Here’s an interview with Prem Watsa on the Price-To-Value Podcast in which he discussed the under-performance of value investing in recent years, and its future. Here’s an excerpt from the interview:
Watsa: Yeah, you’re exactly right. In the last 10 years since that 2008, 2009 crash, call it the great financial crash. Since that time, value investing basically I think one, maybe two years we’ve had that value-oriented stocks have done well compared to momentum. You’ve had technology, as you know. The FANG stocks and high technology stocks have done well. They don’t have to make any money, it seems, and they continue to finance at higher valuations.
But the long history of the stock market shows that value investing pays off. You have to be patient. You have to take a long-term viewpoint. Some of these newer models make it come up in some time, and you never know when.
We had the dot com era for some time, as you’ll remember in the 2000 time period. It seemed like these companies would go through the roof. Of course, they suddenly hit the wall and came down 75, 80%. And some of them disappeared.
So we just think value investing, where you’re buying something, a dollar for 50 cents is the expression. Good companies run by good, honest, hardworking presidents, CEOs. And you’re buying them at fair prices. We think over time, that should work. Yeah, we’re still continuing to be believers like you and Mason at Southeastern.
You can listen to the entire interview here:
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