Voting or Measuring
“In the short run the market is a voting machine, but in the long run, it is a weighing machine.”
– Benjamin Graham
There is a great deal of wisdom in this famous quote. However, like many wise words they are far easier to say than to live by. No one likes to see a fund manager underperforming over a quarter and when they do, we immediately believe they have done something wrong. Often however it is the market not the manager that has temporarily lost its way. According to Bloomberg as of October 2025 inside the Russell 2000 there are 1120 companies with positive earnings per share and 806 had negative earnings per share. Since the downturn in April the companies with negative earnings are up over 30 percent while the ones with positive earnings are up a little more than 10 percent. The market is in voting mode, while we prefer managers who weigh things. Patience is in order.
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