At first sight, it might seem this is not the best time to invest. The bond market is in the midst of a bubble brought about by an unprecedented episode of monetary meddling by the usual suspects (central banks, the banking industry and governments). When we consider that fixed-income is a less attractive form of investment than equities by definition, it would seem the only sensible approach is to invest in stocks.

But what’s going on with stocks? Many might say that here, too, the market juncture is at a delicate stage. The US exchanges and the MSCI World index are at historic highs after a powerful rally in the closing months of the year (the Ibex 35 rose 25% from its level in June, for instance).

Well, although a few months ago I might have agreed with this rather downbeat assessment, today I take the opposite view. The main reason for this is that our specific approach – the value investing philosophy – has again borne fruit and enabled us to find attractive investment opportunities. This process has been driven by two key factors: an optimistic mindset and strong analytical skills.

Trusting in human resilience is key to long-term investing.

Staying positive is a factor that depends on the investor’s own temperament, and often sets him or her apart from the competition. Most of the time, we think of patience, self-knowledge and self-control as indispensable traits of a strong investor. On the other hand, enthusiasm is a key trait that is too often forgotten about. When I say “optimism”, I don’t simply mean seeing the bright side of things when the market is on the way down. I also mean the ability to spot investment opportunities when the market is expensive, as it is now. An optimistic mindset goes hand-in-hand with a long-term vision, because how is it possible at all to invest over a 5 to 10 year term if you do not trust the human capacity to build a better future? Much of the time, media noise and confusion makes it harder for us to see the bright side, which means the pursuit of investing becomes more complicated. With the right attitude, however, you can gain an edge over the competition and spot “small treasures” in places where no one else is looking, precisely because most of the market is blinded by its pessimistic mindset.

S&P 500 (S&P50-USA)


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If an investor is able to combine an enthusiastic attitude with strong analytical skills, he or she is far more likely to spot quality companies at reasonable prices. Once you know where to look, analysis is the spade work you need to do to find out how much things are worth.

So optimism paired up with analytical nous have meant that what seemed to be a tough start has in fact turned out to be fascinating and fruitful. I think that we have sown the seeds of a promising future, and to achieve better peace of mind and a measure of joy in the process.

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