Howard Marks

Howard Marks

Last Update: 11-14-2017

Number of Stocks: 75
Number of New Stocks: 8

Total Value: $4,245 Mil
Q/Q Turnover: 10%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Howard Marks Watch

  • Buying Value in a Good Ol’ Bull Market

    Many well-regarded experts have weighed in on the length and the pricing of common stocks 8½ years into this bull market. They range from the dire warnings of perma-bears like Marc Faber to more reserved warnings from Howard Marks (Trades, Portfolio) and Robert Shiller. The chart below shows an example of where we are in relation to history: (1)


      


  • Buy The Dip

    Bloomberg published an article on Monday titled “A ‘Crazy’ Stock Market Is Punishing Sellers.” Here’s a quick summary: The absence of volatility, combined with uninterrupted stock market gains, has led market participants to embrace their speculative side. There were a few comments from the article that I would like to discuss.


    'Buy the dip'

      


  • The Importance of Consistency

    In my last article, I briefly discussed Netflix Inc. (NASDAQ:NFLX). I think it might be useful to circle back to that discussion to address the main point I was trying to make.


    Here is what I wrote:

      


  • -3.9% Annualized Return for the Next 7 Years: Any Takers?

    fish, fish market, price


    Recently I came across a superb quarterly letter by Grey Owl Capital. The firm is run by Eric Brugel and Jeffery S. Erber and in the latest letter they review the macro environment and GMO’s seven-year asset class forecasts:

      


  • 'Moneyball', FAANG and Buying Opportunities

    For me, writing is like riding a bike. When I am putting together a new article every few days, the ideas seem to come easily. On the other hand, when I take a prolonged break, the well runs dry.


    Lately, it has been the latter. I did not write in September - and not because I was particularly busy. Simply put, I did not have anything to say that I thought was worth your time.

      


  • What Can We Do Now?

    The inspiration for this article comes from a combination of Howard Marks (TradesPortfolio)' memo “There They Go Again … Again” and interactions I had with a few friends.


    We all know that in the U.S, valuation is elevated, and the risk is high. But the question is what should we do now? This question is as easy as it gets, and it is also as hard as it gets depending on many factors such as whether an investor has figured out the purpose of investing, or whether he or she has well-defined parameters (time horizon, circle of competency, etc.) in which he or she operates. Things become complicated quite easily. Regardless, in general there are few points that are applicable in today’s environment.

      


  • Howard Marks and James Montier: Expect Lower Equity Returns

    Howard Marks (TradesPortfoliorecently published a memo titled "There They Go Again... Again," which has reportedly attracted the most interest “in the 28 years I’ve been writing memos, with comments coming from Oaktree clients, other readers, the print media and TV.”


    It is easy to understand why the memo has sparked such interest. In it, Marks warns the current market environment has many similarities today to that of the dot-com bubble and pre-financial crisis bubble. He also weighed in on the opportunity presented by bitcoin and other trends currently overtaking the market. The response to the original memo has been so great, Marks decided to write a response outlining the lessons he has learned from speaking with readers and listening to criticism. As always, the memo is highly recommended reading.

      


  • Howard Marks Responds to Critics With Memo: 'Yet Again?'

    Howard Marks (Trades, Portfolio), widely followed investor at Oaktree Capital, posted a memo on Thursday titled “Yet Again,” to push back at the firestorm his previous post “There They Go Again… Again” ignited in July. Marks’ latest clarifies statements he believed some clients, readers and media pundits misunderstood. In the process, he gives more details of his thinking on topics ranging from value investing to Bitcoin. He also makes his definitive statement on Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN) and other FAANG stocks.


    Read the memo here.

      


  • Lessons From the Past: Returns Without Risk

    Howard Marks (Trades, Portfolio)' regular memos should be required reading for every investor. Over the years, he has delivered some incredibly insightful comments about all areas of investing, but mainly value investing as this is where Oaktree specializes.


    Marks has been managing money for decades, and his memos are a record of his views during multiple market environments. Of interest are Marks’ commentaries around the dot-com and 2007 bubbles.

      


  • What Does Howard Marks See in Vistra Energy?

    According to aggregated second quarter 13F filing data, the second-largest stock buy among significant value funds last quarter was Vistra Energy Corp. (NYSE:VST). Vistra made it into the top 10 thanks to activity from one large investor, Howard Marks (Trades, Portfolio).


    During the quarter Marks acquired 50.3 million shares of the company at an average price of $16.80 per share, making it the largest holding in his equity portfolio accounting for 25.3% of the $3.34 billion equity portfolio managed by his firm Oaktree Capital Management.

      


  • 2nd-Level Thinking Is Required for Outperformance

     Howard Marks (TradesPortfolio)' regular memos should be required reading for every investor. Over the years, he has delivered some incredibly insightful comments into all areas of investing, but mainly value investing as this is where Oaktree specializes.


    As of yet, I have not personally been able to read all of the memos, but I have been able to review a fair few, and every single one has helped me build my investment process.

