저자: 미상 · 외국인
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Howard Marks의 책 내용을 낭독한 영상으로, 투자의 핵심은 좋은 자산이 아니라 좋은 가격(bargain)을 찾는 것이라고 설명한다. 저평가 자산은 대개 대중이 외면하고 비관적으로 보는 곳에서 나오며, 평균회귀와 역발상 사고가 중요하다고 강조한다. 과거 사례로 전환사채, 하이일드 채권, 부실기업 채권 투자가 인기 없을 때 좋은 성과를 냈다는 점을 든다. 다만 시장이 항상 비효율적인 것은 아니므로 과도한 낙관과 회의주의의 균형이 필요하다고 한다.
다듬은 글
12. The most important thing is to find bargains. The best opportunities are usually found in what most other people don't do. The process of intelligently building a portfolio consists of buying the best investments, giving them space, selling assets that aren't very good, and staying away from the worst.
The raw materials of the process consist of: a) a list of potential investments; b) an estimate of their intrinsic value; c) some insight into how to compare their prices to their intrinsic value; and d) an understanding of the risks involved in each investment and the effect their inclusion would have on the portfolio to be assembled.
The first step is usually to ensure that the assets being considered meet certain absolute standards. Perhaps you will never hear sophisticated investors say something like, "If it's cheap enough, I'll buy anything." What they usually do more frequently is create a list of investment candidates that meet their minimum criteria and, from the listed assets, choose the best bargains.
That's what this chapter is about. For example, the investor can start by narrowing down the list of possibilities to assets whose risk is within certain acceptable limits, as some of them are not comfortable with certain types of risk. Risk examples include the risk of obsolescence of a rapidly evolving technology segment, the risk of a trendy consumer product losing popularity, other investors considering that a subject is outside their area of expertise, and others still having an inclination not to accept certain companies at all, either because the business they participate in is too unpredictable or because their financial statements are not sufficiently transparent.
It is completely reasonable to want to prioritize assets that fall within a certain portion of the risk spectrum. It is possible that, on the one hand, assets considered extremely safe by the market offer unattractive returns; on the other hand, those at the opposite extreme exceed investors' risk tolerance.
In other words, it is reasonably possible that there are assets that investors will not accept regardless of the price. Not only may there be risks that investors do not want to take, but also risks that their clients do not want them to take. Especially in the institutional world, managers are rarely told, " Here's my money.
Do what you want with it." The job of a capital manager is not only to make potentially profitable investments but also to deliver to clients what they want. Since most institutional investors are hired to perform specific assignments in terms of investment styles, if a client wants a certain type of investment, they don't have much to gain from others, regardless of their attractiveness.
For example, if a client wants a high-quality, capital-driven investment, they might want to run a riser, or invest in high- tech startups. This is because the starting point for building a portfolio has an unlimited universe of investments as a base. Some investments are seen as realistic candidates to be included in the portfolio, others are not.
Thus, after defining the portfolio, the next step is to select which ones to invest in. This is done by identifying those that offer the best relationship between returns, because those that offer the best returns are what Sid, editor of the Live Security Analysis by Graham Dod, meant when he told me that, in his opinion, investing is the discipline of relative selection.
This phrase has stayed with me for 35 years. Although simple, Sid's phrase incorporates two important messages: first, the investment process must be rigorous and disciplined; second, it is necessarily comparative, even if prices are low or high, and therefore prospective returns are high or low. We need to find the best possible investments, and since that's the case...
We cannot change the market if we want to participate. Our option is to select the best investments from the existing possibilities. These are relative decisions; what makes an asset the excellent investment we are looking for, as I mentioned in Chapter 4, is largely a matter of price. Our goal is not to find good assets, but good buys.
Thus, it's not about what we buy, it's about how much we pay for the purchase. A high-quality asset can be a good or bad buy, a low-quality asset can also be a good buy. The tendency to confuse objective merit and investment opportunity, as well as the failure to distinguish between good assets and good buys, puts most investors in trouble, since we are looking for good buys.
My main objective in this chapter is to explain what makes a buy good in general. This means that the price is low relative to the value and that the potential return is high relative to the risk. How do bargains become what they are? In Chapter 10, I used the tech stock mania as an example of a reliable process through which a good idea about fundamentals can turn into an overpriced bubble.
