How Oaktree's Howard Marks Spots a Market Bubble

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Jan 27, 2025

Howard Marks, co-founder and co-chair of Oaktree Capital Management, is a renowned credit investor famous for his insights on market bubbles. In this discussion, he delves into how he identifies market bubbles compared to bull runs. Marks shares his experiences from the dot-com bubble and the 2008 financial crisis, highlighting the psychological impact of FOMO on investors. He also offers perspectives on the current Big Tech boom and AI investments, emphasizing the need for strategic thinking and risk assessment in today's volatile market.

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ANECDOTE

1990s Market Context

The 1990s were generally placid for credit investors, except for a few idiosyncratic events.
The decade's booming stock market, driven by the TMT bubble, wasn't favorable for bargain hunters.

INSIGHT

Importance of Current Assessment

Predicting market movements is unreliable; focus on assessing current conditions.
Being correct too early can be detrimental if you can't withstand market fluctuations.

ANECDOTE

Bubble.com Memo

Howard Marks' "Bubble.com" memo, published January 2nd, 2000, described the overheated market conditions.
The memo didn't predict a crash, but highlighted concerning behaviors.

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