Market & Topical Perspectives

Value as a Philosophy

Value as a Philosophy

Drawing on a large body of groundbreaking work—including that of such luminaries as Graham, Buffett and Eveillard, as well as thinkers further afield—First Eagle’s value-oriented investment philosophy is rooted in the belief that the greatest risk investors face is not day-to-day market volatility but rather the permanent impairment of capital, the primary cause of which is overpaying for assets.

Key Takeaways

  • Key-Takeaway

    The ongoing structural shift toward a knowledge-based economy heavily reliant on intangible assets—which, for the most part, are not captured in current financial accounting standards—has presented a challenge to investors seeking to identify undervalued stocks.

  • Key-Takeaway

    Rather than dogmatically limiting our universe to only the cheapest group of stocks by some statistical measure, the Global Value team lets the character of a business dictate its potential appeal as an investment, only then attempting to assign an estimate of price.

  • Key-Takeaway

    Our value-oriented investment philosophy is open to growth, but only growth that creates intrinsic value—a distinction we believe is far too often overlooked in markets that appear to prize potential above all. We have found that companies are more likely to deliver value-creating growth by investing in areas where they have an existing competitive advantage or there exist barriers to entry

  • Key-Takeaway

    Ultimately, the distinct temperament of our investment professionals—marked by patience, humility and flexibility—is key to the success of our investment process and its potential to mitigate the uncertainty that represents the true risk of investing.