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Getting Through the Matrix: Staying Disciplined in an Evolving High Yield Bond Market

Howard Marks, our co-chairman, and Sheldon Stone, a pioneer of high yield bond investing, developed this tool more than 30 years ago.

Fewer Losers More Winner

The Calculus of Value

All Rights Reserved Follow us: Memo to: Oaktree Clients From: Howard Marks Re: The Calculus of Value On July 28, I flew to South America on a plane without Wi-Fi, leaving me without email or entertainment.

Performing Credit Quarterly 1Q2023: Flight Risk

As our co-chairman Howard Marks noted in his most recent memo: When investors think things are flawless, optimism rides high and good buys can be hard to find.

Random Thoughts on the Identification of Investment Opportunities

A l l R i g h t s R e s e r v e d URandom Thoughts on the Identification of Investment Opportunities Howard S., Marks -- January 24, 1994 1.

What Really Matters

More on Repealing the Laws of Economics_TC

On Bubble Watch

All Rights Reserved Follow us: M emo to: Oaktree Clients From: Howard Marks Re: On Bubble Watch Exactly 25 years ago today, I published the first memo that brought a response from readers (after having written for almost ten years without receiving any)., (Emphasis added) For me, it’s psychological extremeness that marks a bubble.

Performing Credit Quarterly 1Q2024: Unusually Uncertain

” – Howard Marks, recent market outlook for clients The market rally that began roughly five months ago recently stalled, primarily due to stickier-than-expected inflation and indications that the U.S. may get two or fewer interest rate cuts in 2024, as opposed to the six investors were pricing in earlier in the year – risks we highlighted in January when we noted that “the prevailing market narrative for the coming year demands a level of optimism that may be bordering on credulousness.”, High yield bond spreads are still hovering around the low end of their normal range, over 35% of U.S. leveraged loans are trading above par, and the S&P 500 Index is up over 20% in the last 12 months.1 How does one square the robust performance we saw in the five months through March with the uncertainty that our co-chairman Howard Marks is describing above?, We didn’t point this out because we thought the market was set to experience a meltdown; we highlighted it because – as Howard has long said – “no matter how good the fundamental outlook is for something, when investors apply too much optimism in pricing it, it won’t be a bargain.”, In other words, the opportunity cost of patience appears to have declined. (3) Investors should focus on long-term trends in interest rates, not short-term changes We’ll conclude with a quote from Howard Marks’ recent note to clients: This is a good time for me to issue a reminder that the Fed’s individual interest rate manipulations are an example of short-term events that lack long-term significance.

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