How to Invest Like Peter Cundill in 2025
A super investor that became a centimillionaire from deep-value investing.
Mr Deep-Value also offers separately managed accounts for qualified investors and specialist deep-value software for those implementing directly.
If you care about buying pounds for fifty pence and sleeping soundly while you do it, you should know Peter Cundill.
He was the Canadian money manager who took Benjamin Graham’s deep-value playbook global, compounded at double-digit rates for decades, and built a small, failing mutual fund into a multi-billion-dollar franchise.
Cundill’s legend began in the early 1970s after a serendipitous encounter with John Train’s Supermoney magazine on a plane.
In chapter three, he learned about Graham, Buffett and the margin of safety, which sent him down the rabbit hole from which he never returned.
Within a couple of years he had taken control of the All Canadian Venture Fund, renamed it the Cundill Value Fund, and set out to apply Graham’s ideas wherever he could find them.
He combed through balance sheets looking for assets the market was mispricing, embraced ugly headlines, and boarded planes for whichever market had been most battered in the past year.
Over 35 years his approach produced roughly 13 percent annualised returns and grew assets from $7 million to just under $20 billion, a track record built on discipline, patience and a willingness to look wrong before he was proved right.
What follows is a practical guide to how he did it and how you can adapt the same habit of mind with modern tools today.
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His Investment Strategy
The core idea
Cundill called himself a Grahamite, but he was not dogmatic. The centre of gravity was always the balance sheet.
He wanted a large, auditable gap between price and intrinsic value, ideally supported by cash and tangible assets rather than blue-sky forecasts.
“We always look for the margin of safety in the balance sheet and then worry about the business,” he said.
Practically, that meant hunting for companies trading below book value, often near multi-year lows, with modest earnings multiples and conservative debt.
The checklist
When he took over the fund in the mid-1970s, he laid out a simple buying policy for shareholders.
Paraphrased, his preferred candidates had the following features:
Share price below book value, ideally below net working capital minus long-term debt.
Price at less than half the former high and preferably near an all-time low.
Price/earnings under 10, or below the inverse of the long bond yield.
Profitable, with a multi-year record of positive earnings and dividends.
Debt used judiciously, with room to borrow if needed.
This was his starting screen.
From there he did three valuations on every idea: current NAV from the balance sheet, a “sum-of-the-parts” look-through, and a forward NAV based on cautious assumptions three years out.
If the numbers stacked up and he could see how he might eventually get paid, he acted.
Where he looked
Cundill went where others weren’t.
Each year he’d visit the country with the worst-performing stock market over the previous 11 months, meet companies, and look for forced sellers and broken narratives.
He was happy to concentrate in a single geography if that is where the bargains were, and he was equally happy to hold cash when there weren’t enough ideas.
What he bought in practice
He was a generalist, but certain hunting grounds kept reappearing:
Net-nets and asset plays where cash, receivables and inventory (less all liabilities) covered or exceeded the market capitalisation.
Cyclical “fallen angels” where earnings had collapsed but assets and normalised economics offered a floor.
Workouts and special situations like liquidations or restructurings when he could underwrite recoveries from identifiable assets.
Case studies: what he actually owned and why it worked
Here are some documented examples that show the method in the wild.
Tiffany & Co. (1973–1979)
During the brutal 1973–74 bear market, Tiffany’s shares collapsed. Cundill bought around $8 a share when the market value fell below the company’s book value and well shy of its former peak.
As the market recovered he sold near $19, locking in a tidy profit. About a year later Avon Products acquired Tiffany at roughly $50 per share.
His board subsequently adopted a rule to mitigate the pain of “selling too soon”: take half off after a double and let the remainder run at the manager’s discretion.
The lesson was not to chase, but to systematise discipline.
Bethlehem Copper (early success)
One of his earliest wins for clients came in Canadian copper.
He bought Bethlehem Copper around $4.50 when the company had no debt and the shares traded around the value of cash on hand.
