The Memo by Howard Marks Nobody Knows (Yet Again)
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Apr 9, 2025 The discussion dives into the unpredictable impacts of tariffs on the global economy, reflecting a shift in longstanding norms. Howard emphasizes the uncertainty in forecasting, suggesting that market reactions to these events may not be justified. He recalls the chaos of Lehman Brothers' bankruptcy and draws connections between past crises and current economic challenges. The talk navigates the complexities of government interventions, highlighting potential risks like recession and inflation, while also identifying investment opportunities in distressed assets.
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2008 Financial Crisis
- During the 2008 financial crisis, Howard Marks wrote "Nobody Knows" advocating for investing amidst uncertainty.
- He reasoned that inaction is also a choice, and crises breed opportunity.
COVID-19 Pandemic
- In 2020, Howard Marks published "Nobody Knows 2" about the COVID-19 pandemic, highlighting the lack of prior analogous experiences.
- Decisions were based on speculation due to the absence of facts or comparable situations.
Forecasting Limitations
- Forecasts are not enough; assess their probability of accuracy.
- Recognize that unprecedented unknowns make forecasts less reliable, especially in complex situations.