Howard Marks – Equity Prices are Not in a Bubble

This article is based on a presentation from John Mauldin’s 2021 Virtual Strategic Investment Conference, which is being held from May 5 to 18. To register for this conference, click here. The Strategic Investment Conference was just approved by CIMA and CFP for 19 hours of continuing education credits.

Equity markets are not a bubble, according to Howard Marks. He expects six to nine months of very good economic news, followed by “decent” growth for several years.

Business cycles usually last nine years, but he said he is “hedging his bets” with a three-year prediction for economic growth.

Marks is the co-founder and co-chairman of Oaktree Capital Management, the largest investor in distressed securities worldwide. It has roughly $150 billion under management. He spoke on May 14 at this year’s Strategic Investment Conference, hosted by John Mauldin.

Marks does not place much value on warnings of market overvaluation that are based on metrics like retail investor participation, margin debt or the Buffett ratio.

Normally, when stocks are this highly priced, he said the economy is in the late stages of an expansion, and the future economic news is not so good. It may even foretell a recession.

That is not the case now.