Hidden value is difficult to find. Today’s markets are noisy, fast, and increasingly distorted, driven by passive capital flows, artificially manipulated rates, and constantly shifting narratives. In an environment where comfort often masquerades as strategy, many investors pile into mega-cap tech, private credit, or the latest thematic ETF, chasing yesterday’s winners. Few still do the hard work of seeking the truth and finding assets that are mispriced, not by machines but by human emotion, neglect, and misunderstanding.
Dave Iben, Chief Investment Officer and Founder of Kopernik Global Investors, has spent decades navigating precisely this terrain. His approach is grounded in a philosophy that sounds simple but demands uncommon discipline:
“Price is what you pay. Value is what you get.”
Even when the world forgets what value looks like, it still exists.
In our conversation, my third in the series, Iben explains why classic value investing is anything but dead, how Kopernik identifies mispriced opportunities where others see only noise, and why true adaptability, not consensus, is still the greatest edge serious investors can have.
Redefining Hidden Value In A Distorted Market
The last two decades have fundamentally reshaped how investors perceive value. With trillions of dollars flooding passive vehicles, central banks artificially distorting interest rates, and market participants increasingly trading narratives over fundamentals, traditional valuation signals have become blurred, if not outright broken.
Dave Iben has seen it firsthand — and argues that in today’s world, the classic notion of value needs a sharper, more discerning lens. At Kopernik, value isn’t about rigid formulas or rote application of discounted cash flow (DCF) models. It’s about paying far less for an asset than what it’s truly worth, with the humility to understand that models can deceive more easily than they reveal.
“You can misuse a DCF model badly when it comes to commodities. We’re valuing businesses, not forecasting commodities.” Iben explains.
That distinction is critical — especially in sectors like natural resources, where volatility, cyclicality, and geopolitical dynamics often make forward projections unreliable.
Rather than attempting to predict commodity prices, Kopernik focuses on appraising businesses themselves:
- How much free cash flow can they generate across cycles?
- How strong are their balance sheets?
- What assets or capabilities are deeply undervalued by a market obsessed with short-term noise?
This pragmatic approach naturally steers Kopernik toward real assets — tangible, cash-generating businesses that maintain intrinsic value even as financial engineering dominates headlines elsewhere. Iben’s team seeks investments grounded in real-world value, not spreadsheet assumptions, in a market environment where many investors adhere to passive benchmarks.
The Road Less Traveled — Why Geographic Bias Is Today’s Blind Spot
Even in a world defined by globalization, most portfolios today remain dangerously concentrated — both geographically and thematically. Most institutional and retail investors are heavily anchored to the U.S., and more specifically, to a narrow set of mega-cap technology names that dominate indexes and sentiment. Dave Iben sees this home bias as one of the greatest unrecognized risks—and one of the greatest opportunities. At Kopernik, the search for value doesn’t stop at national borders. In fact, the firm thrives precisely where others hesitate — in misunderstood markets, overlooked industries, and unloved geographies. Why? History demonstrates that capital ultimately gravitates towards areas with the most compelling value, rather than those with the most abundant comfort.
“Experience gives you the ability to move where others won’t,” says Iben.
Years of operating through multiple market cycles have taught Kopernik that today’s out-of-favor region or sector often becomes tomorrow’s outperformer — but only for those with the discipline and patience to move early.
By stepping outside the gravitational pull of U.S. equities and popular narratives, Kopernik is positioning for a future where diversification isn’t just about spreading risk — it’s about seeking the asymmetries that arise when consensus becomes complacent.
Forgotten Truths And Capital Misallocation
In today’s markets, speed, narrative, and momentum often override the most fundamental principle of investing: everything has a price. Iben believes that this simple truth—understood intuitively by earlier generations of investors—has been obscured in an era dominated by short-term thinking and monetary distortion.
“Markets forget there’s a price for everything,” Iben notes.
From unloved commodities to overlooked frontier markets, Kopernik’s portfolio construction is built around this core insight: when emotion overtakes discipline, massive mispricings inevitably emerge.
Often, assets remain cheap not due to a breakdown in their fundamentals, but rather due to a disconnect between investor psychology and reality. At one extreme, investors chase growth at any price, willing to suspend valuation discipline for the promise of future dominance. On the other hand, they demand unreasonable discounts on anything that feels uncomfortable, cyclical, or politically complicated, often overlooking real assets, strong balance sheets, and cash-generating businesses in the process.
Koperanik perceives the current environment as abundant with opportunities, primarily due to the crowd’s mispricing of both risk and uncertainty. Instead of chasing popularity, Iben’s team creates portfolios that combine valuation discipline, emotional detachment, and deep fundamental work, positioning them for a reversion not only in prices but also in perception.
Inflation, Currency Risk, and the Need for Real Assets
Although inflation has recently returned to the headlines, Iben emphasizes that it is not a novel phenomenon. What has changed — and what concerns him more — is how markets are reacting to it.
“Inflation isn’t new — but the demand to discount safety might be the real risk,” says Iben
Years of artificially low interest rates and passive capital flows have inflated financial assets in today’s environment, ranging from sovereign bonds to large-cap equities.
At the same time, real assets, which are tangible and hard-to-print resources such as energy, agriculture, and industrial commodities, continue to be relatively unloved and underrepresented in most portfolios.
Kopernik’s framework for inflation protection goes beyond a simple allocation to gold or commodity indexes.
