Rather than a result being misunderstood, our longer-term investment horizon often means we have a different response to an earnings release to much of the wider market. For example, we generally welcome a company reinvesting back into their business at the expense of margins in the short-term, if those funds are invested prudently in widening its competitive moat. This has been seen in the results of Seek Limited (SEEK) over the past several periods and REA Group (REA) in its most recent result. REA flagged higher expenses in the second half as a result of growing marketing spend and investments in IT to improve the value proposition to its customers, which should enhance the company’s competitive position in the long-term but was initially met with a negative market reaction.



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