Six months later, he sold near $13 as the discount closed.
The pitch was classic Cundill: tangible assets, near-term catalysts, and a fat margin of safety.
J. Walter Thompson (JWT)
Cundill liked to pounce when good businesses were temporarily despised.
JWT, then a leading advertising agency, fell out of favour when advertising budgets tightened.
He bought when the shares were statistically cheap versus assets and depressed earnings, then rode the recovery as sentiment normalised.
The case matters because it shows he would own an excellent franchise, but only when it slipped into a deep-value bin.
Cleveland-Cliffs (cyclical asset play)
He applied the same logic to steel and iron ore.
At Cleveland-Cliffs he was buying real assets and future operating leverage at a discount during a cyclical trough.
When the cycle turned, the equity repriced sharply.
You will notice the pattern: heavy emphasis on asset backing, an insistence on a visible balance-sheet floor, and patience to wait for the turn.
Why these examples matter: they were not momentum trades.
They were reasoned purchases of mispriced assets with a plan for how value would be realised.
The numbers, price below book, near multi-year lows, low P/E, and conservative debt, were not decorative.
They were the terms on which he was prepared to take risk.
Portfolio Management
Position sizing and concentration
Cundill was pragmatic.
He could run a concentrated portfolio when the opportunity set was rich, including in a single country, but he also respected diversification because even the best investors make mistakes.
He cited Cable & Wireless as one that went wrong, a reminder that errors survive checklists.
The key was to keep the downside contained at the position level so that a few duds never threatened the whole.
He would also carry cash when bargains were scarce, letting the discipline of his screen force him to do nothing rather than reach.
In boom times that made him look cautious; in busts it let him buy with both hands.
Buy and sell rules
His board-approved sell discipline is famous: sell half after a double, then use judgement on the remainder.
He also sold when the discount to appraised value closed, when his thesis broke, or when superior opportunities appeared.
Conversely, if a position fell but the thesis and asset margin remained intact, he added.
The point was to keep behaviour mechanical where possible and analytical where necessary.
Tools he was willing to use
Although a deep-value purist, Cundill occasionally used derivatives at the index level to express negative views on obviously overvalued markets, not to speculate on single stocks.
He understood that shorting a frothy market could protect a portfolio’s purchasing power for the next wave of bargains.
Geography and on-the-ground work
He believed numbers travel, but context does not.
That is why he habitually flew to the most bombed-out market each year to kick the tyres.
Meeting management, observing culture, and feeling the mood gave him confidence to buy when the headlines screamed “don’t”.
Long-term record
The record is robust and well documented. After taking over the All Canadian Venture Fund and renaming it the Cundill Value Fund, he produced annual gains of 32 percent, 32 percent and 21 percent in the first three years.
Over 35 years the approach compounded at approximately 13.2 percent a year, while assets under management grew from about $7 million to just under $20 billion.
In 1998 Mackenzie Investments acquired his firm, he sold his remaining stake in 2006, and he retired from daily fund management in 2009, becoming Chairman Emeritus.
He died in 2011 after facing a degenerative neurological condition.
Replicating his approach today
Deep value is a discipline anchored to arithmetic and human nature.
Asset values get ignored in euphorias and over-penalised in panics. Managers cut inventories, sell divisions, pay down debt and rationalise capex.
Mean reversion is a stubborn force. Here is a practical, Cundill-style playbook you can apply today.
1) Define your hunting ground
Screen for statistical cheapness, starting with balance-sheet metrics.
Price to book under 0.8 is a good first cut.
NCAV (net current assets minus total liabilities) per share above the share price is better.
Five-year low proximity and sub-10 P/E are supportive rather than mandatory.
Exclude obvious value traps where liabilities, off-balance-sheet obligations or deteriorating competitive positions overwhelm the assets. Read the footnotes.
Modern tools: global screeners now make this trivial. You can scan all major markets for sub-book and net-net candidates in minutes, then download filings and footnotes in the same session. This is the easy part. The hard part is the next steps.
