Weitz Quarterly Connection, Q4 2021
In the Q4 2021 Quarterly Connection, client portfolio manager Yana Morgan, CFP® provides an update on our current views on the markets and expectations going forward, followed by a Q&A with our founder, co-CIO, and portfolio manager Wally Weitz, CFA.
- Review of fund performance
- Thoughts on some key economic factors
- Q&A with Wally Weitz
For any additional questions, feel free to contact our client services team at email@example.com or 888-859-0698.
View video transcript here.
A note from Wally:
During our recent Quarterly Connection, a client asked a question about when we might see the “inevitable” market correction. As I've given this question some more thought, there are a few things that I would like to add.
A correction may already be underway. I think we tend to think about the S&P 500 or other major indices when talking about “the market,” but as we've discussed many times, capitalization-weighted indices like the S&P and Russell averages are skewed by the performance of their largest components. Recently, a major brokerage firm's memo stated that, with the Russell 2000 within 3-4% of its all-time high, 50% of its components are at least 20% off their own highs, and 20% are down by 50% or more from their all-time highs. I have not done the research on the S&P 500 or other indices, but I suspect they would also show the same deterioration under the surface, obscured by the strong performance of a handful of mega-cap performers.
A number of our favorite companies' stocks have languished lately. This is normal and gives us a chance to recycle capital from the popular to the wallflowers. In a more general decline, when forced selling and panicky shareholders head for the exits, everyone's stocks seem to go down together, and we register paper losses. But the good businesses come through, and their stocks recover. Staying calm and patient is the best response.
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Roper Technologies, Inc., operates a wide variety of businesses that create software and engineered products for niche markets. Its focus on identifying and acquiring high-quality businesses has facilitated growth and strong returns on its investments over time. Roper sits high on our quality score matrix, making it an attractive company to own at the right price.
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The opinions expressed are those of Weitz Investment Management and are not meant as investment advice or to predict or project the future performance of any investment product. The opinions are current through the date of publication, are subject to change at any time based on market and other current conditions, and no forecasts can be guaranteed. This commentary is being provided as a general source of information and is not intended as a recommendation to purchase, sell, or hold any specific security or to engage in any investment strategy. Investment decisions should always be made based on an investor's specific objectives, financial needs, risk tolerance and time horizon.
Consider these risks before investing: All investments involve risks, including possible loss of principal. These risks include market risks, such as political, regulatory, economic, social and health risks (including the risks presented by the spread of infectious diseases). In addition, because the Fund may have a more concentrated portfolio than certain other mutual funds, the performance of each holding in the Fund has a greater impact upon the overall portfolio, which increases risk. See the Fund's prospectus for a further discussion of risks related to the Fund.
As of 09/30/2021, the following portfolio company constituted a portion of the net assets of Balanced Fund, Hickory Fund, Partners III Opportunity Fund, Partners Value Fund, and Value Fund as follows:
- Amazon.com, Inc. (AMZN): 0.0%, 0.0%, 3.1%, 0.0%, and 2.8%.
- Alibaba Group Holding Ltd — ADR (BABA): 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
- Alphabet, Inc. — Class C (GOOG) (Google parent company): 2.3%, 0.0%, 6.3%, 7.2%, and 7.4%.
- Berkshire Hathaway Inc. — Class B (BRK.B): 2.1%, 0.0%, 9.5%, 5.1%, and 4.5%.
- Block, Inc. (SQ) (Square parent company): 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
- CarMax, Inc. (KMX): 0.0%, 4.2%, 2.0%, 3.5%, and 2.9%.
- China Evergrande Group (EGRNF): 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
- DiDi Global, Inc. — ADR (DIDI): 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
- Dun & Bradstreet Holdings, Inc. (DNB): 0.0%, 2.5%, 2.7%, 1.6%, and 0.0%.
- Laboratory Corp. of America Holdings (LH): 2.2%, 5.5%, 4.4%, 3.9%, and 3.5%.
- Mastercard, Inc. (MA): 1.6%, 0.0%, 4.4%, 3.3%, and 3.6%.
- Meta Platforms, Inc. (FB) (Facebook parent company): 0.0%, 0.0%, 4.8%, 3.5%, and 4.7%.
- Plaid, Inc. (JPY): 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
- Tencent Holdings ADR (TCEHY): 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
- The Charles Schwab Corp. (SCHW): 2.1%, 0.0%, 3.7%, 4.4%, and 4.3%.
- Uber Technologies, Inc. (UBER): 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
- Vulcan Materials Company (VMC): 1.7%, 2.4%, 1.2%, 3.6%, and 3.4%.
- Visa, Inc. (V): 1.7%, 0.0%, 4.8%, 3.9%, and 4.0%.
Holdings are subject to change and may not be representative of a Fund's current or future investments.
References in this video to particular companies are for illustration only and are not a recommendation to buy or sell any security.