Every company that is traded on the stock exchange has a share price and an intrinsic value. We analyse potential companies down to the smallest detail in order to determine the value. If the price is currently lower than the value, we consider investing, assuming that the price will adjust to the actual value in the long term.
Erfolgreichen Value Investoren gelingt es regelmäßig und über einen langen Zeitraum hinweg, besser als der Markt – sprich der Durchschnitt zu sein. Im Gegensatz zu ETFs sind wir nicht an einen Index gebunden - damit eröffnet sich ein deutlich breiteres Feld an möglichen Investitionen. Auch im Falle einer unvorteilhaften Entwicklung sind wir nicht gezwungen, krampfhaft an bestimmten Aktientitel festzuhalten.
Experienced Value Investors are able to outperform the market over a long period of time. In contrast to ETFs, we are not tied to an index - this opens up a much broader field of possible investments. Even in the event of an unfavourable development, we are not forced to stubbornly hold on to certain stocks.
Neben viel Erfahrung und hervorragenden analytischen Fähigkeiten verlangt Value Investing auch Mut und Geduld. Mut, sich nicht einfach hinter einem Aktienindex zu verstecken, sondern von diesem abzuweichen. Geduld deshalb, weil eine Annäherung zwischen tatsächlichem Wert und aktuellem Preis Zeit braucht und nicht von heute auf morgen stattfindet.
In addition to a wealth of experience and outstanding analytical skills, value investing also requires courage and patience. Courage to not simply hide behind a stock index, but to deviate from it. Patience because an approximation between actual value and current price can take time.
As a shareholder you are a co-owner of a real company. Imagine you co-own real estate - would you look at its price daily, maybe even hourly?
A long-term mindset is not only the key to a successful investment, it also saves you a lot of nerves and lets you sleep peacefully at night.
Warren Buffett puts it best: "The price is what you pay. Value is what you get." In our daily lives, we often follow this rule - we buy at special offers or sell out at lower prices.
However, when prices fall in the stock market, most (inexperienced) investors panic. But for value investors this is perfect - it's a chance to buy excellent companies at discount prices!
We do not buy shares in order to speculate short term, but rather to invest in excellent companies in the long term.
Short-term price changes are meaningless for us. Unless there is an opportunity for us to increase our investment by a price slide at an even more attractive price or to sell for a lot of money by an exaggerated price increase.
We use market fluctuations to the advantage of our customers. The market is made up of many people with different emotions and expectations that guide them. In a depressive phase, market participants often underestimate the value of a company. It is our task to recognize such cases and take advantage of the emotional fluctuations of the market.
The most important characteristic of a successful investor is the ability to make rational decisions. Reason is the best antidote to emotional errors.
Our structures and processes help us to eliminate potential sources of error.
We would never buy or replicate an index because we would also buy shares of companies that are overindebted, overpriced or simply unattractive. In order to invest successfully, you cannot swim with the masses, you have to break out of the crowd.
We are convinced of the enormous added value that outstanding managers can generate.
That is why we attach great importance to high management participation and meaningful incentive systems. We also look at successes and failures of the managers and examine how past forecasts and strategies have developed and how meaningful these were for shareholders.
Nobody is perfect, nobody knows everything, nobody can do everything.
That's why we only operate within our area of competence of value-oriented investing. And even in this area, we only invest in companies that we really understand and whose future prospects we can assess. We do not overestimate ourselves!
Analysis
In addition to hard facts, we are particularly interested in soft factors that cannot be measured in numbers. These include the quality of the business model, the management or unique competitive advantages.
We take our time for a careful analysis until we can assess the company and its opportunities and risks in detail.
Valuation
In the next step, we determine the “actual” value of the company and compare it to the current price (= stock price). If the price is below the actual value, we’re investing.
We assume that the share price will adjust to the actual value in the long term.
Monitoring
Once a stock has made it into our portfolios, we keep a close eye on our investment in order to react to changes in the competitive environment, management, or stock price.
If the price of a share drops, but we remain convinced of the company, we may use the drop in price to buy even more of the stock at a bargain price.
The most famous proponent of the value investing strategy is Warren Buffett. For over 55 years, the 89 year old investor managed to outperform comparable benchmarks.
Buffett proves that the basic principles of value investing are just as profitable today as they were back in the beginning.
"Price is what you pay. Value is what you get."
Hedgefund manager Joel Greenblatt is always on the lookout for great companies that are traded below their value.
From 1985 to 2005, Greenblatt yielded annual returns of over 40%.
"The strategy of putting all your eggs in one basket and watching that basket is less risky than you might think."
