The Value Philosophy of BayernLB Premises and Fundamental PrinciplesDon‘t lose money. Rule No. 1: Protecting capital from substantial loss of value is the number one priority. Markets are inefficient from time to time. Active investing strategies can profit from short- and mid-term inefficiencies. Invest in companies, not stocks. The focus is on the long-term prospects of the company. Values are more stable than prices. The value of a company depends on average future conditions, not on individual years. The price decides. Good companies are not automatically good investments—always buy with a sufficient margin of safety. Volatility creates opportunities. Volatility is, in contrast to modern capital market theory, not accepted as a gauge of risk—quite the contrary. Patience is the key to success. The value strategy is also sustained in a difficult environment. Ignore the "herd". Use insights of Behavioral Finance Research to optimize performance.
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