- Howard Marks described the market downturn as a rich opportunity for bargain hunters.
- The billionaire investor said he was rushing offers instead of waiting and trying to time the market.
- Marks dismissed macro forecasts and pointed to the strangeness of the current market backdrop.
Howard Marks trumpeted the bargains available in the current downturn, touted downed Chinese assets and warned against trying to time the market during a recent Interview with Bloomberg Surveillance.
The billionaire investor and co-founder of Oaktree Capital Management also cautioned against relying on macroeconomic forecasts, pointed to the particularity of the current market environment and asserted that skills matter much more in the alternative investment space than in the stock and bond markets.
Here are Marks’ top 9 quotes, slightly edited for length and clarity:
1. “When there’s euphoria, when there’s optimism, when there’s greed – it’s a very difficult climate for the value investor to find bargains. We are happier today than six months ago. I don’t know if we’re going to be happier in six months. The bargains will be more pronounced, but at least the flower is on the rose.
2. “We’re not market timers. We never sell to raise cash to prepare for a downside. And we never say, ‘It’s cheap today, but it will be cheaper in six months, then we will wait.’ If it’s cheap today, we buy it. If it’s cheaper in six months, we buy more.”
3. “Everyone worries when prices go down. But the flip side of deteriorating prices is that the potential returns for many asset classes are higher than they were a short time ago. of time. Again, a much better climate for the bargain hunter.”
4. “Macro forecasts are very important. The only problem is that they are rarely accurate.”
5. “Occasionally other parts of the world offer better deals. We have the best in the US, but the best usually don’t come cheap.”
6. “I’ve made my living for the past 50 years investing in things that others said were uninvestable: high yield bonds, distressed debt, emerging markets in 1998. When I hear people say China can’t invest, maybe that tells me there’s good business there, if everyone boycotts this sector.”
7. “In public asset classes like stocks and bonds, most of the return is determined by market performance. Which manager you have means a little more or a little less. “There’s not that gravitational pull to market return. What really matters is whether your manager is highly skilled and disciplined or not. (Marks cited private equity, distressed debt and real estate as examples of alternative investments.)
8. “These conditions are unlike any I have experienced.” (Marks pointed to the pandemic, Russia’s invasion of Ukraine, America’s economic rivalry with China, and historically low interest rates as four key drivers of today’s market.)
9. “Buffett always puts it best: When the tide goes out, we find out who was swimming without a bathing suit. When economic and financial conditions get tougher, we find out who did.
decisions and who made bad ones. We will see.”