Recent stock market turbulence is a textbook display of cognitive bias in action. But for the value investor, these inconsistencies are opportunities.
The value approach is based on a long-term perspective. Its objective is to identify companies trading at a discount to their intrinsic value but primed for a rebound. This requires the fundamental principles of conviction-based management: mapping the trajectory of a company and its business lines to weigh its intrinsic value against valuation
inefficiencies; maintaining a contrarian mindset despite the deluge of data; and spotting the signs of disruption poised to shake up an industry.
These issues profoundly challenge investors’ relationship with time. Take for example the erratic behaviour of the markets during the first half of February. Behind such volatility, it is difficult to grasp the sheer brutality of intra-market swings, which are primarily driven by tactical repositioning.
This reading reflects the increasingly short-term horizon of most market participants and encourages market inconsistencies. Indeed, cognitive biases can trigger self-fulfilling phenomena so powerful that they dominate the entire market, even when the rationality of such movements is questionable.
Our approach to value
Under these conditions, the stock market’s timeline does not always align with that of the companies in which we invest. This disconnect creates opportunities for value investing through active management and rigorous stock selection. To capitalise on market inefficiencies, we adopt a contrarian approach informed by an understanding of “market regimes” – periods during which investors, markets or specific assets exhibit distinct
behaviours. Our investment process is built on the foundations of financial analysis, alongside the core concepts of market and corporate finance.
Within the Tocqueville Euro Equity Value fund, we focus in particular on the concept of the “productive economy” by favouring tangible assets. Against a backdrop of public deficits and weak growth in developed economies, these assets can act as safe havens. This is typical of companies with proven industrial expertise and production capacities that address the challenge of strategic sovereignty in Europe.
In addition, we adapt our stock selection around the principle of “shareholder returns”, seen through dividend payments and/or share buyback policies of certain companies. In a period of uncertainty, and following growth in valuation multiples across Europe, we believe this principle is synonymous with visibility.
We believe that dividend projections currently offer a sustainable yield, while share buybacks have a favourable accretive effect for shareholders. This strategic corporate finance choice is often a positive signal: buybacks of its own shares by a company are often perceived as a sign that the stock is undervalued. Today, we believe that “shareholder returns” alone can generate annual returns of 5% to 10%, independent of the upside potential on the share price. Value investing therefore adopts a contrarian view and is distinguished by the ability to detect opportunities where the consensus is not looking.
Drafted on 12.02.2026
Disclaimer
The opinions expressed in this document are the fund manager’s own. LFDE shall not be held liable for these opinions in any way. This information is provided for information purposes only and does not constitute an offer to buy or sell a security, investment advice or financial analysis.
The fund is exposed mainly to the risk of capital loss, equity risk and currency risk. Investors are reminded that the units of the fund presented may not be marketed in their country of residence. For further information and before making any investment, please read the regulatory documents available at www.lfde.com
Investment decisions should not be based solely on a fund’s non-financial approach, but should also take into account other characteristics, including its risks, as described in its prospectus.
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