Gimme Credit

In this memo, Howard Marks addresses the question of whether current credit spreads are sufficient compensation for taking on credit risk.

He explains that the key consideration should be whether today's spread is adequate to offset expected credit losses, rather than focusing on whether spreads are historically narrow.

Marks expresses his belief that the elevated yields offered by credit present a better investment opportunity than equities at current spreads, while also cautioning about potential risks in the private credit market.