We Study Billionaires - The Investor’s Podcast Network TIP509: Value Analysis of Warner Brothers Discovery, Lithia Motors and Meta w/ Bill Nygren & Alex Fitch
Dec 30, 2022
Bill Nygren, a value investing guru at Oakmark Funds, and Alex Fitch, his fellow portfolio manager, delve into intriguing market insights. They explain Oakmark's strategy for navigating today’s economy and discuss why Warner Brothers Discovery is currently undervalued post-merger. The duo also highlights Lithia Motors' clever success in the used car market while contrasting it with struggling competitor Carvana. Additionally, they explore the mixed reactions to Meta's Metaverse investments, questioning its financial wisdom amid strong cash flows from Instagram.
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Oakmark's Investment Approach
- Oakmark's investment strategy focuses on identifying discrepancies between a stock's price and its estimated long-term business value.
- Market volatility creates opportunities to sell overvalued stocks and reinvest in undervalued ones.
Impact of Rising Interest Rates
- Rising interest rates negatively impact long-duration tech stocks but benefit financial institutions like banks.
- Investors underestimate banks' improved stability since the 2008 financial crisis.
Review Process for Underperforming Stocks
- When a stock underperforms, Oakmark conducts a thorough review process.
- This includes assigning a devil's advocate and meeting with management, as they did with Netflix.
