Howard Marks, co-founder and co-chairman of Oaktree Capital Management, tells Bloomberg Television that China offers investment opportunities.
“I’ve made my whole career buying assets that other people consider uninvestable and when you do that, you have a chance of getting a bargain,” he says. Marks also discusses his outlook for the US under Donald Trump’s second administration and overall market sentiment.
Why “uninvestable” is music to Marks’s ears
The headline from the interview is Howard Marks‘s stance on China. With Beijing rolling out stimulus to revive its economy and much of the investment world calling Chinese assets uninvestable, Marks said that word is music to his ears. He has made his career buying assets other people consider uninvestable, because that is where bargains live. Oaktree has held a China position for a long time and continues to invest there carefully. His framework is relative: the US situation is good but high-priced, while China has real fundamental questions but is bargain-priced, and investing is always a matter of relative choices. He is under no illusion that everything shunned is a bargain, only that the bargain pile is where you look.
On US stocks, he drew a careful distinction: valuations are high-priced, not overpriced, since overpriced is a judgment call about worth versus price. High prices tell him to be a little less aggressive and a little more defensive than usual, but not to get out. Getting out, he said, has mostly been a mistake across his 55 years in the business: either the market rises without you, or it falls and you forget to get back in. He is not a market timer or a macro forecaster; Oaktree works bottom-up, judging individual companies on whether they will grow and repay their loans, because the future is never clear enough to price with confidence.
He illustrated the timing trap with recent history. You could have predicted the pandemic in 2019, Russia’s invasion of Ukraine in 2022, or the Hamas attack on Israel, sold everything, been right about every event, and still lost a great deal of money. Being right about the world and being right about the market are different skills. He made the same point about Warren Buffett’s large stock sales: Buffett has taken hundreds of billions off the table because there is nothing to buy at these prices, but that represents a small percentage of his holdings, not a call to exit.
Asked about the incoming Trump administration, Marks declined to play fortune teller. Cabinet appointments were not confirmed, policies were unknown, and a president’s influence on markets is usually limited anyway. On the much-discussed Trump-Musk relationship, he called Musk brilliant but idiosyncratic, noted that talk of government efficiency has produced little for decades, and said the chain of reasoning from Musk’s government role to a better outlook for Tesla was too attenuated to invest on. Do not pile into a stock on a political narrative, in other words.
His closing advice was aimed at ordinary investors: take an almost passive approach, invest early, invest steadily, build a nest egg, and do not try to mastermind the short run. On Goldman Sachs’s projection of roughly 3 percent annual S&P 500 returns over the coming decade versus 10 percent historically, his translation was simple: moderate your expectations, keep investing, and calibrate rather than swing between all-in and all-out. That same discipline is what to do when the stock market is crashing.
Winchell House 
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