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Howard Marks: “The World Seems More Uncertain that at Any Other Time in my Life”

The latest from Oaktree’s Howard Marks is a must read.  Unfortunately though, Marks is not particularly optimistic about the future.  As the headline states, he’s more uncertain than he ever has been.  That’s saying a lot for a guy who has masterfully navigated from pretty tough environments over a long and successful career managing money.  Here are some highlights (or lowlights I guess).

On the general macro outlook:

“It’s my belief that we’re going to see relatively sluggish economic growth in the US for a prolonged period of time.  My expectations for other developed nations, given their specific issues, are even less positive.”

On credit trends:

“Few debtors can tap the capitals markets to the same extend they could five or ten years ago.”

On confidence:

“Consumers were traumatized by the crisis of 2008….It could require significant healing before these influences abate.”

On potential bright spots:

“Potential economic pluses for exist, and they tend to be overlooked in downcast periods like today.  These include the incipient housing recovery; the possibility of energy self-sufficiency;the fact that US manufacturing has slimmed down and our Chinese competitors have seen costs rise; and the fact that the US still leads in higher education, creativity and entrepreneurship.”

The whole letter is very good.  Read it here.




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