- Howard Marks and Joel Greenblatt discussed bubbles, tech stocks and investment tips.
- The value investors suggested some companies deserve their high valuations.
- Here are Marks and Greenblatt’s nine best quotes from the interview.
- Visit the Business Insider website for more stories.
Value Investors Howard Marks and Joel Greenblatt discussed market bubbles, tech stocks and the most important things they have learned during their careers in a recently RealVision interview.
Oaktree Capital Management’s co-chairman and co-chief of Gotham Asset Management agreed that there were signs of irrational abundance in the markets.
However, they argued that some technology companies deserve aggressive valuations and that bottom interest rates limit investors’ opportunities. They also questioned the long-term consequences of the US government’s efforts to raise asset prices.
Here are the nine best quotes from Marks and Greenblatt, easily edited and condensed for clarity.
Brands: “We are certainly in a time of optimism that is largely man-made, primarily due to the actions of the Fed and the state to address the economic weakness of 2020. They produced a resurgence of risk-takers. FOMO took over for fear of losing money. And it really led to a very strong demand for securities. So that’s worrying. “
Brands: “We see risky behavior ranging from rapid acceptance of SPACs, to the ease of IPOs, phenomena such as GameStop, and the large involvement of retail, margin and option purchases. Many of these together can be signs of a bubble. But I think , That most asset valuations are reasonable in relation to interest rates. “
Brands: “A ‘bubble’ signifies unreasonable optimistic psychology and a belief that there is no price too high for the bubble asset. I do not think these are happening today. I just think all prices are up because of all the demand, as well as returning down. “
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Greenblatt: “I do not think there will be hundreds of other Amazon, Google, Microsoft out there. Many companies are priced as they will be. I think it is an element of foam.”
Brands: “The 40-year tailwind of falling interest rates that has lifted the price of all assets is coming to an end.”
Greenblatt: “If you take a company like Microsoft, Amazon or Google and actually put a reasonable growth rate on them for five years, and then look at where you are in five years, it’s 30 or 40 times the earnings. Your results show that they ‘are not astronomically priced. In many cases they are reasonable. “
Brands: “I always say that if you stand at a bus stop long enough, you get a bus. But if you run from bus stop to bus stop, you may never get a bus. And I think that’s an important thing for people to accept – nothing works all the time. “- advise investors not to switch from one strategy to another.
Read more: Short-seller Carson Block says the daily trading revolution that hit GameStop and other stocks is changing the rules of the game for investors like him. Here’s how his company reinvents itself – and what he’s betting on today
Greenblatt: “The people who are really successful in investing, do it for love, do it for the fascination, do it for the challenge. And these are the people who are most successful. The ones that Warren Buffett would say, pressure dance to work weekday. And that’s really the secret. “
Brands: “It’s not what you buy, it’s what you pay for it. Investment is about buying things well, not buying good things.”
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