First Eagle Funds Senior Advisor Jean-Marie Eveillard on the recent rise in the market and what to expect for the second half of the year.
The guy has a great track record and for that, what he has to say bears listening to. What is fascinating is how a single article he read in 2006 lead him to take action that saved his funds from the worst of the downturn.
Disclosure (“none” means no position):
This is a follow-up to a post from a week or so ago on the “death of buy and hold”. As a group value investors tend to have a longer holding period than most. Because of that typically the “buy and hold/forget” mantra is applied to them in a blanket fashion.
In the previous post I gave a specific example from myself as to why the death declaration is false.
Let’s look at another investor, Bruce Berkowitz of the Fairholme Fund (FAIRX).
Here are the funds returns (click to enlarge): 
Here is the funds prospectus:
Prospectus
Berkowitz is the perfect example of what today’s “buy and hold” investor needs to be. He buys cheap, waits for value to be realized OR for a fundamental negative change at the company and then sells. He does not simply “buy it and ignore it”. While the markets have indeed done and round trip the last decade, Bruce’s “buy and hold” has returned 195% over the same time frame….hardy “death like” performance…
If you are a buy and hold type of investor, you MUST buy cheap. There is no other option. Far too many buy and hold folks are under water because they bought expensive. Buy stocks like you buy a TV…..on sale..
Disclosure (“none” means no position):None