In general, it all starts with an asset. Clearly attractive, as investor opinion of the asset improves, more people want to buy it. This causes capital to flow into it and its price to rise. People take the price increase as a sign of the investment's merit and then buy even more. Others hear about it for the first time and also decide to buy.
Thus, the upward trend takes on the appearance of an endless virtuous cycle. In short, it's a popularity contest in which the asset in question is the winner when it continues for a satisfactory time and gains enough strength. Trendy investments turn into bubbles, and bubbles can offer sensible investors many opportunities to sell and short sell.
The process by which bargains are created is largely the opposite. So, to find them, it's necessary to understand what makes an asset become unpopular. This doesn't necessarily occur as a result of an analytical process; in fact, much of the process is anti-analytical. This means it's important to think about the psychological forces behind its changes in popularity.
So, what makes the price low relative to the value and the return high relative to the risk? In other words, what makes the selling price of an asset lower than it should be? Regarding assets that become the object of fads, potential "orphan stocks" often present some objective flaw. It's possible that an asset class has weaknesses; for example, a company may lag behind its sector, a balance sheet may be excessively leveraged, or perhaps an asset offers inadequate structural protection to its holders.
Since the process of setting fair market prices efficiently requires the involvement of analytical and objective people, "orphan stocks" are usually based on irrationality or some incomplete understanding. Therefore, "orphan stocks" are usually created when investors don't consider the asset fairly, fail to examine deeper aspects to fully understand it, or fail to overcome some traditional bias or restriction not based on value.
Unlike market darlings, the orphan asset is ignored or despised. When mentioned by the mid-market at cocktail parties, this is done in unflattering terms. Generally, its price is falling, making the first- level thinker wonder who would buy this type of asset. It's necessary to reiterate that most investors extrapolate historical results into the future, hoping that trends will continue instead.
Taking this into consideration is something much more reliable. This is regression to the mean. First-level thinkers tend to see the fragility of historical prices as something worrying, not as a sign that the asset has become cheaper. As a result, an asset in decline tends to be highly unpopular; capital stays away from it or flees, and nobody can imagine a single reason to buy it.
Here's an example of how declines can be created when an entire asset class goes out of fashion: the history of bonds over the last 60 years is the opposite of the rise in popularity enjoyed by stocks. Bonds began to lose their popularity when stocks began to monopolize the spotlight in the 1950s and 1960s until, at the end of 1969, the Fast National City Bank weekly report with data on bonds had its last publication with the headline and the last edition on a black background.
Bonds were decimated in the high- interest-rate environment of the 1970s, and even though interest rates have steadily decreased during the 1980s and 1990s... In the second half of the 1990s, bonds lacked the resources to compete with the enormous profits of stocks. Any investment in bonds instead of stocks was seen as an anchor that restricted the profitability of any portfolio.
I chaired the investment committee of a non- profit institution and witnessed a sister organization from another city, which had suffered for years with a mix of bonds and stocks of 80% and 20% respectively, shift to investing solely in stocks. I imagined a typical institutional investor saying the following: "A small portion of our investments is allocated to fixed income.
I can't say why —it's a historical accident. My predecessor created this, but his reasons are lost in the past. Now we are reviewing our bond holdings with the goal of reducing them." Although interest in buying more stocks has remained low during the current decade, little money has been invested in high- credit-quality bonds.
The continued decline in the popularity of bonds was caused, among other things, by the Fed's Greenspan decision to keep interest rates low to stimulate the economy and combat exogenous shocks such as the Y2K panic. (U.S. Treasury bonds) And those with high credit quality yielded between 3% and 4%, so they didn't generate much interest from institutional investors seeking 88% returns.
As the process described above lasted a sufficient period, investors reduced their holdings. The bonds were already positioned for OB (Overall Business) yields, which was enough in the environment, and there was an increase in the desire for security in relation to the asset of the bonds. And note that they don't quit these types.
This is a pattern that usually generates profits for those who discover it before others. Reasonably priced assets are never our objective, since it is reasonable to conclude that they generate only fair returns for the risk assumed. And of course, overpriced assets do us no good. Our objective is to find assets that are underpriced.
