Howard Marks is the co-founder of the investment management firm in the US called Oaktree Capital Management. He is an author on financial markets, his most famous book being Mastering the Market Cycle. He is also a guru to many investment managers around the globe. He dispenses his thoughts and views on the financial markets via his memos published on the Oaktree Capital Management website. While I have not read any of his books so far, I am a subscriber to his memos (it’s free!). I can read not only the new ones, but can choose from the archive any of the previous ones.
So why are we talking about his memos now? Because his latest one is out on 19 March. If anyone is interested in knowing his views on how to navigate these market conditions, the memos are a good way to start. He tries to connect the dots on the current market and helps us make some sense of what is happening and how things can play out.
His latest memo is titled Flattening the Curve – the coronavirus pandemic curve. He briefly summarises the scenario till today and the pains in store going forward; it’s from the US economy’s point of view. But the same pains are applicable to all countries around the globe, esp. the cascading effects of the unemployment as businesses remain closed.
Meanwhile the equity markets all around the world have been yo-yoing up and down; more down and occasionally up. The individual investor’s dilemma is as always “Is it the right time to buy? Has the markets hit the bottom? Are further corrections in store?”
Here is what Howard Marks has to say…
“The bottom” is the day before the recovery begins. Thus it’s absolutely impossible to know when the bottom has been reached . . . ever. Oaktree explicitly rejects the notion of waiting for the bottom; we buy when we can access value cheap.”
No one can argue that you should spend all your money today . . . but equally, no one can argue that you shouldn’t spend any.
😀 The ball is back in our court !! Ultimately to invest or not depends on individual’s risk tolerance – his ability and willingness to take risk.
I have not read all the past memos; but from the ones I have read, the few I enjoyed the most were – “Everyone knows dated 26 Apr 2007“, “Growing the Pie dated 1 Apr 2019“, “On the other hand dated 26 Jul 2019“.
Check it out, it’s free and it clears up a lot of the clutter around.
Till next post, take care !!