Buy when there's blood in the streets. Tweedy, Browne Global Value Fund did that this spring when Thailand was erupting in violent protests. The fund picked up $31 million of very cheap shares in Bangkok Bank Public. William Browne, comanager of this $4 billion mutual fund, explains the thinking: In Thailand coups come and coups go, but when the dust settles the ownership of capital is pretty well preserved.  If you want to be a value investor--one buying out-of-favor companies--you have to hold your nose and be willing to hold it for a long time. Buy enough stocks cheaply enough and the odds favor you, even if some of the stocks turn out to be disasters. The 104-stock collection at Global Value ranges from obscure Japanese outfits trading for less than the value of their current assets to giant drug companies priced as if patent medicines were going out of style.  This investing recipe works. In the 17 years since it opened its doors, the fund has averaged a 9.7% annual return, five percentage points better than the return on the MSCI Europe, Australia and Far East index. Browne, son of an early partner in the money manager, runs Tweedy's $11 billion in assets with three other value hunters: John Spears, Robert Wyckoff Jr. and Thomas Shrager. These chefs eat their own entrées. Together with retirees and other employees, they and their families have $590 million at the firm.  Tweedy, Browne's Global Value Stocks  Beat the market by five points for a few years and you may just be enjoying a lucky streak. Do that for a sixth of a century and you're probably earning your keep as a money manager (something that few do; see story, "The Way to Win on Wall Street Now"). That return figure is after the no-load fund's expense burden of 1.4% (about average for an actively managed international portfolio).  Tweedy, Browne, a Manhattan firm majority-owned by the publicly traded Affiliated Managers Group ( AMG - news - people ), is a sleepy place. Global Value's managers have an average age of 59 and an average tenure of a quarter century. The global fund has an aberrantly low turnover (12% a year), which helps keep costs and taxes down for investors.  It has always been like this. Tweedy started out 90 years ago as a dealer in inactive securities--stocks that trade once a month. In time it developed a specialty managing portfolios of value stocks, a lot of them obscure. What, exactly, is value? Benjamin Graham (1894-1976), whose most famous disciple is Warren Buffett, defined it this way: a company trading at less than net current assets (current assets minus all liabilities). You buy cash and inventory at a discount and pick up any real estate or going concern value for free.  Here's a net current play that Global Value owns: Daiwa Industries, a Japanese vendor of refrigeration equipment trading at 4.3 times earnings and at an 18% discount to the cash it has sitting around. John Spears figures Daiwa could sell out for four times the recent share price. Japan being a country without any admiration for hostile takeovers, the insiders are under no pressure to give up control. Patience is needed.  Screaming bargains like Daiwa are hard to come by. So the money men at Tweedy have, just like Warren Buffett, expanded the definition of value beyond Graham's narrow parameters. Value, as they see it, sometimes comes from such intangibles as drug patents and pricing power. Other things being equal, you want a company whose market is not easily invaded by competitors. Buffett calls them companies with "moats" around them.  That explains how Tweedy got attracted to Coke bottlers in warm climates. Browne explains: "You have a business with growing demand and a high return on capital that's tough to kick out of the market." How so? The bottler supplies bodegas with free refrigerators on condition that no competitor's products go in it. "Usually there's not enough room for two coolers," Browne says.
Skip breakneck China and Brazil, say the money men at Tweedy, Browne. Look for slow-moving companies in Europe and Japan.