Marks: Be Selective in a Heated Market

  Last month, Bloomberg’s Erick Schatzker sat down with Howard Marks, co-chairman of Oaktree Capital, to discuss the fund manager’s investment approach. With respect to whether the now-stretched equity valuations make for what some are calling “treacherous” conditions, Marks comments, ” The riskiest thing in the world is to believe there’s no risk. When people talk about risk in the market, that’s a healthy thing.” According to Marks, however, there is an incongruity between words and actions. “The problem,” he said, “is that even though most people are not thinking bullish, most people are acting bullish.” Many people are still […]

A Sage Investor – Howard Marks – Shares His Wisdom: Part II

This is a continuation of yesterday’s post. Howard Marks is co-founder of Oaktree Capital Management and author of The Most Important Thing: Uncommon Sense for the Thoughtful Investor (2011). His thoughts, ideas and insights have become fodder for many of our blog posts as he is very willing to share them. In an interview with John Mihaljevic, CFA and Managing Editor of the newsletter The Manual of Ideas, Marks shares his views on many issues pertinent to the world of investing: Adjust your level of aggressiveness based on the environment. Marks argues that investors should “adjust your activities based on […]

A Sage Investor – Howard Marks – Shares His Wisdom: Part I

Howard Marks is co-founder of Oaktree Capital Management and author of The Most Important Thing: Uncommon Sense for the Thoughtful Investor (2011). His thoughts, ideas and insights have become fodder for many of our blog posts, as he is very willing to share them. In an interview with John Mihaljevic, CFA and Managing Editor of the newsletter The Manual of Ideas, Marks shares his views on many issues pertinent to the world of investing. The most dangerous thing to neglect is “risk consciousness.” Marks believes that the best accomplishment in investing is “making a lot of money with less-than-commensurate risk.” […]

Howard Marks talks Economy, QE and More

When it comes to investing in less efficient markets, Howard Marks (founder and co-chairman of Oaktree), has plenty of expertise. He also has plenty to say about the state of the economy and the factors influencing our financial outlook. In a recent Barron’s article, Marks shares his views: Central bankers can’t create economic progress; they can only stimulate activity temporarily. Rather, a nation’s productiveness (GDP) is the driver of long-term growth, which is independent of money supply or interest rates. If GDP is weak, a nation’s ability to provide above-average benefits to its workers is compromised. Regulation can’t produce prosperity. […]

How Current and Future Expectations Influence Stock Prices

Company performance and stock price performance, or outcomes, don’t always go hand and hand. In a very good article, Morgan Housel, economics and finance columnist for The Motley Fool, points out that predicting the future for stocks is harder than most people think. The performance of stocks are a function of future fundamentals (i.e. earnings and growth), but also “by performance within the context of expectations”. As Housel points out, one may actually predict future performance but predicting the “outcome” of that performance requires one to judge whether or not “current expectations are reasonable” and “what will future expectations be.” Judging […]