Howard Marks Warns “Nobody Knows What Will Happen”

Howard Marks, Co-Chairman of the US investment firm Oaktree Capital warns that valuations in the financial markets are uncomfortably high and that investors are acting too complacent.
When Howard Marks speaks, financial markets listen. The renowned value investor and co-founder of Oaktree Capital looks back at almost fifty years on Wall Street and has seen a thing or two during his successful career. His Memos from the Chairman, which he sends sporadically to Oaktree’s clients are a must read for investors.
Mr. Marks welcomes the journalists in his corner office on the 34. floor in Midtown Manhattan with a partial view over Central Park: On the wall hangs a huge, gloomy oil painting showing two sailing ships in a severe storm. On the couch table lies a heavy volume with old issues of the New York Times from October 1929: the month of the historic stock market crash.
Today, Howard Marks is concerned. He sees growing complacency in the financial markets, high valuations and investors mindlessly shouldering bigger and bigger risks. He warns that central banks have distorted the risk curve and that we have no idea about what’s going to happen next, when they start to unwind their extreme policy measures. But one thing he knows for sure: As long as people are involved in the process, and given their tendency to take everything to the excess in the upward or the downward direction, there never will be permanent moderation.
Mr. Marks, you often write in your memos how important it is to know where we are in the cycle. So where are we today?

This post was published at Zero Hedge on Oct 2, 2017.