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 don't let scary economic news fool you—what really matters is a company's ability to make money. The author bought cheap Japanese and European stocks when everyone was worried, and they later rose. For regular investors, focus on solid, undervalued companies, especially those benefiting from reforms. It's worth reading because it shows that fear can create good buying opportunities.
Oakmark International Fund and International Small Cap Fund delivered positive absolute returns and outperformed their benchmarks this quarter. Despite ongoing macroeconomic pressures, corporate profitability continued to make modest progress. The report notes that since the 2008–2009 financial cris
This chapter discusses the persistent disruption of investor sentiment by global macroeconomic events and how microeconomic reforms can become key to improving economic growth and unlocking equity value. The report notes that since the 2008-2009 financial crisis, investors have been overly focused on macro themes such as Japan's deflation, the condition of global banks, financial instability in the EU, and challenges in BRIC nations, leading to stock valuations being suppressed by fear, while "safe" global fixed-income assets have become overvalued.
The author's core investment argument is: Value depends on the present value of cash flows, not on news headlines. Harris Associates insists on seizing global undervaluation opportunities during periods of fear and uncertainty, and believes that the key to improving global economic growth lies in microeconomic reforms (e.g., labor market reforms, adjustments to social security systems), rather than monetary stimulus or low interest rates. Counterintuitive judgments include: heavy allocation to Japanese stocks and European financial stocks a year ago (when market sentiment was broadly pessimistic), as well as recognition of the People's Bank of China's move to curb liquidity growth and Italian Prime Minister's acknowledgment that sustainable growth comes from structural reforms rather than government spending.