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Thinking About Macro

All Rights Reserved Follow us: Memo to: Oaktree Clients From: Howard Marks Re: Thinking About Macro For a piece of information to be desirable, it has to satisfy two criteria: it has to be important, and it has to be knowable. – Warren Buffett Regular readers of my memos know that Oaktree and I approach macro forecasts with a high degree of skepticism., Back in the 1970s, an elder told me, “an economist is a portfolio manager who never marks to market,” and that description still seems highly appropriate.

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Coming into Focus_TC

PCQ 1Q2024

” – 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 d i d n ’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.”

Returns and How They Get That Way

Memo to: Oaktree Clients From: Howard Marks Re: Returns and How They Get That Way "Where do babies come from?"

Bull Market Rhymes

All Rights Reserved Follow us: Memo to: Oaktree Clients From: Howard Marks Re: Bull Market Rhymes While I employ a great many adages and quotes in my writings, my main go-to list consists of a relatively small number.

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The Pendulum in International Affairs_TC

More on Repealing the Laws of Economics

All Rights Reserved Follow us: Memo to: Oaktree Clients From: Howard Marks Re: More on Repealing the Laws of Economics Last September, I wrote a memo titled Shall We Repeal the Laws of Economics?

Performing Credit Quarterly 2Q2022: Shifting Gears

Consequently, the yield on the 10-year Treasury note fell by 45 bps between June 13 and June 30, while yield spreads widened across credit asset classes.1 As we assess recession risk and how an economic downturn might impact credit markets, we’re reminded of something Howard Marks recently wrote in his memo Bull Market Rhymes : The price of an asset is based on fundamentals and how people view those fundamentals.

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