Interview, Fireside Chat, Conference Presentation
Investing with Oaktree Capital Management’s Howard Marks
- Market cycles suggest opportunities for wealth creation arise when acting as buyers during periods of dislocation, with some investments currently attractively valued despite not all assets being undervalued.
- Difficulties in maintaining investment conviction are expected while markets remain challenging, though a partner with complementary skills is anticipated to help navigate the most difficult parts of the cycle.
- Historical outcomes indicate markets will recover from panic rather than result in catastrophic outcomes, with the current tech environment expected to feature more companies with proven business models than during the previous crisis.
- Public markets are expected to discount valuations more significantly than private markets; if this divergence continues, private assets are expected to eventually decline to catch up, potentially making public assets cheaper than private ones.
- Buying assets during "sales" is expected to enable investors to act rather than become paralyzed, and a lower price relative to another asset suggests the cheaper asset is expected to perform better in the future.
- The "Nifty Fifty" group of companies is expected to have underperformed the S&P 500 by 30 percent from September 2020 to the present.
- Current market forces are expected to have corrected excess optimism and risk-taking, restoring a reasonable balance after bull factors had ruled for a long period.
- Factors that delivered the best returns in 2020 are expected to return to earth as bullish influences become out of balance.
- Writing memos and sharing insights is expected to incur no long-term financial cost despite potential short-term expenses.