**Resilience in Turbulent Markets: A Long-Term Perspective**
Despite a challenging third quarter, our international equity funds demonstrated their mettle, with the Oakmark International Fund rising 8.8% and the International Small Cap Fund surging 11.9%. While we acknowledge that our year-to-date performance lags behind our benchmarks, we remain confident in our investment philosophy and process.
Our approach focuses on fundamental analysis to determine a company’s intrinsic value, which we believe is the key driver of long-term returns. We use a two-step process to identify undervalued businesses and position them within our portfolio based on their potential for growth.
However, we recognize that our process is not infallible, and there are instances where we may misprice a business or fail to capitalize on opportunities. We continually strive to improve our valuation process, minimize errors, and learn from our mistakes.
In the short term, market sentiment and narrow influences can drive stock prices, but we remain focused on the long-term fundamentals that ultimately determine a company’s value. Our experience has shown that patience and discipline are essential in navigating turbulent markets.
We are heartened by the strong performance of our European financial holdings, which have contributed significantly to our returns this year. We believe that our overweight position in this sector will continue to benefit our investors in the long run.
While we acknowledge the current market extremes, with too much capital concentrated in a few large-cap stocks, we are confident that our process will continue to deliver strong returns over the long term. We remain committed to continually improving our investment approach and maintaining our disciplined focus on fundamental value.
We appreciate the trust and patience of our investors and are committed to delivering strong returns over the long term.
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