The market is cyclical, but what part of the cycle are we in? To better understand where we are in the market cycle we review a checklist from Oak Tree Capital founder Howard Marks.
Download Memo as PDF The Challenge Continues As the third quarter of 2021 draws to a close, investors face the same challenges: record high stock prices relative to any measure of earnings or revenue and record low interest rates. In this environment it is perhaps not surprising that investors have been stretching for returns anywhere they
By Bradford Cornell, Rob Arnott, Lillian Wu If a capitalist had been present at Kitty Hawk back in the early 1900s, he should’ve shot down Orville Wright; he would have saved his progeny money. —Warren Buffett Our objective is always to build big companies—if you don’t attack a big market, you’re highly unlikely to build a big company. —Don Valentine, Founder of Sequoia Big markets have a special allure for investors. They offer the promise of another Apple, Google, or Microsoft. But big markets also bring with them the threat of what Cornell and Damodaran (2020) call “the big market delusion.” Big market delusions generally begin with innovation or disruption that opens a new market, such as