If you want to have a better understand why Howard Marks is considered one of the all time greats in investing, have a look at this simple paragraph on the FANG stocks:
There’s been a lot of discussion regarding my comments on the FAANGs – Facebook, Amazon, Apple, Netflix and Google – and whether they’re a “sell.” Some of them are trading at p/e ratios that are just on the high side of average, while others, sporting triple-digit p/e’s, are clearly being valued more on hoped- for growth than on their current performance.
But whether these stocks should be sold, held or bought was never my concern. As I said on Bloomberg:
“My point about the FAANGs was not that they are bad investments individually, or that they are overvalued. It was that the anointment of one group of super-stocks is indicative of a bull market. You can’t have a group treated like the FAANGs have been treated in a cautious, pessimistic, sober market. So that should not be read as a complaint about that group, but rather indicative [of the state of the market].”
That’s everything I have to say on the subject.
Its a perfect example of what Marks special: He sees the world through a lens of broader context, using sentiment and history to guide his hand. It is brilliant in its simplicity yet so full of insight.
The Marks Retort (Reformed Broker)