2) Do three valuation passes
Balance-sheet NAV today, hair-cutting inventories, receivables and any “soft” assets.
Sum-of-the-parts based on the likely saleable value of divisions, property and investments.
Forward NAV three years out under sober assumptions. Use scenarios. If the gap between price and the worst-case NAV is still wide, you are getting closer.
3) Search for the escape valve
Cundill wanted an “escape valve” that would allow value to surface even if the profit and loss statement did not magically recover.
Think inventory liquidation, saleable subsidiaries, marketable securities or redundant property.
If a company can shrink to prosperity, or at least to solvency, your downside is smaller.
4) Demand conservative financing
Deep value with weak balance sheets is not deep value.
Check coverage ratios, debt maturities and covenants. Prefer self-help stories with room to borrow if needed, not those forced to borrow to survive.
5) Look where others will not
Make a habit of reviewing the worst-performing markets and sectors each year.
It is where forced sellers, redemptions and career risk live, which is precisely why prices sometimes break free of reality.
If you cannot travel, you can still replicate the spirit by spending more time in the least popular corners of your stock screener.
6) Build positions with intention
Size ideas in proportion to tangible downside protection and time to catalyst.
Where asset backing is overwhelming and liquidity is decent, you can be bolder.
Where the margin is thinner, keep it smaller and diversify the type of risk across industries and geographies.
Expect to hold several names; expect a few to disappoint. The goal is a portfolio return driven by several doubles, not perfection.
7) Codify your sell rules
Consider adopting a version of the “sell half on a double” policy.
It disarms the most dangerous emotion in value investing, which is the urge to snatch at early profits.
Also sell when discounts to appraised value close, when better bargains emerge, or when your thesis breaks.
Write the rules down before you buy.
8) Be patient and keep a journal
Cundill kept a daily diary for decades, using it to examine assumptions and avoid stubbornness masquerading as patience.
Do the same. Review your cases quarterly. If the facts change, change your mind. If they do not, sit tight.
9) Use modern data without losing the plot
APIs, filings databases and translation tools make global deep-value investing radically easier today than in the 1970s.
The edge is no longer finding numbers.
The edge is in interpreting them calmly, trusting the balance sheet, and waiting for the market to agree on your timeline, not its own.
Putting it all together: a simple plan
Run a global screen each month for sub-book and net-net candidates. Keep a watchlist of 30 to 50 names across at least five markets.
Do quick triage on each candidate using a one-page template: balance-sheet quality, off-balance-sheet obligations, insider alignment, and plausible escape valves.
Promote the top 10 to full write-ups with three valuations and a short narrative on how value may surface.
Start small and scale in. Aim for 15 to 25 holdings across sectors and countries, with larger weights in the fattest discounts to hard assets.
Pre-commit your exits. Write down a target range where the discount closes and what would make you sell early. Include a version of the half-on-a-double rule.
Review quarterly. If discounts narrow, lighten. If they widen for non-thesis reasons, add. If management destroys value or the balance sheet deteriorates, leave.
Hold cash unapologetically when you cannot find enough. Your future self will thank you when markets panic.
Closing thoughts
Peter Cundill proved that a patient, balance-sheet-first approach scales across borders and cycles. He was not clairvoyant.
He was prepared. He read widely, travelled to unpleasant places, did unglamorous arithmetic, and waited. The compounding took care of itself.
You do not need to be a genius to follow his path. You need rules, curiosity and the temperament to look wrong for a while.
Start with one market, one screen, and one careful write-up.
Buy only when the assets protect you and the price offers a margin of safety you can explain to a sceptical friend in two minutes. Keep going.
As Cundill liked to remind himself in his diary, there is always something to do.
Subscribe for actionable case-studies, research and insights on deep-value stocks.
Mr Deep-Value also offers separately managed accounts for accredited investors and specialist deep-value software for those implementing directly.