Yesterday, we posted the full speech by Howard Marks at Barclays Conference. Today, we found a copy the presentation from Marks below is the full document.
The following is our rough coverage of the 2021 Sohn Investment Conference, which is being held virtually and features Brad Gerstner, Bill Gurley, Octahedron's Ram Parameswaran, Glenernie's Andrew Nunneley, and Lux's Josh Wolfe. Q1 2021 hedge fund letters, conferences and more Keep checking back as we will be updating this post as the conference goes Read More
What’s driving the markets?
- A great deal of money has been created to stimulate the world’s economies.
- Money has to go someplace.
- The central banks have lowered the return on Treasurys and other safe investments.
- This has caused people to look to risky markets for the returns they crave.
- The returns on risky assets have been good in recent years.
- Default experience has been unusually benign for four years.
- All things equal, psychology becomes more positive after markets rise.
Even though people may not be “thinking bullish,” many are “acting bullish.”
The price for pursuing safety appears high today, and the price for accepting risk has been low of late. This combination encourages risk-taking.
Choosing Your Direction
The U.S. economy is recovering
- Psychology is restrained
- Prices are moderate
- Safety is priced too high to pursue it to the exclusion of risk bearing
Howard Marks Barclays Global Financial Services Conference by ValueWalk.com