Investors currently face a high degree of uncertainty. Geopolitical tensions are rising, protectionism is back on the scene, America has started a trade war, and meanwhile a (quiet) revolution in artificial intelligence is taking place. Despite all this turbulence, stock markets are already close to their all-time highs, while at the time of Trump’s “Liberation Day,” predictions were still that a global recession was inevitable.
As an investor, how do you keep your cool in such an environment? Where do you find footing amidst this chaos?
Perhaps we can draw inspiration for this from three icons who have each had an impact on the world in their own way: Warren Buffett, Johan Cruijff and Steve Jobs. Three visionaries from different worlds - investing, soccer and technology - but with surprisingly similar ways of thinking. And although Buffett has since announced his retirement, his lessons - like those of Cruijff and Jobs - remain invaluable.
Investing is more art than science
Investing is often less about hard data than you might expect. It is not an exact science. In the short term, markets are heavily influenced by emotions, expectations and sentiment. Anyone who wants to be successful as an investor must look beyond the delusion of the day and rely on vision, simplicity and discipline. Exactly the principles that Cruijff, Jobs and Buffett stood for.
Steve Jobs, the visionary founder of Apple, didn’t just build a company - he created a culture. Although he died in 2011, Apple is still one of the largest companies in the world today. His influence lives on in the company’s products and philosophy.
Johan Cruijff changed soccer forever with his “total soccer,” a concept centered on intelligence, space and cooperation. He was not only an exceptional soccer player, but also an innovative thinker.
Warren Buffett made “value investing” a life philosophy. He looked beyond the hype, to the fundamental long-term value of a company. His famous quote - “Be fearful when others are greedy, and greedy when others are fearful” - is more relevant than ever in these volatile stock markets.
Simple is not simple
In uncertain times, investors look for clarity. Shares of companies with predictable profits often receive higher valuations. Identifying such companies requires discipline and focus. And that starts with simplicity.
As Cruijff said, “Football is simple, but the hardest thing in the world is playing simple soccer.” Jobs, too, liked to keep it simple: “Simplicity is the ultimate sophistication.” His products, such as the iPhone, are textbook examples of minimalism.
Buffett’s approach to investing is as simple as it is brilliant: understand what you are buying, don’t overpay for it, and be patient. “The best investment is the one you understand.” As complex as the world is, simplicity provides guidance.
Staying true to your vision
In times of panic, many investors run with the herd. But those who want to be successful in the long run must dare to deviate from the norm and sometimes be contrarian. All three of these greats were not guided by conventions. They thought independently, did not go along with hypes, and remained true to their principles.
Buffett ignored countless market trends. Jobs followed an uncompromising vision of perfection. Cruijff was guided not by established systems, but by his own view of the game. All three believed in consistency: “Winning once is not important,” Cruijff said, “but winning again and again - that’s what builds your reputation.” This is true on the field, in technology and in the stock market.
The price follows the underlying asset
Investors often get carried away by the “tweet of the day” or unpredictable macroeconomic news flashes. But ultimately, the fundamentals of well-positioned companies with strong business models don’t change that quickly. A company’s long-term cash flow growth is still one of the best indicators of the direction of a stock price.
That’s why the lesson of Buffett, Cruijff and Jobs is so powerful: keep it simple, think long-term, be true to your vision and don’t be swayed by the delusion of the day. Or, as Cruijff put it, “You’re not going to see it until you see it through.”
In a time of much uncertainty, these three icons can give us direction. Not with predictive models or complicated analysis, but with timeless principles that are widely applicable to investors.
Author: Siegfried Kok
Siegfried Kok is Senior Portfolio Manager at OBAM Investment Management, the Dutch asset management company of the OBAM N.V. fund, one of the oldest investment funds in Europe, founded 1936.
Siegfried Kok’s career includes portfolio management responsibilities at Kempen Asset Management, ABN Amro Asset Management and BNP Paribas Asset Management.
OBAM N.V. is a UCITS-fund, managed by OBAM Investment Management B.V. Both entities are registered with the Dutch Authority for the Financial Markets (Autoriteit Financiële Markten). This is a marketing communication. Investors should refer to the prospectus and the Key Information Document (KID) of OBAM N.V. before making any investment decisions. The prospectus is available in Dutch and English. The KID is available in Dutch, English, German, Swedish, Norwegian, Danish and Finnish. Both the prospectus and the KID can be obtained via OBAM Investment Management B.V. (Schiphol Boulevard 313, 1118 BJ Schiphol, The Netherlands) or via www.obam.nl under the applicable jurisdiction. This marketing communication is provided for information purposes only and does not constitute an offer, prospectus, or any invitation to buy or sell any securities, to participate in any trading strategy, or to provide investment services or investment research, nor should it be regarded as professional investment advice or a recommendation to make any specific investment. Although the content of this marketing communication has been prepared with the greatest possible care and based on sources believed to be reliable, no express or implied guarantee, warranty, or representation is given as to its accuracy, correctness, or completeness. The information contained herein may be amended or updated at any time without prior notice. Use of the information contained herein is at your own risk. OBAM Investment Management B.V. may decide to terminate the arrangements made for the marketing of the Fund in accordance with article 93a UCITS Directive as implemented in Dutch law in article 2:124.0a Wft. Information about investor rights and collective redress mechanisms is available on www.obam.nl under the applicable jurisdiction.
