- Oaktree's Howard Marks discussed stocks and bitcoin, and shared several tips for investors.
- The billionaire investor highlighted similarities between the current market and the mid-2000s bubble.
- Marks underlined the importance of managing risks, not panic-selling, and staying skeptical.
- See more stories on Insider's business page.
Howard Marks drew parallels between the current market and the asset bubble that preceded the global financial crisis, highlighted bitcoin's longevity, and argued rock-bottom interest rates may justify higher stock valuations, speaking during the latest episode of the "We Study Billionaires" podcast.
The billionaire cofounder and co-chairman of Oaktree Capital Management advised investors to carefully manage their portfolio risk, resist the urge to buy high and sell low, and be skeptical of grand claims.
Here are Marks' 12 best quotes, lightly edited and condensed for clarity:
1. "The pandemic was like a meteor hitting the Earth from outer space. The market decline was not born out of excess optimism. The recovery was not merely a bounce back from excess pessimism, it was the result of the greatest economic rescue effort in history." – arguing the past 18 months shouldn't be viewed as a traditional market cycle.
2. "There certainly are similarities that cause Jeremy Grantham and others to say 'bubble territory' and to blow the whistle of caution." – comparing the hype around several assets in 2006 to the current market boom.
3. "If investors can think of an asset class and say, 'Oh, for that, there's no price too high' – that's one of the greatest indications of a bubble."
4. "We have the lowest interest rates in history. That would simplistically argue for the highest asset valuations in history."
5. "I came out very strongly against bitcoin in 2017. I was extremely negative, I was extremely outspoken. I had a knee-jerk reaction to something new. Now I prefer to say, 'I don't know enough about it to have a strong opinion.'
6. "Bitcoin has been around now for a dozen years. If it's a flash in the pan, it's an awful long pan."
7. "One of the most important aspects of being a good investor is you try to set things up so that if things go your way, you do great. But if things don't go your way, you still do okay."
8. "Good investing is not a matter of buying good things but buying things well. And if you don't know the difference, then you shouldn't be doing much investing."
9. "Don't get in the way of the compounding machine. Just get out of the way. Don't screw it up."
10. "When you're in an area which is beset with uncertainty, variability, unpredictability, randomness, things like that – it just strikes me as folly to be confident that you know the future."
11. "Active investors are in this business to buy low and sell high. But everything in our nature conspires to make us buy high and sell low. It is essential to combat those instincts."
12. "Somebody comes into your office and says, 'I've been managing money for 30 years, I've made 11% a year, and I've never had a down month." Your job is to say, 'That's too good to be true, Mr. Madoff.'" – urging investors to always be skeptical of fantastic claims and promises.