20170929 Interview with Howard Marks

[kiwing100]

 

For those of you who follow Howard Marks of Oaktree Capital

 

https://www.fuw.ch/article/nobody-knows-what-will-happen/

[Parsad]

Terrific interview as always!  Thanks!

[Cigarbutt]

«Anyone who is not confused doesn’t really understand the situation.»

Count me in the confused and unable to explain camp.

As value investors, we are paid to take on uncertainty.

What is the long term price/premium for uncertainty these days?

 

Cumulative real growth, 2009-present

 

US GDP:                        16,70%

S&P 500:                      130,51%

Fed balance sheet:          332,20%

 

What, me worry?

[Guest Cameron]

«Anyone who is not confused doesn’t really understand the situation.»

Count me in the confused and unable to explain camp.

As value investors, we are paid to take on uncertainty.

What is the long term price/premium for uncertainty these days?

 

Cumulative real growth, 2009-present

 

US GDP:                        16,70%

S&P 500:                      130,51%

Fed balance sheet:          332,20%

 

What, me worry?

 

The Bridgewater research paper about Britain in 1950 is a great help, equity prices returned 10% annually during the 15 years. We are at about 10.8% over the last 8. Bonds returned flat much like they are today.

 

I'm still confused though.

Bridgewater4516.pdf

[Uccmal]

«Anyone who is not confused doesn’t really understand the situation.»

Count me in the confused and unable to explain camp.

As value investors, we are paid to take on uncertainty.

What is the long term price/premium for uncertainty these days?

 

Cumulative real growth, 2009-present

 

US GDP:                        16,70%

S&P 500:                      130,51%

Fed balance sheet:          332,20%

 

What, me worry?

 

lol, 

 

This is reasonably predictable.  At some point, markets will crash, there will be a recession, central bankers will drop interest rates, and another asset bubble will be born. 

 

My suspicion is the combined attempts to reduce central bank balance sheets, raise interest rates, and a rising price of oil will be the cause.  All these together will be enough to push the average consumer over the edge.  But it will get blamed on something else much more dramatic. 

[John Hjorth]

Agreed, a very good interview, and very much in line with the last issued memo from Mr. Marks.

 

The themes in the memo and Mr. Mark's doubts all add up to: "Proceed with caution" in the memo, like in the interview.

 

That's all good, but the real question is, how do you quantify/materialize that into your investing actions here and now at these market levels we experience right now [naturally based on your specific portfolio composition right now].

 

This weekend I have asked my self the question, what does it take to be eligible to use the phrase: "It's Deja Vu all over again!" in investing, while a crash is happening? I can't come up with any other answer than: "You have to have tried it, to find out if you're good at it."

 

I haven't [tried it].

 

Then I ask my self the question: "In which other professional discipline does it especially qualify by having tried to be spanked - other than investing and spanking?" Then I end up confused.

 

- - - o 0 o - - -

 

My favorite leisure activity in the weekends these days is to read old topics here on CoBF. The search feature on this board I actually call my Hubble Telescope. It's actually even better than the Hubble Telescope, because CoBF was folded out by Sanjeev, from nothing, 8 days before everything stopped contracting, and the whole messy thing butommed out.

 

So, in a sense, I can look back to just a bit before in time of the Big Bang. At least to me, it's better than reading a damn good book. Because I have never been there.

 

Personally, I will recommend this leisure activity to every board member, who started investing at least some time after the GFC [Like I have].

 

You can do the travel in time, simply by looking up Sanjeev's board profile, then by clicking on his posts, and then by chosing his first post. Then you just go from there on your own.