Valuation Discipline – Focus on Fundamentals, Not Sentiment

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  • Value Insights

Over the last couple of decades, instantaneous data and company reporting have become a commodity in the financial industry. For that reason, one ought to assume that stocks should be priced more efficiently and that superior returns are increasingly more difficult to achieve. However, the information deluge has not made investors less emotional – a key flaw when it comes to investing. As Charlie Munger, Vice Chairman of Berkshire Hathaway, pointed out in 2011: “It´s not supposed to be easy. Anyone who finds it easy is stupid”. For active investors, the explicit goal is to outperform the market - the relevant benchmark. At Lingohr & Partner, that translates into the adherence of an investment process which enables you to think independently, allows you to act differently from the crowd, and protects you from your own emotions.

The investment process therefore constitutes the investor’s edge - to outperform the market over a given time horizon. The shorter the time horizon, the less time is granted to you to act and think independently. Consequently, the probability to outperform is also curtailed because different time periods are more conducive to one particular investment style than another. Unfortunately, the investor cannot choose the investment environment. We therefore strongly believe that - to be successful - one has to stay true to one’s investment style.


Goran Vasiljevic

Managing Director (CEO, CIO)


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