The old saying goes that when in Rome, do like the Romans do, it might just serve you well. At this point you’re probably thinking “I know that saying but so what?” Well, if you are like me, you are not one of the lucky few trotting the globe and visiting Rome all that often. Rather, you spend your every minute here in sunny South Africa enjoying the many things this great country has to offer. At this point I’ll hazard a guess that you, like me, are in a position where it seems the one thing you don’t have much of these days is disposable income. The bottom line is the South African citizen is under considerable financial pressure and it does not seem like there is much hope of things changing any time soon.

Did you know that all of us hold dual citizenship? We are not just a citizens of South Africa we are also citizens of an empire that spans the globe. We are part of the interconnected capitalist economy, or as I like to call it Capitalazia. In Capitalazia the primary medium of exchange is information and the primary driver of value is applied knowledge. Companies like Google, Facebook, Twitter, and Amazon Kindle provide striking examples of how relevant and valuable information exchange has become, but they have just taken the first steps. Further, the forthcoming revolution in 3D printing is a perfect example of applied knowledge in action and it will change the entire world as we know it. Capitalazia is every bit as alive and rich in treasures as any real undiscovered land our forefathers explored in search of wealth and opportunity.

I’ll be the first to admit that the capitalist system is fraught with many problems and challenges, but on the whole it has elevated the poor and oppressed more so than any other ideology ever. Capitalism is a system which allows people to live their dreams, empowers them, and allows for new comforts and prosperity to be created. However, to benefit and prosper in Capitalazia you have to understand the concept of economic group selection - those in the group that best apply knowledge will come out top.

So what does all of this have to do with us? The simple answer is everything! As citizens of South Africa we are all continuously growing poorer and have less and less disposable income. We have to accept that our only chance of turning our situation around is to start “doing like the Capitalazians do”. The speed of our wealth destruction depends on many factors, which includes politics, resource availability, population growth, etc., but also our inability to behave like capitalists. Therefore, to start creating wealth we have to focus on that last factor because all the other are largely exogenous we can’t do much about.

The good news is that as far as I know capitalists don’t have any secret success recipes. They simply accept full responsibility for their own financial futures. They use their brains to generate ideas. They surround themselves with other people who think like they do and exchange and refine their ideas with those people. They think long-term. Finally, they apply their ideas.

There it is. The secret is out. All you have to do is manage your emotions and follow the steps of the recipe. Step one is the hardest. If you can overcome your fears and anxieties and take this giant leap you’re on your way to becoming a successful citizen of Capitalazia. The easiest way I know to take step one is to mimic an alcoholic who joins AA. In other words, ignore your fears and reservations and join capitalist anonymous, or as I prefer to call it, an investment club. Group dynamics tell us that once you have found this group of likeminded capitalist citizenry your chances of achieving success increases dramatically as compared to a lone ranger.

Step two is to switch on your brain, start generating ideas and applying your knowledge. If this takes you back to your high school math class then relax. That kind of smart is not the only kind of smart that is rewarded in Capitalazia. You’re not expected to dream up the next iPod or invent a cure for cancer. Rather think applied knowledge in the form of Warren Buffett and Value Investing. He did not invent Value Investing, but he used healthy reasoning, logic and applied knowledge to benefit from long-term investing. Even though he never invented a cure for cancer I would say he did OK.

So where is the catch you ask? Well, to invest you need money, but now we are back to where we started and the lack of disposable income. If you think this is the major stumbling block in the entire argument then you would not be alone, but you would be wrong. Every member that has ever joined our investment club feels the same way, but not for long. Once you start thinking and studying wealth creation you naturally start participating and contributing to the group and then a strange thing happens. You pick up ideas about how to creatively find the resources you need to invest. You actively start applying your mind and either start saving or generating disposable income, which allows you to invest towards wealth creation.

Therefore, just like a gym partner helps you stay focussed and motivates you to hit the gym rather than the couch, so too your investment club will help you stay focussed. There are many benefits to joining a club. For instance, in an investment club you don’t have to do all the thinking and applying yourself. Also, people that pool their reasoning usually make far better decisions, are less emotionally volatile, and more likely to take action, than the lone rangers that keep their ideas to themselves. The bottom line is that by surrounding yourself with fellow capitalists working towards reaching the top, you will start acting more like a capitalist yourself, and this might just serve you well.

In 1984 Warren Buffett gave a speech at Columbia Business School at a seminar marking the 50th anniversary of the publication of Benjamin Graham and David Dodd’s Security Analysis. He speech, titled the Superinvestors from Graham-and-Doddsville, focussed on the extraordinary success achieved by a group of value investors. Prior to the publication of Graham and Dodd’s Security Analysis in 1934 the definition of an investor was practically equal to that of a speculator. Graham and Dodd’s work lay down an approach to investing which influenced a group of people of whom some became The Superinvestors.

