Here is a quote in Barron's from Bill Nygren about commodities and oil.
"Had we possessed perfect foresight and seen the changes in supply and demand that caused commodity prices to increase, it would have made sense to own those cyclic names."
Apparently his funds either did not have enough or did not have any exposure. He goes on to say...
"We don't believe the commodity price surge of the past three years will recur," and he expects that it "will likely reverse somewhat."
Why would anyone expect he would be correct now after being so wrong before?
Wikinvest Wire
6 comments:
Roger: The guy is a Large-Cap Value investor. He has been married to companies like: WM, TWX, MCD, HRB, FDC, BMY, XRX, YUM etc. for years and years.
In fact, Oakmark Select has over 15% of it's assets in WAMU alone.
His Equity & Income fund does own: XTO, ECA & COP if their top 5 holdings. I did not find anything that "shines" in his 6 funds.....
Roger,
This question has nothing to do with topic, BUT do you think the market is close to hitting bottom?? Please, no run-arounds on this. What's your honest opinion of where the market is going now?? And I find it hard to beleive that anyone has not lost 10% or more in theior portfolio in the last 3 months or so. Everyone knows that their is no crystal ball, BUT I'd like to hear your thoughts.
THANKS!!
I don't have my Barron's handy but Nygren's comment is a bit confusing. Even granting he (or his team) knows enough about commodity markets to accurately assess the probability of further "price surges" (in which markets one wonders, there are a fair number of commodities out there) the only thing that would suggest to me is whether or not a particular commodities-based stock might represent further untapped value; e.g., if a mining company can make a profit w/ copper priced at 26 cents/lb and the price of copper is ten times that one might suspect potential value even if copper slips by 50% or so. Or is he saying that he only pays attention to the stock cycle and ignores secular trends? That doesn't seem very smart but Nygren has a reputation for being smart so I guess I'm just confused.
PS to Anon: You do understand your question is inappropriate don't you? Not only is it off-topic and contrary to the (frequently restated) purpose of the site but it attempts to put our host personally and professionally on the spot.
In answer to your trailing question.
Because, if you can consistently stay on message - through good times and bad - eventually you'd be right. :)
As flippant as that sounds - there is some merit to the idea.
It's always been a pet suspicion of mine that most individuals lose money in the market because they're constantly changing investment styles for (too often)the wrong reasons.
Roger,
Stock market is the only place where you can change the horse you like to bet after it has left the gate. Successful investors should be flexible enough to change his/her mind and readily admits his/her mistakes and moves forward. George Soro came to my mind for having these qualities.
BTW, I sold off 99% of Oakmark Select two years ago but stayed with Oakmark Equity Income which is not managed by Bill Nygren as Larry suggested!
High Alpha
High Alpha,
I like to differentiate between successful trading and successful investing.
Nevertheless, I recognize your point.
Still, IMHO, most people are probably better served not trying to outthink the market. I'm sure your abilities make you the exception to the rule...
Maybe, we can agree to disagree.
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