Instead, the team focuses on businesses that own, produce, or control critical resources and that can maintain pricing power and real economic value even if currencies depreciate or regimes shift. This exercise isn’t about forecasting quarterly inflation figures. It’s about building resilience:
- Companies whose revenues are tied to real-world demand, not financial engineering.
- These are assets that benefit from scarcity, not hype.
- We need balance sheets that withstand real stress, not just backtests.
As concerns about currency devaluation, debt sustainability, and fiscal imbalances grow globally, Kopernik is positioning its portfolios toward the kinds of assets that have historically protected purchasing power — not just through financial crises, but through monetary ones.
Underwriting the Unconventional
True edge rarely comes from simply having access to information in a world increasingly dominated by abundant data, consensus screens, and algorithmic trading.
It comes from having the judgment to interpret uncertainty—and the conviction to act when others hesitate.
At Kopernik, evaluating risks in emerging markets, misunderstood cyclical industries, and resource-based businesses requires a careful balance between hard data and personal judgment. Financial models matter — but they’re only part of the equation.
“You make the money by looking where nobody is looking,” Iben notes.
This philosophy necessitates patience, intellectual independence, and a readiness to venture beyond conventional comfort zones.
Rather than relying solely on easily digestible metrics or analyst coverage, Kopernik digs deeper:
- Understanding the actual business operations is crucial.
- The task involves assessing the quality and incentives of management teams.
- We are stress-testing assumptions in environments where data is incomplete, messy, or outdated.
Language barriers, political risk, or commodity cycles can disrupt the flow of information, obscuring the underlying business value. It’s in these gaps that Kopernik finds some of its highest conviction opportunities — assets that are overlooked not because they lack merit, but because they lack narrative simplicity.
Betting On Uranium Before The Crowd
One of Kopernik’s most vivid examples of contrarian investing is its early and aggressive bet on uranium — at a time when almost no one wanted to touch it.
Following the Fukushima disaster, sentiment around nuclear energy collapsed.
Uranium prices plunged, supply was slashed, and investors fled the sector en masse.
But beneath the negative headlines, Iben and his team saw something different: an essential energy source with structurally constrained supply and a market treating a long-term necessity as if it were a short-term crisis.
While consensus focused on fear, Kopernik focused on fundamentals:
- There is a growing global demand for clean baseload power.
- There is a depletion in mine production and an underinvestment in new supply.
- A market imbalance that couldn’t stay hidden forever.
Investing during a period of widespread negative sentiment was challenging and did not yield immediate rewards.
But Iben’s experience taught him a critical distinction: being early isn’t the same as being wrong.
Patience—often for years—became the ultimate edge. When uranium prices finally began to recover, and the narrative shifted back toward nuclear as a viable energy solution, Kopernik’s early positioning was vindicated.
Managing Volatility In A Concentrated Portfolio
Running a concentrated portfolio in often-volatile and illiquid markets isn’t just a financial challenge — it’s a psychological one.
At Kopernik, managing volatility starts with how positions are sized relative to both conviction and risk. The team doesn’t simply equal-weight ideas or react mechanically to price swings. Sizing is based on a clear assessment of intrinsic value, business durability, and the likelihood—not certainty—of eventual market recognition. Just as important, however, is distinguishing between volatility that matters and volatility that doesn’t.
“Our strength is patience — both in the portfolio and in preparing our partners,” Iben explains.
Not all price movements are signals. In fact, many of the best opportunities require enduring significant short-term volatility to capture long-term value creation.
Kopernik spends considerable time not just managing assets but also managing expectations—preparing clients mentally for the inevitable drawdowns that are part of the journey when investing outside the comfort zones of liquidity and consensus. By aligning clients around a disciplined philosophy—and reminding them that volatility is often the price of opportunity—Kopernik turns what many see as risk into a source of potential outperformance. Maintaining a long-term discipline is one of the greatest challenges any investor or allocator faces in a world where quarterly performance metrics dominate headlines and market narratives shift by the hour. At Kopernik, helping clients stay anchored through cycles of fear, euphoria, and volatility is as important as selecting the right investments themselves.
The firm spends significant time reinforcing the behavioral foundations needed to capitalize on mispriced opportunities:
- We are setting clear expectations around volatility.
- We are normalizing periods of underperformance relative to momentum-driven benchmarks.
- We should frame market corrections as opportunities, not threats.
Years of experience across multiple market cycles give Kopernik a rare advantage — the ability to stay grounded when many around them react emotionally.
“Our strength isn’t just in picking assets. It’s in helping our partners stay the course long enough for value to be realized,” Iben explains.
In a short-term world, long-term discipline isn’t an afterthought. It’s a competitive edge—and a survival skill. Dave Iben doesn’t view value investing as an outdated relic.
He views value investing as a timeless concept, a compass that remains true amidst market noise and monetary distortion.
Kopernik maintains a quiet consistency in a world increasingly obsessed with speed, narrative, and short-term gratification: Kopernik consistently takes into account every detail. Kopernik invests where others do not. You can trust that genuine value and opportunities still exist for those with the patience to delve deeper. At its core, investing is not about predicting trends or chasing popularity. It involves recalling a truth frequently overlooked, as uncovering hidden value can be challenging.
“Price is what you pay. Value is what you get.”
Even when the world forgets, Kopernik hasn’t.
Read the full article here
