The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 20VC: Howard Marks on How COVID-19 Impacts Our Economy, Liquidity and National Debt, Why The Theory of Falling Knives and Market Bottoms is Wrong & Why The Best Investors Are Fundamentally Unemotional
Mar 30, 2020
Howard Marks, Co-founder and Co-Chairman of Oaktree Capital Management, shares his insights on navigating today’s economic turbulence. He discusses the distinct challenges posed by COVID-19, the long-term impacts of national debt, and strategies for maintaining liquidity. Marks emphasizes the importance of emotional discipline in investing, particularly during volatile times, and argues against the notion that we can always predict market bottoms. His reflections provide hope and clarity in the face of economic uncertainty.
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Howard Marks's Career Path
- Howard Marks's finance career started with a summer job at Citibank's investment research department.
- He transitioned from equity research to high-yield bonds and distressed debt, leading to Oaktree Capital's founding.
The Current Economic Crisis
- The current economic crisis involves a frozen economy and a liquidity crunch.
- Over-leveraged companies with low-quality assets face difficulties, unlike the 2008 subprime crisis.
Limited Economic Tools
- Governments have limited tools to stimulate the economy due to low interest rates and high national debt.
- Traditional methods like interest rate cuts and deficit spending are less effective.
