The Long View
Bill Nygren: The State of Value Investing Today
Aug 15, 2023
Bill Nygren, Chief Investment Officer at Harris Associates, shares his insights on investing after major market events and the 2008 financial crisis. He discusses share repurchase as a capital allocation tool, the impact of the global financial crisis on value investors, and the analysis of Charles Schwab's investment strategy. The chapter concludes with a discussion on market mispricing and the importance of efficient cost management for long-term success.
01:02:32
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Quick takeaways
- Investing doesn't work reactively, as the market generally prices in information before it hits mainstream media.
- Undervalued sectors like financials and consumer cyclicals offer greater potential rewards for investors.
Deep dives
Market Anticipation: The Importance of Looking Ahead
The speaker discusses how the market always anticipates economic trends, which means that by the time news of a recession or inflation spike is widely reported, it is generally too late for investors to react effectively. He emphasizes the need for individual investors to understand that investing doesn't work in a reactive way, and that by the time news hits the mainstream media, the market has likely already priced in the information. The speaker mentions a historical exception during the 2008 housing collapse, but notes that in most cases, waiting for news to react is not a wise investment strategy.
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