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 warns against the 'certainty trap'—the habit of seeing things as black or white, like assuming AI will either change everything or be a bubble. The reality is a spectrum. For everyday investors, the key is not to bet on one outcome. Instead, look for companies like Meta or Oracle that can profit from multiple AI scenarios because they have diverse businesses. Also, today's AI investors (like Meta) are cash-rich giants, not dot-com startups relying on stock markets, so they have a longer runway. The lesson: don't trust anyone who claims to know AI's final outcome—stay open-minded.
Oakmark’s Second Quarter 2026 Fixed Income Market Commentary focuses on the "Certainty Trap," pointing out that investors often fall into binary, black-and-white thinking—such as AI either transforming everything or turning into a bubble. The report emphasizes that real-world outcomes tend to fall a
This chapter centers on the concept of the "Certainty Trap," critiquing investors' tendency to fall into binary, black-and-white thinking amid significant uncertainty. Drawing on President Kennedy's refusal of the binary choice between "invasion or acceptance" during the Cuban Missile Crisis—opting instead for a third option of a naval blockade—the report argues that investors' most dangerous mistakes often begin with accepting others' predefined frameworks for a problem.
The author contends that AI is the most typical "Certainty Trap" today: the market broadly simplifies it into two outcomes—"changing everything" or "turning into a bubble." However, real-world results fall along a spectrum, not just two possibilities. Harris | Oakmark's core investment principle is: Do not predict the future; instead, seek securities where the current price already compensates for uncertainty. The author explicitly opposes two extremes: completely ignoring AI (assuming it is irrelevant) or going all-in on a single outcome (assuming the result is already known).
1. Key Difference Between AI and the Internet Bubble: Financing Structure:
2. Sources of AI Uncertainty (not a single factor):
3. Comparative Data:
| Dimension | Internet Bubble Era (circa 2000) | Current AI Investment Cycle |
|---|---|---|
| Primary Financing Source | Equity market (speculative capital) | Internal cash flow (>$500 billion annually) |
| Company Viability | Business model collapses when capital disappears | Balance sheet supports additional hundreds of billions in investment |
| Time Horizon | Determined by capital markets | Determined by the company itself |