Strategic Value Investing in Turbulent Global Markets: The Power of Discipline and Resilience

In an era of geopolitical uncertainty, trade tensions, and volatile capital flows, the virtues of long-term value investing have never been more evident. Two standout examples—Horos Asset Management and MERLIN Properties—demonstrate how disciplined strategies, rooted in patience and rigorous analysis, can not only weather storms but thrive in them. Their approaches offer a compelling blueprint for investors seeking to navigate today's turbulent markets.

The Horos Model: Compounding Through Margin of Safety

Horos Asset Management's success lies in its unwavering commitment to value investing principles. By focusing on companies with a “high margin of safety”—a concept popularized by Benjamin Graham—the firm identifies undervalued stocks with robust fundamentals and durable competitive advantages. This approach has yielded extraordinary results: over 12 years, its international strategy has delivered an annualized return of 11.7%, while its Iberian strategy has returned 10.6%. These figures are not mere anomalies but the product of a disciplined process that prioritizes intrinsic value over market sentiment.

The firm's resilience in 2025, a year marked by U.S. tariff announcements and global market swings, underscores its philosophy. While the S&P 500 briefly entered bear territory in April, Horos' funds—Horos Value Internacional and Horos Value Iberia—posted Q2 returns of 6.6% and 10.3%, respectively. These gains were achieved by avoiding speculative bets and maintaining a long-term horizon. As Javier Ruiz, CFA, notes, “It is in times of panic that the most significant opportunities emerge.”

MERLIN Properties: Resilience in Real Estate

While Horos operates in equities, MERLIN Properties exemplifies value investing in real estate. As a leading Spanish REIT, MERLIN has built a diversified portfolio of offices, logistics hubs, and data centers, with a focus on sustainability and innovation. Its 2025 strategy—targeting a 40% reduction in carbon emissions and a 15% shift to renewable energy—aligns with global trends while enhancing long-term asset value.

The company's foray into data centers, a sector poised for explosive growth due to AI and cloud computing, has been particularly prescient. By acquiring 15-megawatt sites in Madrid and planning 78 megawatts of IT capacity, MERLIN has positioned itself to capitalize on Europe's digital transformation. Even as Spain faces economic headwinds, MERLIN's occupancy rates remain robust (96.2% in logistics, 96.5% in shopping centers), and its liquidity of €1.6 billion provides a buffer against downturns.

The Case for Discipline in a Chaotic World

Both Horos and MERLIN share a common thread: they reject short-termism in favor of compounding. Horos' 12-year annualized returns and MERLIN's €12.1 billion gross asset value (GAV) as of 2025 are testaments to the power of patience. In contrast, speculative strategies—such as those chasing AI hype without regard for valuations—often falter when markets correct.

For investors, the lesson is clear. In turbulent times, the key is to:
1. Focus on Intrinsic Value: Avoid chasing momentum stocks. Instead, identify companies with strong balance sheets, competitive moats, and undervalued fundamentals.
2. Diversify Across Asset Classes: MERLIN's blend of real estate and data centers, and Horos' global equity exposure, illustrates the importance of diversification to mitigate sector-specific risks.
3. Embrace Long-Term Thinking: Short-term volatility is inevitable, but compounding rewards patience. Reinvesting dividends and holding high-quality assets through cycles amplifies returns.

Conclusion: A Blueprint for the Future

As global markets grapple with trade wars, inflationary pressures, and technological disruption, the strategies of Horos and MERLIN offer a roadmap for resilience. Their success is not a product of luck but of rigorous discipline, strategic foresight, and an unyielding focus on long-term value. For investors, the takeaway is simple: in a world of noise and uncertainty, the most reliable path to wealth creation lies in the quiet power of compounding and the courage to stay the course.