European Capital Partners - Investing for the long run Discover this fund | European Capital Partners
Asset management and fund structuring boutique

Investing for the long run

Dec 01, 2022

The average holding period of a stock has decreased from 8 years in the 1960’s to 5 months today. To us, buying a share equals buying a fraction of ownership of a business. We would strongly assume that the fundamental value of the average business quoted on the NYSE will not change dramatically over 5 months. We conclude that most market participants take investment decisions based on short term price moves of securities. At ECP, we typically invest with an investment horizon of 4 to 5 years. That is on average the time it takes for Mr Market to uncover the fundamental value of the businesses we own. We are being paid for waiting as the companies continue to produce cash-flows and pay dividends. Long-term investing may be old-fashioned but remains our approach to use company fundamentals in our favour to generate investment returns.

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