Oaktree’s Howard Marks spoke with Stephanie Ruhle and David Westin on Bloomberg TV’s “Bloomberg <GO>” on how the presidential election and Trump are scaring investors. He also discussed his bet on Jeffrey Gundlach’s upstart investment firm, DoubleLine Capital.

On how the presidential election is impacting markets, Marks said: “They’re scaring the hell out of people.” Of Trump he added: “Donald says, the Chinese are killing us. The Mexicans are killing us. The Japanese are killing us. But we’re going to get the jobs back. And I think that people tend to believe him…The others compete to be equally fearful and dramatic.” http://bloom.bg/1otASm4

On Oaktree’s nearly $1 billion gain from his stake in Gundlach’s DoubleLine Capital, Marks said: “We had no reason to expect that it would go as well as it did…DoubleLine has been probably the greatest success story for a new money manager.”

On recent market volatility, Marks said: ” I think that volatility is normal, fits of volatility…The last six weeks in the stock market have been one of those moments of terror. But it’s normal. The reasons are not quite normal.”

Oaktree’s Howard Marks: Fits of Market Volatility Are Normal

Oaktree Capital Group co-chairman Howard Marks discusses the volatile markets and his investment thoughts. He speaks on “Bloomberg ‹GO›.” (Source: Bloomberg)

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Separating Superior Investors From Fearful Ones

Howard Marks, co-chairman at Oaktree Capital Group, discusses not relying on cues from the market, the success of Jeffrey Gundlach, and concerns over mutual fund redemptions. He speaks on “Bloomberg ‹GO›.” (Source: Bloomberg)

Tech Lines Up Behind Apple in Government Data Fight

Howard Marks, co-chairman at Oaktree Capital Group, and Bloomberg’s Tom Giles and Tim Higgins examine Apple’s fight with the FBI over access to data on the iPhone of one of the shooters involved in the San Bernardino, California terror attack. They speak on “Bloomberg ‹GO›.” (Source: Bloomberg)

Howard Marks

Partial Transcript

STEPHANIE RUHLE: Howard what do you make of this recent market volatility? Is this part of a normal cycle? Or does it seem, Mohamed El-Erian has said we’re in a perfect storm. That doesn’t seem like a normal cycle.

Howard Marks: Well Stephanie I think that volatility is normal, fits of volatility. I wrote a memo recently and I talked about my friend Sandy the airline pilot who describes his job as hours of boredom punctuated by moments of terror. And that is the description of the investor’s job. And–

RUHLE:  One more time, hours of boredom interrupted by moments of terror.

Howard Marks:  Exactly.

RUHLE:  That’s how you describe investor life?

Howard Marks:  Well I think that’s right. And this is one of the, you know the last six weeks in the stock market have been one of those moments of terror. But it’s normal. The reasons are not quite normal. We have kind of one off. I think that people have gotten used to dealing with normal economic cycles, recession, recovery, et cetera. But we have now kind of cosmic issues that people don’t have any experience dealing with and don’t know how.

RUHLE:  What?

Howard Marks:  China, oil, rates, terrorism are just four examples.

RUHLE:  Is the fear exaggerated or punctuated by the presidential election? When you see Donald Trump up there, you know, dare I say putting fear in the US economy, really speaking in such declarative statements about the disastrous situation that we’re in, does that affect the markets?

Howard Marks:  I can’t tell you definitively because I don’t have any research on that subject, but I would guess so. They’re scaring the hell out of people. And Donald says, the Chinese are killing us. The Mexicans are killing us. The Japanese are killing us. But we’re going to get the jobs back. And I think that people tend to believe him.

Then the others compete to be equally fearful–

RUHLE:  Dramatic.

Howard Marks:  And dramatic. They can’t, it’s very hard for them to compete with him by saying no, the latest information from the Commerce Department says it’s not true. They don’t want to hear that. His stuff is much more attention–

RUHLE:  Headline worthy.

*********

RUHLE:  In 2009 you put $20 million into Jeff Gundlach’s investment firm. Clearly you didn’t do it because you were all LA guys, you wanted to help your neighbor.|

Howard Marks:  I know something.

RUHLE:  Ah, ah! There you go.

Howard Marks:  I’m talking about the market.

RUHLE:  That is now a billion dollar gain for you. So what did you know then that well clearly David and I didn’t?

(LAUGHTER)

Howard Marks:  Well first of all we had no reason to expect that it would go as well as it did. DoubleLine which Jeff formed in late ’09 has been I think probably the greatest success story for a new money manager. You know they’re at $85 billion under management I believe. Here we are just six years later.

But what I did know is that I knew that Jeff reported to me in my last at TCW, my previous employer before we formed Oaktree. So I knew the man. I knew how smart he was. I knew his partner Phil Barach. I knew how, what a great team they were. And I believed that they would be successful.

RUHLE:  OK so you believed that back in 2009. Today what are you passionate about, confident in? Because clearly you want to keep this return run going.

Howard Marks:  I’m much more confident about the past than I am about the future.

RUHLE:  Of course, we all are.

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