Bloomberg Talks Oaktree Capital Management Co-Chairman Howard Marks Talks Stock Valuations
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Aug 20, 2025 
Howard Marks, Co-Chairman of Oaktree Capital Management, shares his thoughts on stock valuations, declaring them expensive in relation to fundamentals. He delves into how psychological factors influence investor behavior, especially during downturns. Marks draws parallels to the 1997 market, discussing the risks of 'irrational exuberance.' He emphasizes the cautious sentiment in the tech sector and highlights the advantages of focusing on credit investments, alongside the dynamic U.S. market landscape despite high valuations. Insightful commentary on navigating these turbulent waters!
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Elevated Valuations vs. Fundamentals
- Howard Marks argues stocks look expensive relative to fundamentals and reality today.
- He attributes this to 16 years without a serious correction, which dulls investors' caution.
The Big Investor Mistake
- Marks says the biggest investor mistake is assuming current conditions will persist forever.
- He warns that reversion to the mean is much more likely than permanent continuation of recent trends.
Late-1990s Tech Parallel
- Marks recalls the late-1990s tech run as a comparable period when valuations soared despite warnings.
- He notes the market kept rising for years after 1997, so early signs don't mean an immediate crash.