Process and Results

When stock markets are difficult, an investor should act like that tennis player. The validity of an investment decision should not be judged by its short-term outcome, but by the quality of the decision-making process that preceded it.

For me, it is precisely when markets are difficult that I must redouble my efforts on the practices that have always served me well. I go to the gym even more often and continue to exercise almost every day. I read more than usual. I also focus more on what has always worked well in terms of investing at COTE 100: the COTE 100 System, research, patience. We focus on the fundamentals and on our companies. Over the past few weeks, my team and I have met with the management of three companies we hold in our portfolio. We have also conducted extensive field research by speaking with several people working in the industries of the companies in which we have invested.

It is easy to get derailed when things are not going as well as one would like. One might be tempted to abandon good habits and change approaches. An investor might give up on the value philosophy that has nonetheless served him well for many years, and get swept up in the market trends of the moment — such as AI, natural resources, and certain stock market indices.

Yet it is precisely during these periods that our good habits take on their full importance.

It is counterproductive to focus on short-term results. What matters is the investment process — everything we do that leads to our decisions. Research, monitoring the companies we hold, building our portfolios, managing risk — these are what will dictate the results we achieve for our investors over the long term. If an investor continues to do the right things, results will inevitably follow.

It is about being patient and focusing on the process. The results will follow.

Please note that I will be taking a break for the next two weeks and will be back on March 20th.

Philippe Le Blanc, CFA, MBA 
Chief Investment Officer at COTE 100