Kevin Murphy, Fund Manager Schroders, explains his value investing strategy. On average his fund had a yearly 4% outperformance. The fund also invests in smaller companies and has a flexible number of holdings. Murphy's strategy is not like Warren Buffett's strategy as his fund has less constraints like Berkshire Hathaway has today. The CAPE (cyclical adjusted price earnings ratio) is one of Murhpy's most favorite ratios. For the valuation of financial companies Murphy uses slightly different metrics.