In this interview with FGV Finance, Howard Marks highlights that while some investors might say, “we don’t invest in tech”, the reality is that you can’t invest in this world and say I ignore technology. Here’s an excerpt from the interview:
Just because a company is a great company and sells at a high P/E ratio doesn’t mean it’s a bad investment. Just because it’s slow growing and predictable doesn’t mean, and low priced, doesn’t mean that something’s a good investment.
You should look at the various styles of investing. You should understand them. You should try to figure out which one appeals to you but the point is you shouldn’t be rigid and you should do a deep study.
Now technology… it’s hard today in 2021 to say we don’t do technology. Technology is everywhere throughout the whole world. That wasn’t the case 60 years ago. Even low-tech things like newspapers can be profoundly affected by technology, or how about stock brokerage firms can be highly affected by technology. A lot of investment products are now distributed via the internet so you can’t invest in this world and say I ignore technology because almost… most industries have the potential to be disrupted by technology.
I would just leave it at that, the point is you shouldn’t make superficial judgments. You look at a stock and it’s a tech stock and it’s selling at 50 times earnings, the whole market sells at 20 times, so you could say well it’s terribly expensive we don’t buy it but until you know enough about it you don’t know that it’s not an attractive investment despite the price.
You can watch the entire interview here:
https://www.youtube.com/watch?v=z3MMqFaDXlI&ab_channel=FGVFinance
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