‘Investing With Keynes’ Review: Cambridge Values

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In this frenzied moment of limitless stimulus and GameStop fever, the notion of value investing seems almost quaint. Why waste your time bargain hunting for good companies at good prices, and then wait decades for your returns to compound, when there’s a snappy little ETF right there waiting to catapult you to riches in months?

John Maynard Keynes is best remembered as an economist who made the case for governments to spend their way out of recessions. But as an investor, he was a kind of proto-Warren Buffett, a diligent savant who could crunch the numbers, discern the qualitative aspects of a toothsome investment and remain unflustered by the churn of the markets.

As a young man at Cambridge University in the first decade of the 20th century, he was a committed aesthete and sensualist with a contempt for money-making. But as he grew older, Justyn Walsh writes in “Investing With Keynes,” he came to see the value of money as a “means of securing the conditions for a well-lived life.” Keynes amassed fortunes for himself and King’s College, Cambridge, which he served for many years as bursar.

When Keynes died in 1946, his net assets totaled some $30 million in today’s money. While his books had sold well, he had made the bulk of his fortune by investing smartly, often from his bed in the mornings after digesting the news. During his 25 years running the King’s College endowment, he generated an annual return of 16%, adapting his investment style to flourish even during the Great Depression and World War II.

Mr. Walsh, a former investment banker and the chief executive of an asset-management firm, explains how. Keynes lived an extraordinary and vivid life. A precocious boy and student, he joined the civil service after Cambridge. He attended the Paris Peace Conference after World War I as an economic adviser with the British delegation. He was appalled by the terms imposed on the defeated countries of Europe and accurately predicted a “final civil war between the forces of reaction and the despairing convulsions of revolution, before which the horrors of the late German war will fade into nothing.”