Oakmark is the mutual fund family launched in 1991 by Harris Associates, the Chicago deep-value firm founded in 1976 (about $105bn AUM). Bill Nygren runs the flagship Oakmark Fund and David Herro the Oakmark International Fund, buying businesses at large discounts to intrinsic value and holding them like owners — publishing quarterly fund commentaries, market commentaries and insight articles.
This report covers Oakmark Fund’s Q4 2024 moves. Although the market isn’t cheap, stock valuations vary wildly. They bought firms temporarily out of favor but with solid businesses: health insurer Centene (under 9 times expected 2025 earnings), Airbnb (discounted on travel slowdown fears), and asset manager Carlyle Group (price-to-earnings ratio less than half peers). For ordinary investors, the lesson: don’t be swayed by short-term fears; look for good companies at bargain prices. It’s worth reading because it shows how professionals find a “margin of safety”—buying well below a company’s true value—through concrete examples.
Oakmark Fund returned 2.04% in the fourth quarter of 2024, slightly underperforming the S&P 500 Index's 2.41%, but has achieved a cumulative return of 12.82% since inception, outperforming the index (10.67%). The report focuses on investment opportunities arising from market valuation divergence: al
This chapter reviews the performance and investment activities of the Oakmark Fund in the fourth quarter of 2024. The report notes that while overall market valuations are above historical averages, the dispersion in valuation multiples across different companies has widened significantly, providing the fund with opportunities to purchase a diversified set of high-quality businesses at reasonable prices.
The author's core investment argument is that the current severe valuation dispersion in the market actually creates a margin of safety and potential for excess returns. The counterintuitive judgment is that, against a backdrop of elevated overall market valuations, the fund buys high-quality companies undervalued due to short-term concerns (such as Centene, Airbnb, and Carlyle Group), believing their intrinsic value is not fully reflected by the market.
| Company/Asset | Role | Key Data | Bullish/Bearish |
|---|---|---|---|
| Wells Fargo | Largest contributor for the quarter | Fee income grew 12%; quarterly buybacks of $3.5B; full-year buybacks of ~$16B | Bullish: Believes it has a competitively advantaged business mix and return potential |
| Centene | Largest detractor for the quarter | 2025 EPS guidance above consensus; valuation less than 9x 2025 EPS | Bullish: Believes political concerns are overpriced, and the company has organic earnings growth capability |
| Carlyle Group | New purchase | P/E ratio less than half that of peers; management is driving expansion into retail channels and alternative credit | Bullish: Believes brand and distribution capabilities will drive growth, and the valuation discount provides a margin of safety |
| Airbnb | New purchase | Benefits from strong network effects; global travel market growth and increasing share of alternative accommodations | Bullish: Believes short-term concerns create a discount price, with a clear long-term growth runway |
| Elevance Health | New purchase | One of the largest managed care organizations in the U.S.; under pressure due to a mismatch between reimbursement rates and medical costs | Bullish: Believes headwinds are temporary, and the company's scale, diversification, and underwriting discipline will restore profitability |
| GE HealthCare | New purchase | Spun off from General Electric in January 2023; a global leader in medical technology | Bullish: Believes increased focus and improved management incentives post-spin-off will drive margin and growth improvements |