Morningstar - Q4 2021 - 67
Nygren runs Oakmark OAKMX and Oakmark
Select OAKLX, which have thrived as value
has rebounded over the past 10 months. Lynch
heads Morgan Stanley's Counterpoint
Global team, and his fleet of growth-leaning
strategies excelled in 2020, with some gaining over
100% for the year. Both are stock-pickers
who focus on company fundamentals, but their
tolerance levels for heightened valuations
lead to very different portfolios.
Their panel took place the morning after a spirited
debate between Research Affiliates founder
Rob Arnott and CEO of ARK Investment
Management Cathie Wood, who sparred over
Tesla TSLA and found little common ground. It was
fun, and it made headlines-you can read
it for yourself after this conversation. ( " Bubble
or Boom? " Page 72.)
Lynch and Nygren picked up on many of the same
themes but often arrived at a more nuanced
middle ground. Value and growth adherents alike
will find food for thought in the discussion.
Their conversation has been edited for length
and clarity.
Katie Reichart: To start with the concept of disruptive
change, how can you determine whether
something is a fad or a long-term secular change?
Dennis Lynch: Persistence comes to mind.
You want to wait some period of time before you
get conviction in a trend. But most of our
analysis is focused on the company itself and why
it might benefit or why it has a moat or a
competitive advantage, as opposed to the trend
itself. It's good to talk about themes or tailwinds,
but if there's not a company that's going
to be able to fully take advantage of that, then it's
not worth exploring.
Reichart: Bill, you're not necessarily looking to
invest in disruptors, but obviously disruption can affect
your holdings. What's your take?
Bill Nygren: I've been doing this long enough that
I remember when newspapers were viewed
as about the safest business that there could be.
So, the idea that disruption is something
new is a little bit off. Disruption has been going on
throughout the American economy since the
economy started. To try and differentiate between
Negative cash flow doesn't really scare us,
even as a value investor.
Bill Nygren
fads and what might be long-lasting tailwinds,
I would say to look at the benefits for the
customer. If a product is clearly superior, and the
customer benefits from it, it's much more
likely that it can be persistent.
Reichart: Dennis, what type of data do you need to see
to confirm that something is going to be disruptive?
Lynch: Unit economics are important. Can
the company be profitable? Beyond that, what is
the ecosystem of advantages and disadvantages?
Who's winning and not winning? And is
there a net gain to the entire ecosystem? A lot of
these approaches start off not necessarily
as robust as the current solutions or offerings in
a given area. But slowly but surely, through
the iterative nature of the investment those
companies are making, they creep up and create
problems for the larger companies that are
entrenched in how they're thinking, both culturally
and from a process standpoint.
Reichart: Dennis, you run strategies across
the market-cap spectrum and invest in some private
companies. When you see a company that seems
disruptive, but it's early stage, how certain do you need
to be to make that initial investment?
Lynch: It's an advantage to be able to look
across different parts of the market. The industry
runs the risk of being segregated and compartmentalized:
If you're a large-cap growth manager
and you're not aware of the earlier-stage
morningstar.com/lp/magazine
67
https://www.morningstar.com/funds/xnas/oakmx/quote
https://www.morningstar.com/funds/xnas/oaklx/quote
https://www.morningstar.com/funds/xnas/oaklx/quote
https://www.morningstar.com/stocks/xnas/tsla/quote
http://www.morningstar.com/lp/magazine
Morningstar - Q4 2021
Table of Contents for the Digital Edition of Morningstar - Q4 2021
Contents
Morningstar - Q4 2021 - Cover1
Morningstar - Q4 2021 - Cover2
Morningstar - Q4 2021 - 1
Morningstar - Q4 2021 - 2
Morningstar - Q4 2021 - Contents
Morningstar - Q4 2021 - 4
Morningstar - Q4 2021 - 5
Morningstar - Q4 2021 - 6
Morningstar - Q4 2021 - 7
Morningstar - Q4 2021 - 8
Morningstar - Q4 2021 - 9
Morningstar - Q4 2021 - 10
Morningstar - Q4 2021 - 11
Morningstar - Q4 2021 - 12
Morningstar - Q4 2021 - 13
Morningstar - Q4 2021 - 14
Morningstar - Q4 2021 - 15
Morningstar - Q4 2021 - 16
Morningstar - Q4 2021 - 17
Morningstar - Q4 2021 - 18
Morningstar - Q4 2021 - 19
Morningstar - Q4 2021 - 20
Morningstar - Q4 2021 - 21
Morningstar - Q4 2021 - 22
Morningstar - Q4 2021 - 23
Morningstar - Q4 2021 - 24
Morningstar - Q4 2021 - 25
Morningstar - Q4 2021 - 26
Morningstar - Q4 2021 - 27
Morningstar - Q4 2021 - 28
Morningstar - Q4 2021 - 29
Morningstar - Q4 2021 - 30
Morningstar - Q4 2021 - 31
Morningstar - Q4 2021 - 32
Morningstar - Q4 2021 - 33
Morningstar - Q4 2021 - 34
Morningstar - Q4 2021 - 35
Morningstar - Q4 2021 - 36
Morningstar - Q4 2021 - 37
Morningstar - Q4 2021 - 38
Morningstar - Q4 2021 - 39
Morningstar - Q4 2021 - 40
Morningstar - Q4 2021 - 41
Morningstar - Q4 2021 - 42
Morningstar - Q4 2021 - 43
Morningstar - Q4 2021 - 44
Morningstar - Q4 2021 - 45
Morningstar - Q4 2021 - 46
Morningstar - Q4 2021 - 47
Morningstar - Q4 2021 - 48
Morningstar - Q4 2021 - 49
Morningstar - Q4 2021 - 50
Morningstar - Q4 2021 - 51
Morningstar - Q4 2021 - 52
Morningstar - Q4 2021 - 53
Morningstar - Q4 2021 - 54
Morningstar - Q4 2021 - 55
Morningstar - Q4 2021 - 56
Morningstar - Q4 2021 - 57
Morningstar - Q4 2021 - 58
Morningstar - Q4 2021 - 59
Morningstar - Q4 2021 - 60
Morningstar - Q4 2021 - 61
Morningstar - Q4 2021 - 62
Morningstar - Q4 2021 - 63
Morningstar - Q4 2021 - 64
Morningstar - Q4 2021 - 65
Morningstar - Q4 2021 - 66
Morningstar - Q4 2021 - 67
Morningstar - Q4 2021 - 68
Morningstar - Q4 2021 - 69
Morningstar - Q4 2021 - 70
Morningstar - Q4 2021 - 71
Morningstar - Q4 2021 - 72
Morningstar - Q4 2021 - 73
Morningstar - Q4 2021 - 74
Morningstar - Q4 2021 - 75
Morningstar - Q4 2021 - 76
Morningstar - Q4 2021 - 77
