Howard Marks: The Investing Landscape Has Changed For Value Investors

In his latest interview on the Q&A Speaker Series Event at Brown University, Howard Marks provides a great example of the changing landscape for value investors. Here’s an excerpt from the interview:

There’s a great quote from Buffett he says, we are not growth investors or value investors we’re investors. And so the trouble is when things get labelled then they get narrowly defined.

You have to I think to be an investor in the coming decades, you have to be broad-minded, and you have to say I’ll buy anything at an attractive price. So for the last 30 years investors, value investors, have been saying we don’t buy fast growing companies. We don’t buy tech. These are… we don’t buy anything with a high P/E, but what can you buy today that’s not reliant on tech?

I mean 20 years ago or so Buffett made a ton of money in the Washington Post and other newspapers and they were moated. They could not be disrupted by technology because every town had a newspaper. You needed a newspaper. It’s the only place that the used car lot would advertise. It’s the only place you could look to get the movie times.

It’s the only place that employers could advertise jobs they had available, and the newspaper from the next town wouldn’t do because they had… they didn’t have the locally relevant information.

So each newspaper had a moat and was defensible, and then guess what the internet came along, and on the internet you can find all the jobs in your town and the next town and the next city and the next country.

You don’t need a newspaper anymore for that, and the newspapers have been horribly disrupted and many of them are struggling.

They got a life preserver when Trump became president because he was so controversial that people were reading the newspapers more but other than that it just shows you that there’s very little which is immune from technological influence.

So the argument is you have to be broad-minded you can’t say we do this but we don’t do that and you have to be… rather than buying mundane companies at low prices you have to be open to buying good companies at high prices.

You can watch the entire interview here: