Francois Rochon Investeringsfilosofi
François Rochon er en kanadisk investeringsforvalter og grunnlegger av Giverny Capital Inc. Rochon startet sin karriere som ingeniør, men skiftet fokus til finans og investeringer på 1990-tallet. Siden 1993 har han oppnådd en annualisert avkastning på 14,8%. Her er hans investeringsfilosofi og 8 punkter han følger.
- We believe that over the long run, stocks are the best class of investments.
- It is futile to predict when it will be the best time to begin buying (or selling) stocks.
- A stock return will eventually echo the increase in per share intrinsic value of the underlying company (usually linked to the return on equity).
- We choose companies that have high (and sustainable) margins and high returns on equity, good long term prospects and are managed by brilliant, honest, dedicated and altruistic people.
- We avoid risky companies: non-profitable businesses, with too much debt, with a lot of cyclicality and/or run by people motivated by ego instead of genuine stewardship
- Once a company has been selected for its exceptional qualities, a realistic valuation of its intrinsic value has to be approximately assessed.
- The stock market is dominated by participants that perceive stocks as casino chips. With that knowledge, we can then sometimes buy great businesses well below their intrinsic values.
- There can be quite some time before the market recognizes the true value of our companies. But if we’re right on the business, we will eventually be right on the stock.
Experience and common sense teach us that an investment philosophy based on buying shares in companies that are undervalued, and holding these companies for several years, will not generate linear returns. Some years, our portfolio will have a return that is below average. This is a certainty that we must accept.
Another important point: the significant volatility of the market is often perceived negatively by many investors. It’s actually the contrary. When we see stock prices as “what other people believe the company is worth” rather than the real value (at least in the short term), these fluctuations become our allies in our noble quest for creating wealth. Instead of fearing them, we can profit from them by acquiring superb businesses at attractive prices. The more that markets (the “other” participants) are irrational, the more likely we are to reach our ambitious performance objectives.
Benjamin Graham liked to say that the irrationality of the market provides an extraordinary advantage to the intelligent investor. The person, however, who becomes affected by short-term market fluctuations (less than 5 years) and who makes decisions based on them transforms this advantage into a disadvantage. His or her own perception of stock quotes becomes their own worst enemy. Our approach at Giverny Capital is to judge the quality of an investment over a long period of time.
So patience – ours AND that of our partners – becomes the keystone for success.