HOWARD MARKS: There Is One Thing I Want To Know When I Look At An Investment
In an interview with Bloomberg TV, Marks said there is one thing in investment that he'd like to know about.
"It does all come down to confidence and optimism.
If I could know one thing in looking at investment, I'd like to know how much confidence is in the price. I want to buy when confidence is low that's when price is low relative to value, when confidence and optimist high, price is high relative to value and that's a dangerous time."
Marks went on to say that today's financial conditions are summed up by something he wrote in 2007:
"Today's financial market conditions are easily summed up: there's a global glut of liquidity, minimal interest in traditional investments, that's stock and bonds, little apparent concern about risk and skimpy prospective returns everywhere.
"Now I wrote that in February of 2007. I feel like we're going in that direction. In the last segment you used the expression the race to the bottom, I think it's on. I don't think we're there yet or that it was the last go around, but I think we have to be careful and when people are excited, when they're confident, when they're chasing return, moving out the risk curve to chase the return they want, and they forget to be careful, and my thing for today is to keep that in mind."
Check out the whole interview at Bloomberg.com.