The last 18 months including the 3rd quarter of 2019 reflect one of the most disastrous periods for value investing globally. Even worse, the last 1.5 years have now extended a decade of significant and probably most sustained value underperformance versus all other segments of the market. During this decade, we observed that a few “exceptions” (once in a life-time success stories) have emerged out of the sea and investors have been able to capitalize on them with great consistency. These best investments have not been hidden or small gems, but rather reflect and developed to the biggest fish in the pond – the Moby-Dicks of stocks. FAANGs were in plain sight with great business models, coupled with great expectations which in hindsight have been surpassed over and over again to the upside. Now, the prudent investor should not fall into the trap that these exceptions are now to be found everywhere and that now an onslaught of companies will continue to become those exceptions again.

We don’t believe in fairytales and we don’t believe that the best investments are those that everyone knows to be the best and most promising. Investing would become astonishingly easy and everyone could do it. Successful growth stories and companies which beat enormous expectations year after year for a decade are not the rule and we need to continue to look in places where few people dare to look.

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