back to fundamentals, page-15

Thanks, Haka.

just had a look at its website

http://www.orbisfunds.com/invqa.aspx#philospohy


I like Orbis's investment philosophies:
long-term value based investing-in undervalued stocks.

There are lots more on the website that might be beneficial to read.
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"What is your investment philosophy?

The Orbis funds seek to invest in shares of companies that trade at a significant discount to our assessment of the intrinsic value of the business. We believe the share prices of such companies will eventually appreciate to reflect the intrinsic business value. The timing of the price move is uncertain, but the funds are prepared to be patient and invest in the company with a three to five year investment horizon. If executed in a disciplined and consistent manner such an investment philosophy offers the potential for superior returns and reduced risk of loss.

Isn't the market efficient? How can the Orbis funds make money?

We believe the market is not always efficient or rational. Investors are often driven by emotions, especially fear and greed, and easily succumb to their herd instincts. They also place too much emphasis on the latest short-term news and overlook the long-term fundamental prospects of the business or the economy. As a result, many companies are out of favour, misunderstood, and spurned by investors because of excessive pessimism on recent unfavourable developments. The share prices of such companies trade significantly below the long-term intrinsic value of the underlying business. We seek such opportunities and the funds buy into these companies. Poor sentiment will eventually subside as the business fundamentals come through and investors recognise the intrinsic value of the company. The funds sell when the share price approaches the intrinsic value, and when we can identify more attractive opportunities.

How do you summarise your investment style?

We are often seen as focused, contrarian, value-oriented managers investing for the long term.

Focused: Each of our equity funds typically contains no more than 50 primary positions at any one time.
Contrarian: We often find our funds buying shares that few others like and selling them when they are popular.
Value-oriented: We are not 'value' managers in the sense of buying only stocks with low price/earnings ratios or avoiding companies with high growth. We focus on intrinsic value and hold shares selling at low prices relative to their intrinsic value.
Long term: Intrinsic value often takes time to be recognised by the broader market. We therefore do our research with at least a four-year time horizon and our funds tend to buy and hold."
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