- Howard Marks warns against making market forecasts, and says even the best investors make mistakes.
- The billionaire fund manager expects corporate defaults to surge, and hates debt-ceiling fights.
Howard Marks has warned against trying to predict the market, cautioned that many debt-laden companies are headed for trouble, and railed against lawmakers for their brinkmanship over the debt ceiling.
The billionaire investor and cofounder of Oaktree Capital Management also underscored that even industry icons like Warren Buffett make mistakes, and joked that his popularity at parties is directly tied to his fund's recent performance, during a recent episode of "Bloomberg Wealth with David Rubenstein."
Here are Marks' 8 best quotes, lightly edited for length and clarity:
1. "We never know where we're going, but we sure as hell ought to know where we are." (Marks said he avoids making forecasts, but he believes that analyzing the market today is helpful in preparing for what the future holds.)
2. "I agree with John Kenneth Galbraith, who said there are two kinds of forecasters: the ones who don't know, and the ones who don't know they don't know."
3. "You can't live on a shot of adrenaline every day for 13 years." (Marks slammed the Federal Reserve's policy of near-zero interest rates between 2009 and 2021, saying it subsidized borrowing and punished lending and saving.)
4. "When you go through a period when it's super easy to raise money for any purpose or no purpose, and you go into a period when it's difficult to raise money even for a good purpose, clearly many more companies are going to founder." (Several experts have warned steeper borrowing costs will lead to more loan defaults, pressure on asset prices, and tighter lending standards that will hammer the likes of small businesses and commercial real estate developers.)
5. "It's clearly worrisome. There's never been a bankruptcy of the US or a country like it, so we don't know what's going to happen. This business about using a default as a negotiating tool is very, very dangerous." (Marks was bemoaning the political skirmishes over raising the debt ceiling earlier this year.)
6. "We have the golden goose. We have this reserve currency status because the dollar is the safest currency in the world and the US economy is the best. Why would you jeopardize that?"
7. "Warren Buffett always talks about Ted Williams who batted .400. That means 60% of the time, he was out at the plate. The great investors are right 60%, 70%, maybe 80% of the time. If you're the kind of person who has to be right all the time, you shouldn't be in investing."
8. "When the markets are doing well, or when we're doing well, then people have that cocktail party conversation. When the markets are doing poorly, I just stand in the corner." (Marks was joking that nobody asks him for investment advice in a depressed market.)