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Our Investment Philosophy

  • 1
    Fundamental »
  • 2
    Long Term »
  • 3
    Contrarian »


We seek to invest in shares of companies that trade at a significant discount to our assessment of the intrinsic value of the business with an adequate margin of safety. Since shares represent a fractional stake in a business, we try to think like business owners when evaluating potential investments and assess each opportunity as if we were planning to buy the entire company. By looking at fundamental data going as far back as possible, we also try to judge the normal range of a company’s profitability and valuation over many market cycles. The chart below is an example of one of the tools our analysts use to assess the long-term fundamentals of a company. It overlays the share price of the company with key fundamental metrics. Although it is just a starting point, the chart helps analysts to quickly understand the company’s long-term fundamentals and their relationship with its share price, thereby enabling them to focus their research on the most promising ideas.

Share prices are driven by fundamentals over the long term

Share prices are driven by fundamentals over the long term

Long Term

We invest with a three to five-year investment horizon in mind. Doing so often allows us to uncover opportunities that others have missed or are simply not willing to consider. Investor sentiment can take a very long time to change course and the turning points are extremely difficult, if not impossible, to forecast. We must therefore be prepared to wait patiently – and at times to look foolish. At the same time, we continually reassess our positions to see if we were wrong. The technology bubble in 2000 was a perfect example. As the bubble inflated, we were right to avoid owning overvalued tech shares, but it came at a great cost to our relative performance in the short term. Ultimately we were able to protect our clients' capital and to deliver significant outperformance with opportunistic stock selection in the ensuing downturn.

Orbis Global Equity Strategy: Long-Term Performance (31 December 2015)

Orbis Global Equity Strategy: Long-Term Performance (31 December 2015)

Strategy returns represent combined returns for all Funds following the same investment objective. Strategy gross returns are asset-weighted actual gross returns of all the Funds following the same investment objective. Strategy net returns are based on the specified fee structure applied to the Strategy gross returns and do not represent actual net returns experienced by investors in the relevant Funds. Performance is calculated for the Orbis Strategy/Fund(s) specified.

Individual investors’ performance may differ as a result of investment date, reinvestment date and dividend withholding tax, as well as a possible substantial transaction levy that may apply in the case transactions representing more than 5% of a Fund’s net asset value. Figures quoted are for the periods indicated for a US$10 investment (lump sum, for illustrative purposes only).

The Average Global Equity Fund is comprised of Global Large-Cap Blend Equity funds which invest principally in the equities of large-cap companies from around the globe as defined by Morningstar.


To deliver long-term investment returns that are above average, we must be prepared to take different views. Our portfolios typically include companies whose prospects are deemed to be deteriorating or worse than average in the eyes of many market participants. Similarly, we are unlikely to find compelling investment ideas in the same areas of the market that other investors are most excited about. But being contrarian is very different to merely doing the opposite of what others are doing. After all, the stockmarket’s opinion ends up being correct most of the time. We therefore concentrate our resources on only our very best ideas, where we believe we have an edge and where we have a high degree of conviction that the stockmarket will eventually come to share our view. The chart below shows the “active share” of the Orbis strategies since inception and gives an indication of the extent to which the portfolios have differed from their benchmarks at the individual stock level. The higher the active share, the greater the difference versus the benchmark. Of course, this alone does not prove that we are contrarian, but it has been true throughout our history that the shares we like best are often out of favour or misunderstood for one reason or another. As such, executing on our philosophy tends to produce portfolios with a consistently high active share measure over time.

Orbis Equity Strategies: Very Different From Their Benchmarks Since Inception

Orbis Equity Strategies: Very Different From Their Benchmarks Since Inception

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