- Howard Marks trumpeted value stocks and high-quality growth stocks.
- The Oaktree chief is bearish on bonds and bullish on US economic growth.
- Marks is keeping an open mind on bitcoin’s value.
- See more stories on Insider’s business page.
Billionaire investor Howard Marks touted pandemic-hit stocks as potential bargains, suggested growth stocks could serve as hedges against inflation, and said he was open-minded about bitcoin in a CNBC interview this week.
The Oaktree Capital Management co-chairman also dismissed bonds, argued the US economy has begun a new growth cycle, and underscored the difficulty of finding distressed assets with so much federal aid and liquidity in markets.
Here are Marks’ 9 best quotes from the interview, lightly edited and condensed for clarity:
1. “I’m never positive about anything.”
2. “The most opportunity is always found in the things other people are ignoring.”
3. “If you can find companies that have been penalized for their difficulties in the pandemic and the penalty was overdone and the difficulties are temporary, I think that’s a good sector right now.”
4. “Any company that has difficulties in this environment deserves to be distressed. The bailouts have been generous, the liquidity has been rife, and the default rate in 2020, which was predicted to get into middle teens, didn’t even reach half that.”
5. “Bonds may be fairly valued relative to stocks, but with yields of 1%, 2%, 3%, it’s hard to justify inclusion in portfolios. Nobody thinks they’re going to get the returns they need in the institutional realm just from stocks and bonds.” – arguing a portfolio split of 60% stocks and 40% bonds doesn’t do the job currently, and alternative assets are needed.
6. “We expect that there will be a recession once in a while. I believe last year’s recession was that recession for that cycle, and that we have commenced a new upcycle.”
7. “The fear is of an overheated economy that produces inflation and thus, calls for higher interest rates. I think that the great tech stocks, the great growth stocks, can offset inflation through their growth, but you have to pick the right ones.”
8. “I’m opening my mind on bitcoin. I was ‘knee-jerk’ skeptical.”
9. “While bitcoin doesn’t have an intrinsic value, the same can be said of the dollar and many, many other things that have value like paintings and diamonds. I’ve been more sensitized to the supply-demand case.”