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 says that recent AI fears have caused a panic sell-off in software stocks, even dragging down solid companies. As a result, the difference between winners and losers is as extreme as during the early pandemic. The author argues this isn't about bad fundamentals—it's just emotion. For everyday investors, the takeaway is: don't panic-sell with the crowd. Instead, look for quality software companies that got unfairly punished and consider buying them at a discount. Worth reading because it shows how to spot opportunity in a downturn.
Oakmark portfolio manager Michael Nicolas notes that AI-related concerns have triggered a significant sell-off in the software sector, but history suggests that broad narratives often overlook details. Current stock dispersion has reached extreme levels not seen since the COVID-19 pandemic, and this
This chapter discusses the systemic sell-off in the software sector triggered by concerns over artificial intelligence. The report points out that current stock dispersion has reached extreme levels not seen since the COVID-19 pandemic, with the market exhibiting indiscriminate selling. This aligns with historical patterns where broad narratives tend to obscure individual stock details.
The author argues that the sell-off in the software sector driven by AI panic is a "familiar scenario"—market narratives often overlook company-level differences, and extreme dispersion creates opportunities to reallocate toward long-term value stocks. This is a contrarian judgment: the sell-off is not due to fundamental deterioration but rather sentiment-driven mispricing.
This chapter does not mention specific company or asset names, only analyzing the "software sector" and "long-term value stocks" as subjects.
Investors should leverage the current extreme dispersion to actively identify software companies depressed by indiscriminate selling and reallocate to targets with long-term value support. Avoid following market narratives with blanket actions, and instead focus on company-level fundamental analysis.