Where should we look for them? A good place to start is among things that are little known and not fully understood. They are fundamentally questionable at first glance. They are controversial, inappropriate, or frightening. They are considered unsuitable for respectable portfolios. They are not appreciated.
Unpopular and unloved assets have a history of poor returns and have recently been the subject of divestment, not accumulation. To summarize everything in just one sentence, I would say that the necessary condition for the existence of bargains is that the perception is considerably worse than the reality.
This means that the best opportunities are usually found in what most other people don't do. After all, when everyone feels good about something and is happy to participate, the price certainly won't be a bargain. In 1978, when I left the equity research segment at DCE Bank and moved into portfolio management, I was fortunate enough to be invited to work with asset classes that met some or all of these criteria.
My first job was in convertible assets. It was still a much smaller and more underestimated market than it is today, since these assets offered investors both the advantages of bonds and stocks. They were issued only as a last resort by weak companies without alternatives, such as conglomerates and railway and airline companies.
Major investors felt that this market brought unnecessary complexities. If people want assets with the characteristics of... When considering both bonds and stocks, one might question why not buy some bonds and some stocks, and if the company appeals to them, why not buy the stock and receive its full yield instead of investing in a hybrid, defensive vehicle?
Whenever everyone believes something has no merit, it's reasonable to suspect that this object is not appreciated, that nobody wants it, and therefore that its price is possibly underestimated. That's why a 1984 Business Week article about me included the following phrase: " Real men don't buy convertible assets, so scaredy-cats like me can buy cheap." In 1978, I was asked to create a high-yield bond fund.
These bonds, burdened with the unpleasant nickname of speculative bonds or, literally, " rotten bonds," fell short of the minimum requirements of most investment institutions. That is, they didn't even reach investment grade or better, or an A rating. Speculative bonds can become defaulted. So how could they be appropriate assets for pension funds or university endowments?
What if a fund bought a bond... A company with a speculative grade risked default, and if it went bankrupt, how could the managers escape the embarrassment and guilt of doing something they knew beforehand to be risky? A good clue to the potential of these assets could be found in the description that a rating agency offers for securities with risk ratings A and B.
A generally do not possess the characteristics of a desirable investment at this time. You must be wondering how someone is able to disapprove of an entire possible class of investments without making any reference to the price. The history that followed regarding these securities shows that if no one owns something, the demand for the object, and therefore the price, can only rise, and B, by ceasing to be taboo and becoming minimally tolerated, can offer a good return.
Finally, in 1987, my partners Bruce and Kichel Stony came to me with the brilliant idea of creating a fund to invest in debt securities of companies in distress. What could be more improper and less respectable than investing in securities of bankrupt companies or those on that path? Who would invest in companies that have already demonstrated their lack of financial viability and the weakness of their management?
How could anyone? Investing responsibly in companies in freefall is clear. Given how investors behave, any asset considered the worst at a given moment has a good probability of being the cheapest. There is no necessary synonymy between bargains and high quality; in fact, things tend to be cheaper when the low quality of assets drives people away.
Each of these asset classes satisfied most of the criteria listed earlier in this chapter. They were little known, not understood, nor respected; nobody had anything good to say about these assets. All the securities were examples of uncomfortably peculiar and reckless investments, agreeing with what David Svensen said (see Chapter 11).
Therefore, they all became a great place to be for the next 20 or 30 years. I hope these large- scale examples give you a good idea of where bargains can be found, since bargains offer value at unjustifiably low prices and therefore unusual return-to-risk ratios. One could say they represent the holy grail of investors, according to the reasons specified in the chapter.
These opportunities should not exist in an efficient market; however, everything in my experience tells me... While bargains aren't the norm, the forces that should eliminate them often fail to do so. We are active investors because we believe we can beat the market by identifying the best opportunities.
On the other hand, many of the special opportunities offered to us are too good to be true, and avoiding them is essential for success in investing. As with so many other things, it's necessary to balance the optimism that leads someone to become an active investor with the skepticism that emerges from the efficient market hypothesis.
Obviously, investors can make mistakes due to some psychological weakness, an analytical error, or a refusal to venture into unfamiliar territory. These missteps create bargains for second- level thinkers capable of seeing the flaws in others.
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