From a momentum standpoint, many investors have a hard time buying a company that had a positive return over the last 12 or 36 months. Within our investment process, that’s actually something that we are looking for. We aren’t afraid that we might have missed the boat, if you will.
On the flip side, when it’s trading at a discounted multiple, as JPMorgan is, many investors might shun that company. But what we know from our investment process is that cheap companies do tend to outperform over time. And that’s actually what we’ve seen. A significant amount of JPMorgan’s performance occurred during the fourth quarter of last year, the catalyst being the conclusion of the U.S. presidential election.
…some of what you saw was an initial euphoric period in the fourth quarter. It has waned in the first quarter and year to date as people realized that it is not going to be instantaneous. The regulatory environment will not change overnight. That being said, again, why we continue to own and like JPMorgan is purely based on the underlying value characteristics as well as momentum characteristics.