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Quote of the day by Jean Marie Eveillard: "If you are a value investor, every now and then you lag, or experience what consultants call tracking error. It can be very painful. To be a value investor, you have to be willing to suffer pain."
Economic Times 2 hrs ago·30 Sept 2026, 11:47 am
Legendary investor Jean-Marie Eveillard has highlighted a core challenge for value investors: the need to endure periods of underperformance. He notes that focusing on undervalued companies often leads to "tracking error," where a portfolio trails the broader market for a time. This happens when growth stocks or momentum plays temporarily outperform, even if the value stocks are fundamentally sound.
For retail investors, this serves as a reminder that patience is essential. The strategy relies on buying quality assets at a discount and holding them until the market recognizes their true worth. Success requires discipline to stick to your valuation thesis despite short-term market noise or pain.
Moving forward, investors should monitor how their portfolio performs relative to benchmarks. The focus should remain on the underlying fundamentals of the holdings rather than short-term price fluctuations. True value creation often comes from weathering these inevitable market cycles.
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- Category: Stocks.
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