Howard Marks: "If it's cheap...

today we buy it"

(Bloomberg) – “Excesses” in financial markets that drove bullish psychology out of control are being corrected in this downturn, leading to better opportunities for value investors, according to Oaktree Capital Management co-founder Howard Marks.

“The bloom is off the rose, and we’re happier than we were six months ago,” Marks said in a Wednesday interview with Bloomberg Television’s Lisa Abramowicz. “When there’s euphoria, optimism, greed, that’s a very difficult environment for a value investor.”

“We are not market timers,” Marks said. “If it’s cheap today, we buy it. I think that works much better than an assertion that we know where it will be in six months.”

Outside of the US, Oaktree sees value in areas other firms avoid, including Chinese and other foreign and emerging markets.

https://www.bnnbloomberg.ca/oaktree-s-howard-marks-sees-retu…

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Howard Marks no longer listening to his son.

Thought his comments on China were interesting:

““I’ve made my living for the last 50 years investing in the things other people said were uninvestable,” he said. “When I hear people say that China’s uninvestable, to me uninvestable says, maybe there’s some bargains there if everybody else is boycotting that sector.””

Anyone else still (bag)holding BABA like me?

Down 23% on my BABA “investment”.

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Me. I have also bought some calls around $100, I have also sold $115 calls; So most of my recent purchases will be closed if the calls are assigned; I still have some $200 purchases, which is deep in red. The recent purchases, options all made money, so far.

I watched those interviews about discussions with his son during the pandemic and a “new era” did they buy anything different (out of the ordinary) in the end? Those discussions were a year or two ago now.

Still hold lots of BABA which is looking better now. My average is probably about c150ish per ADR. Holding long term anyway so wasn’t bothered by any drop in the slightest.

Thanks to BABA and tech names, the portfolio is up .75% vs -.85% (SPY). I just need only 250 of these days per year. :slight_smile: :slight_smile:

My baba average cost is $106. I started buying two weeks before end of March and added when the stock tanked in May.

Above water now, but I noticed a flood of recent insiders selling of JD, PDD (which nobody seems noticed except me!) which worries me (but these selling happened in end of May before the easy-of-regulations news came out).

Lesson learnt with BABA is to be more cautious / conservative with valuation, the outlook can and often does change even for something you think is a sure bet.

Perhaps look at 15 x last 3 years earnings rather than 20 with more conservative growth projections which take into account low to no growth for a while…not too much harm done. You learn from your mistakes :person_shrugging:???

BABA was/is not about valuation, but about politics/delisting worries and the resulting unpredictability. Whether you calculate with 15x or 20x in such a case is irrelevant.

An amateur’s 2 (or rather 1) cent.

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Despite the volatile price, baba has roughly $20 cash , $20 investment in Ants ,per ADS share, and is buying back 25bn of stocks. It’s really dirt cheap for a company with this kind of enormous reach to billions of consumers.

I read a tech startup ceo recently committed suicide during Shanghai lock down (he left a note about how difficult the business env has become due to zero Covid policy), I thought this is a “blood on the street” moment described by JP Morgan.

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I was thinking more along the lines that earnings had been growing at a nice clip over the last 5 years and have halved this year. That’s bot down to ADR listing concerns.

I followed Munger into BABA. Sold half at 20% loss and other half is now down 45% in 12 months. Tiny position, thank goodness. May harvest the tax loss or just let it play out. I did reasonably well many years ago with Matthews Asia/ China Fund. No interest currently in any further China investment given CCP.

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Agree with said2 that Alibaba, the stock’s price, isn’t about valuation much at all.

Imo, unless We American can stop mass shooting kids, we have no rights pointing finger to CCP about human rights.

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Imo, unless We American can stop mass shooting kids, we have no rights pointing finger to CCP about human rights.

My hesitancy to buy companies based in China has nothing to do with human rights and everything to do with my perception of lack of restraints on the gov’t.

Too many wild cards when there are so many alternative options here that come with regulations. I am happy to let others have the higher risk that comes with the potential reward.

IP

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Foreign stocks will be greatly affected by nationalism of all countries going forward. It likely will be one volitile ride. Cheap may prove lucrative or not depending on the delist possibilities where you and your broker seek a market.

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It’s funny how we perceive things.

I view the restrictions by the CCP of foreign company entry into the domestic market (FB, Google etc) as a moat for Alibaba and Tencent. Added to this both are central for the Government in their growth initiatives domestically and internationally.

<I view the restrictions by the CCP of foreign company entry into the domestic market (FB, Google etc) as a moat for Alibaba and Tencent. >

Both FB and google operated in China in earlier years. They left because they didn’t agree to handle over some user information (after some social riots) or subject to some information filtering. About one year ago, there was rumor that google might return and agree to the government requirement. It was canceled after internal employees revolt.

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And the UK deporting immigrants to Rwanda now deemed illegal by the UN.