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TIP355: Why Facebook Is A Value Stock w/ Bill Nygren & Mike Nicolas

Jun 22, 2021
Guest
Mike Nicolas
Guest
Bill Nygren
Bill Nygren and Mike Nicolas, portfolio managers at Oakmark Funds, dive deep into the surprising potential of Facebook as a value stock. They discuss its asset-light business model and strong cash flow, highlighting its significant growth prospects despite current market skepticism. The duo also reflects on the resilience of Bank of America and explains how traditional metrics might undervalue tech giants. With insights into Facebook's long-term strategies and challenges, they encourage a reevaluation of investment approaches in the evolving tech landscape.
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INSIGHT

Market Opportunities

  • The hosts discuss Bank of America's performance since their last discussion in 2020.
  • They note the stock's 100% rise but emphasize that the current market offers fewer opportunities compared to the 2020 dip.
INSIGHT

Bank of America's Resilience

  • Bank of America demonstrated resilience during the COVID downturn thanks to increased capital and improved underwriting standards.
  • Despite challenges, they generated substantial earnings and hold excess capital for shareholder returns.
INSIGHT

Bank vs. Fintech

  • Unlike many fintech companies, traditional banks offer downside protection due to their asset base.
  • Even in a worst-case scenario, banks can liquidate assets near book value, providing a safety net for investors.
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