Some of the greatest (first generation) value investors worked for or with Benjamin Graham. Others attended Columbia Business School, taking courses with either Graham or his successors. The second generation mentioned here, in turn, worked for or with some of the first generation. The world of value investing extends far beyond the group portrait of people here. Similarly, the styles of value investing have diverged since 1934. For instance, some value investors profiled here only invest in superior businesses that they intend to own for decades. Others are looking for damaged goods discarded by the markets, even though the assets or businesses are still worth something. Finally, there are many great value investors not mentioned here, they include the late Max Heine, manager of Mutual Shares, John Neff, Charles Royce, and many others.

Warren Buffett

Few will dispute the claim that Warren Buffett is the most illustrious investor ever. The exceptional returns he has earned for his shareholders over more than four decades speak for themselves. The ‘Oracle of Omaha’, as he is known, achieved a 21.4% compound annual per-share book value gain between 1965 and 2006. Buffett’s key approach is that as investor and businessman he looks at ownership in exactly the same way. He always focusses on the business and the management to understand intrinsic value. Ask him and he’ll say that he simply buys great companies at good prices.

Glenn Greenberg

Greenberg studied English Literature, but after an MBA at Columbia University he took a position at J.P. Morgan. Greenberg and John Shapiro founded Chieftain Capital Management in 1984. By pursuing a disciplined investment strategy, Chieftain compounded its accounts at 22.5% during the period from 1984 through 2004 versus 12.9% for the S&P 500. Chieftain maintained a highly concentrated portfolio with no more than 15 to 17 shares in its entire portfolio at all times.

Seth Klarman

He started his career as an intern at the Mutual Shares Corporation that was managed by Max Heine and Michael Price. In 1982 Seth Klarman founded the Baupost Group with an initial investment of $27 million from four wealthy and prominent Boston-based families. Today, after an astounding gross return of 20% per year and only one negative year, the group boasts assets of $24 billion and places among the top ten hedge funds both in size and long-term returns. Klarman invests in a wide array of investments ranging from fairly traditional value stocks to more esoteric investments like distressed debt, liquidations, and foreign equities or bonds.

Mario Gabelli

He graduated from Columbia Business School in 1967. After ten years on Wall Street he founded Gabelli Asset Management in 1977. Today the firm is a global investment fund that manages in excess of $30 billion in mutual funds, separate accounts for individuals and institutions, and private investment partnerships. Gabelli, who established the term and approach called Private Market Value, based on traditional Graham principals, follows a diversified approach with more than 600 shares in his GAMCO Investors portfolio.

Michael Price

He started working for Max Heine in 1975. After Heine died in 1988 Price took over Heine Securities. Price earned a reputation as an activist value investor, similar to Carl Icahn. He buys undervalued companies and then gets involved in fixing them, where he often tussles with management of companies held in his portfolios. He sold Heine Securities in 1996 to Franklin Resources and now he manages the private firm MFP Investors.

Peter Lynch

Lynch graduated from Boston College in 1965 with a degree in finance. After completing an MBA in 1968 he started working at Fidelity Investments as an investment analyst. In 1977 Lynch was named manager of the little known Magellan Fund. He managed the fund from 1977 to 1990 (when he retired), during which time the fund's assets grew from $20 million to $14 billion. More importantly, Lynch beat the S&P 500 Index benchmark in 11 of those 13 years, achieving an annual average return of 29%. He is known as a growth value investor and recognised author of a number of value investing books.

Joel Greenblatt

Greenblatt graduated from the University of Pennsylvania in 1979 and an MBA in 1980. In 1985 he started the hedge fund Gotham Capital with $7 million. Greenblatt is a value investor that buys (as he calls it) ‘cheap and good companies’ with a high earnings yield and a high return on invested capital. He keeps his portfolio very concentrated and buys at deep discounts to intrinsic value. He is also a value investor author and now Adjunct Professor at Columbia Business School.

Walter and Edwin Schloss

Walter Schloss was a well-regarded value investor, a notable disciple of the Benjamin Graham. He took class from Graham and later worked for him at Graham-Newman. He started his own limited partnership in mid-1955. He, and now his son Edwin, follow the ‘keep it simple and cheap’ approach to investing as originally defined by Bejamin Graham. Walter Schloss raked up an impressive return averaging a 15.3% compound return over the course of five decades in his fund.

Ed Lampert

After Lampert graduated from Yale in 1984 he started at Goldman Sachs. With $28 million in seed money he founded ESL Investments in 1988. Lampert's investment style can best be described as ‘concentrated value’, often focusing on the retail sector. He typically holds his investments for several years and usually has between three and fifteen stocks in his portfolio. Since starting ESL Investments he has racked up returns averaging 29% a year.

Todd Combs

Todd graduated in 1993 from Florida State University and completed a course at Columbia Business School in 2002. In 2005 he started Castle Point Capital and achieved a reported compound annual return between 2005 and 2010 of 34%. In 2010 Warren Buffett tapped Combs to (possibly) eventually replace him as chief investment officer at Berkshire Hathaway.