Morningstar - Q4 2021 - 78
Morningstar - Q4 2021 - 79
Morningstar - Q4 2021 - 80
Morningstar - Q4 2021 - 81
Morningstar - Q4 2021 - 82
Morningstar - Q4 2021 - 83
Morningstar - Q4 2021 - 84
Morningstar - Q4 2021 - 85
Morningstar - Q4 2021 - 86
Morningstar - Q4 2021 - 87
Morningstar - Q4 2021 - 88
Morningstar - Q4 2021 - 89
Morningstar - Q4 2021 - 90
Morningstar - Q4 2021 - 91
Morningstar - Q4 2021 - 92
Morningstar - Q4 2021 - 93
Morningstar - Q4 2021 - 94
Morningstar - Q4 2021 - 95
Morningstar - Q4 2021 - 96
Morningstar - Q4 2021 - Cover3
Morningstar - Q4 2021 - Cover4
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2024q3
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2024q2
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2024q1
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2023q4
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2023q3
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2023q2
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2023q1
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2022q4
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2022q3
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2022q2
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2022q1
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2021q4
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2021q3
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2021q2
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2021q1
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2020q4
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2020q3
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2020q2
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2020q1
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2019winter
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2019fall
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2019summer
https://www.nxtbook.com/nxtbooks/morningstar/magazine_2019spring
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20191201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20181011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20180809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20180607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20180405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20180203
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20181201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20171011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20170809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20170607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20170405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20170203
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20171201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20161011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20160809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20160607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20160405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20160203
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20161201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20151011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20150809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20150607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20150405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20150203
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20151201
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20141011
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20140809
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20140607
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20140405
https://www.nxtbook.com/nxtbooks/morningstar/magazine_20140203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20141201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20131011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20130809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20130607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20130405
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20130203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20131201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20121011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20120809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20120607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20120405
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20120203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20121201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20111011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20110809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20110607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20110405
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20110203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20111201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20101011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100405
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20100203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20101201
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20091011
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20090809
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20090607
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20090405
https://www.nxtbook.com/nxtbooks/morningstar/advisor_20090203
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008fall
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008summer
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2007spring
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2007fall
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2007summer
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008spring
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008catalog
https://www.nxtbook.com/nxtbooks/morningstar/advisor_2008winter
https://www.nxtbookmedia.com