ZM - Bill Nygren Market Commentary - 4Q20

• At Oakmark, we are long-term investors. We attempt to identify growing businesses that are managed to benefit their shareholders. We will purchase stock in those businesses only when priced substantially below our estimate of intrinsic value. After purchase, we patiently wait for the gap between stock price and intrinsic value to close.
• After these calculations are figured in, we are paying $208 for core Facebook/Instagram with consensus estimates of $12 in 2021—a P/E of only 17x. For a high growth, strong cash generator like Facebook, an adjusted P/E of less than the S&P 500 strikes us as a bargain.
• We think that, across industries, the dominance of digital will continue because it is more convenient and there’s little incentive to revert to the old way of doing things.
• Did travel fall because consumers found a superior alternative? No. Therefore, we expect leisure travel to strongly rebound and think lots of trips cancelled in 2020 were just deferred. Since unused vacation days often carry over, leisure travel might even rebound to an above-trend level after restrictions are lifted.

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