on that stuff but it's very high and very tax efficient.  The IB since inception results include stocks, bonds, derivatives, long term positions and short term trading.  Does not include any fees.  I mostly manage the money that isn't mine for free but I charge a few of the wealthiest folks a few bps to keep the lights on.

[tnathan]

He's totally wrong, its about judgement and truly understanding businesses and their moats better than other investors who can't / won't know everything from an LLM that only knows past info. Investing is about the future. Look at how many software names are trading near 52 w lows -- if you have good insight that a specific vendor has great lock in and wont be displaced by AI vibe code yada yada, you can probably make a killing. 

[villainx]

There's a reason why there's threads called What are you buying? and What are you selling? and no Why LLM has taken away my ability to buy and sell?

 

 

[Munger_Disciple]

39 minutes ago, gfp said:

 

It's just the Interactive Brokers "all accounts," "since inception", set to "annualized".  17 is the time weighted rate of return.  Money weighted is higher because the last 5 years have been the best and there is a lot more money for the later periods.  It includes all accounts I manage through IB, some using leverage, some IRAs or no leverage taxable accounts.  It doesn't include around $7 million I manage at Fidelity for other people, which uses no leverage and has a shorter "since inception" period - since 2007.  But IB is where most of the assets are.

 

Doesn't include any real estate that we develop / own directly.  I wouldn't even know how to calculate the return on that stuff but it's very high and very tax efficient.  The IB since inception results include stocks, bonds, derivatives, long term positions and short term trading.  Does not include any fees.  I mostly manage the money that isn't mine for free but I charge a few of the wealthiest folks a few bps to keep the lights on.

 

That's outstanding! Your investors are very lucky folks indeed.

Edited September 19, 2025 by Munger_Disciple