Billionaire investor Howard Marks discussed Tesla's valuation, growth vs value investing, and the Fed juicing markets in a recent interview. Here are the 8 best quotes.
Trending News
Billionaire investor Howard Marks recommended amateur Tesla investors cash out some of their profits during a Bloomberg TV interview this week. His comments suggest he's not especially bullish on
2. "An individual not of great means - he should take some profits. If he bought Tesla two years ago, he probably has a huge gain. It's probably a very disproportionate amount of his financial net worth and his portfolio. He should absolutely cut back. Unless he really wants to try to hit the long ball. To do that, he should have a high pain threshold."
Read more: A leading Wall Street firm asked 7 famous investors about their favorite stocks and the global trades they're using to stay ahead of the competition. Here's what they're betting on now.3. "There's no reason that you can't do so-called value investing in growth companies." - arguing that the key tenets of value investing - treating shares as pieces of a business, focusing on companies' true worth instead of their price, relying on fundamentals to calculate their intrinsic value, identifying investments as attractive when their price diverges from their value, and having the emotional discipline to act only when that gap opens up and not otherwise - don't preclude growth bets.
4. "The investor's mentality should be eclectic and you shouldn't decline to invest in companies just because they're fast-growing and carry high P/E ratios. Just because something has a high P/E ratio doesn't mean it's overvalued, and just because something has a low P/E ratio doesn't mean it's cheap." 5. "There was a very famous value investor who made good money in some of the tech leaders. I said, 'Well how could a value guy invest in high-growth tech companies?' He says, 'Well, they looked like value to me.' The point is that he was open-minded."6. "There's no disputing the fact that growth stocks have outperformed value stocks. On the other hand, I think there's no disputing the fact that growth stocks have a better future than value stocks." - arguing that high P/E ratios and strong stock-price performance may fairly reflect the improving prospects of tech companies as they grow larger and more dominant.
7. "It's not something everybody can do, but I don't think it's something nobody can do." - on assessing which companies will survive and which will fail during a bubble.8. "The Fed and Treasury's actions, and specifically the reduction of the federal funds rate to zero, has had a very coercive effect on the market. It has required people to invest because they don't want to sit around with cash, money market funds, bank deposits, all earning zero. They don't want Treasuries at less than 1%, or high-grade bonds at 2% and so they've had to push out into risk assets." - explaining why the stock market continues to boom, despite immense political division and the pandemic's continued fallout.
Copyright © 2021. Times Internet Limited. All rights reserved.For reprint rights. Times Syndication Service.
Next