      


  • The Summer Heats Up

    The temperature in the stock market heated up again this month. Like a hot day at the beach, the Dow Jones Industrial Average stock index burned +542 points higher this month (+2.5%), while scorching +2,129 points ahead in 2017 (or +10.8%).


    Despite these impressive gains (see 2009-2017 chart below), overall, investors remain concerned. Rather than stock participants calmly enjoying the sun, breeze, and refreshingly cool waters of the current markets, many investors have been more concerned about getting sunburned to a geopolitical crisp; overwhelmed by an unexpected economic tsunami; and/or drowned by a global central bank-induced interest rate crisis.

      


  • Read Howard Marks' Memo: There They Go Again... Again

    Some of the memos I’m happiest about having written came at times when bullish trends went too far, risk aversion disappeared and bubbles inflated. The first and best example is probably “bubble.com,” which raised questions about Internet and e-commerce stocks on the first business day of 2000. As I tell it, after ten years without a single response, that one made my memo writing an overnight success.

      


  • Howard Marks' Oaktree Buys Into Small Businesses Through Fifth Street Finance

    Two weeks after Oaktree Capital, a global investment manager founded by Howard Marks (Trades, Portfolio), announced it would become investment adviser to two business development companies, Fifth Street Finance Corp. (FSC) and Fifth Street Senior Floating Rate Corp. (FSFR), it disclosed Monday it would also obtain certain voting rights through beneficial ownership of shares as part of the deal.


    According to a filing, Oaktree will also be deemed to have voting control over 19.2%, or 27,044,419 shares of Fifth Street Finance Corp. Through an agreement, the holders of the shares will vote according to Oaktree's directions. The agreement comes as part of Oaktree's deal to become the company's investment adviser.

      


  • Some Signs of 'Competitive Pressures' in Credit

    I recently finished “The Most Important Thing” by Howard Marks (Trades, Portfolio), the chairman of Oaktree Capital. Marks' ability to lay out all the relevant considerations on any given topic in a way that is easy to follow and understand is what I most appreciate about his writing. As usual, I made the mistake of waiting so long: "The Most Important Thing" is one of the best investing books I have read in some time. If you have not read it yet, you should move it to the top of your list.


    One concept I found particularly interesting was the discussion on credit cycles. In the book, Marks refers to a December 2007 memo that outlines a few of the major themes of a financial crisis. Here is a shortened list of the one's most relevant to this article:

      


  • Some Thoughts on Holding Cash

    The S&P 500 continued climbing in the first half of 2017, with a total return of 9.3% (according to Morningstar). Over the past five years, the compounded return for the index has been nearly 15% per annum (enough to double your money). It’s been a wonderful time to be long U.S. equities.


    As a corollary, it’s been a tough time if you’re holding dry powder. Instead of double-digit annualized returns, cash and equivalents have earned a pittance. As I’ve communicated previously, I’m holding a significant amount of cash and short-term bonds (just to clarify, I don’t own any long-term bonds). The combination of rising stock prices (which brought certain positions closer to fair value), a lack of enough new ideas at valuations that justified large initial purchases and continued contributions to my investment accounts has pushed the balance even higher. In the short term, the opportunity cost of holding a large – and growing – pile of cash has been sizable.

      


  • What Can We Learn From the Energy Market?

    One of the most fascinating areas to watch for the past three years has been the behavior of energy stocks and how various investors have played the energy stocks.


    Let’s go back three years to July 2014. Oil was selling at about $108 per barrel. By year end of 2014, the price of oil had fallen to $60 per barrel and less than $50 by January 2015. Then it ran up to $60 by mid-2015 and then collapsed to below $30 in January 2016, after which it made a big run to $50 by the end of 2016.

      


  • Don't Blame the Market

    Over the past decade, a number of renowned value funds have significantly underperformed the market.


    Fascinated by this fact, I read the most recent 10 years investor letters of most of the underperforming gurus. As I covered in my last article, there’s a variety of excuses, some legitimate and some dubious at best. All concluded that the strategies will work in the future because they have worked in the past; before the underperformance began, none suggested a change was needed. What I found disturbing is not necessarily the excuses but the inconsistency between what they say versus what they have done. But perhaps that’s ubiquitous so I’ll leave that out of today’s discussion.

      


  • The Media: How to Deal With It

    We live in a time where gaining access to information has never been easier. Accessing data on a stock takes seconds, and we are constantly bombarded with news and information about market movements, investment ideas or political developments.


    In my view, none of this information is helpful. Sure, it always pays to be up to date on world events and broaden your horizons by reading. A constant barrage of market intelligence, however, is not helpful and is more likely to push you to make irrational decisions than sensible investment choices.

      


  • Howard Marks on the Truth About Investing

    Howard Marks (Trades, Portfolio) is one of Wall Street’s most astute value investors. He is known in the investment community for his Oaktree memos to clients, which detail investment strategies and insights on the economy. These memos are always highly informative as Marks has an unrivaled view of Wall Street. His Oaktree Capital invests in distressed assets, the very essence of value investing, and in 2008, Oaktree raised $10.9 billion from investors, making it the largest distressed-debt fund in history. Oaktree’s 17 distressed debt funds have achieved annualized returns of 19% per annum after fees for the past 22 years.


