With the sudden reversal in the market’s performance, GuruFocus Editorial Director Sydnee Gatewood discusses several gurus’ responses to the recent market downturn and how investors should continue to look for value opportunities despite the scary headlines. Among those responding are Warren Buffett (Trades, Portfolio), Wallace Weitz (Trades, Portfolio) and Bill Ackman (Trades, Portfolio).
Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway (BRK.A, Financial)(BRK.B, Financial) lost $80 billion during the recent downturn and the insurance conglomerate’s annual meeting was closed to the public due to the ongoing coronavirus pandemic.The crisis doesn’t seem to be putting him off in regards to investing however. In a CNBC interview with Becky Quick last month, he said that while the Covid-19 virus is “scary stuff,” he doesn’t believe it “should affect what you do in stocks.”
Howard Marks (Trades, Portfolio), the co-founder and co-chairman of Oaktree Capital, agrees that there is value to be found in the market currently. In a CNBC interview on Monday, he said “spending some money is not irrational” in this environment.
One guru who is doing just that is Royce Investment Partners’ founder Chuck Royce (Trades, Portfolio), who said in an interview that his firm is “actively investing” across its strategies since it is impossible to determine when the market will bottom out. On the other hand, Oakmark Funds’ Bill Nygren (Trades, Portfolio) recommends investors “rebalance” their portfolios in order to restore asset allocation.
Another guru who has said he does not intend to alter his strategy is Wallace Weitz (Trades, Portfolio), head of Omaha, Nebraska-based Weitz Investment Management. He said he believes “long-term investors are best served to stay calm, stay the course, and avoid reacting to scary news.”
As for dealing with the economic fallout from the pandemic itself, Bridgewater Associates founder Ray Dalio (Trades, Portfolio) said in a LinkedIn blog post he believes coordinated monetary policy and fiscal stimulus is the best course of action in counteracting the virus. In a separate blog post, he also expressed the opinion that 0% long-term interest rates will be “more harmful than helpful.”
Pershing Square’s Bill Ackman (Trades, Portfolio) is hoping for an arguably more drastic solution to combating the pandemic. In a twitter thread addressed to President Trump on Wednesday, the activist investor called for “an extended Spring Break,” where the country is shut down for 30 days and the borders are closed, with only essential services remaining in operation.
Whatever the outcome, the world’s most successful value investors recommend staying the course.
If you have any questions, feel free to comment below!
You can view Buffett, Weitz and Ackman's portfolios as of Dec. 31, 2019 below:
Warren Buffett: https://www.gurufocus.com/guru/warren+buffett/current-portfolio/portfolio
Wallace Weitz: https://www.gurufocus.com/guru/wallace+weitz/current-portfolio/portfolio
Bill Ackman: https://www.gurufocus.com/guru/bill+ackman/current-portfolio/portfolio
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