    With such a wealth of experience behind him, it always pays to listen to Marks on investing. One of his more recent presentations took place earlier this year when he explained to an audience of CFA analysts in India the so-called “truth about investing.” Here are some extracts from the presentation.

      


  • 8 Stocks Van Den Berg Continues to Buy

    Arnold Van Den Berg (Trades, Portfolio), a value investor, founded Century Management in 1974. In both first-quarter 2017 and fourth-quarter 2016 the guru bought shares in the following stocks.


    Liberty Braves Group (BATRK)

      


  • Oaktree Capital Makes 23 Times Investment on Turnaround Play

    Oaktree Capital Management, which specializes in alternative investments, detailed its return on a food producer more typical of a tech company in a conference call Wednesday – the culmination of a nine-year turnaround.


    The firm, founded by veteran investor Howard Marks (Trades, Portfolio), will sell its 43% stake in AdvancePierre Foods (NYSE:APFH) as part of an announcement Tuesday that the company it would be acquired by Tyson Foods (NYSE:TSN) for $40.25 a share, or $4.2 billion. The buyout gave Oaktree a return around 23 times the capital it originally put up, a fact touted in its first quarter earnings call.

      


  • Ken Fisher Buys Vodafone, Daimler, Itau Unibanco

    Fisher Asset Management founder Ken Fisher (Trades, Portfolio) gained 78 new holdings during the first quarter of the year. His top three buys were Vodafone Group PLC (NASDAQ:VOD), Daimler AG (DMLRY) and Itau Unibanco Holding SA (NYSE:ITUB).


    Fisher founded his firm in 1979. He currently serves as the CEO and chief investment officer. The firm uses a top-down approach to determine which countries and sectors will generate the highest returns.

      


  • The Most Important Lessons: Acknowledging That We Don't Know

    One of my favorite chapters of the book “The Most Important Things” is Chapter 14 – "Knowing What You Don’t Know." In it, Howard Marks (Trades, Portfolio) shrewdly pointed out the following:


      


  • 7 Stocks With Growing Book Values

    The following companies have grown their book values per share (BV/S) over the last 10 years.


    BV/S is calculated as total equity minus preferred stock, divided by shares outstanding (EOP). Theoretically it is what the shareholders will receive if the company is liquidated. Total equity is a balance sheet item and equal to total assets minus total liabilities. Because the BV/S may not reflect the company’s true value, some investors check the tangible book value to confirm their investment ideas.

      


  • Stocks With Growing Book Values and Margins of Safety

    The following companies have a growing book value per share (BV/S) over the last 10 years.


    BV/S is calculated as (total equity – preferred stock)/shares outstanding (EOP). Theoretically it is what the shareholders will receive if the company is liquidated. Total equity is a balance sheet item and equal to total assets less total liabilities. Because the BV/S may not reflect the company’s true value, some investors check even the tangible book value to confirm their investment ideas.

      


  • 19 Questions With Gautam Baid, Portfolio Manager, Global Equities

    1. What is the best investment advice you have ever been given?


    It was undoubtedly the one shared by Benjamin Franklin – "An investment in knowledge pays the best interest." In today’s age of ever increasing automation, one needs to be a learning machine to remain forever relevant in the workforce as well as in one’s business. As so beautifully articulated by Charlie Munger (Trades, Portfolio), “Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day.”

      


  • Learning From the Best: Keep Emotion Out of It

    As an investor keeping emotions under control is probably one of the most important skills required to be successful over the long term. Famous investors such as Warren Buffett (Trades, Portfolio) and Seth Klarman (Trades, Portfolio) have mastered this skill, which is why they can buy when others are fearful and make billions from volatile markets.


    If it weren’t for the tens of thousands of highly emotional investors who cause market volatility, which throws up the opportunities for these value investors to take advantage of, their returns wouldn’t be as outstanding as they are.

      


  • Oaktree Boosts Stake as Largest Shareholder in SunOpta

    Oaktree, where value investing thought leader Howard Marks (Trades, Portfolio) is co-chairman, increased its stake last Friday in SunOpta Inc. (NASDAQ:STKL), a company where it is pushing for change as the biggest shareholder but where few other prominent value investors have been active.


    Oaktree found opportunity to increase its position when a weak earnings report released March 1 precipitated a decline in the company’s stock price. Shares of SunOpta dropped 15.3% from the market’s close Feb. 28 through March 2, registering their lowest price since August at $6.10 a piece. On March 3, Oaktree bought 3 million additional shares, reflecting a 26.5% holding increase that built his ownership to 14,333,333 shares, or 16.7% of the company.

      


  • A Review of Lawrence Creatura’s 'Long and Short: Confessions of a Portfolio Manager'

    Lawrence Creatura, principal at Long Short LLC, recently shared his insights from over two decades of investing in markets. The following are my takeaways from "Long & Short: Confessions of a Portfolio Manager."


    Identify your comparative advantage

      


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