market folly

Oaktree Capital's Chairman Howard Marks is out with his latest commentary. His letters are read regularly by the likes of legendary investors Warren Buffett and Seth Klarman. Marks also has a new book out entitled, The Most Important Thing.

Marks' prior letter addressed the debt ceiling and his latest missive tackles the question of what's caused the recent downturn in markets. He argues that all the signs for the downturn existed well before the actual decline took place.

When it comes to "double dips" in the economy, Marks doesn't know how people reach firm conclusions on such a scenario. Instead, he offers Oaktree's approach:

"For our purposes, it suffices that we have operated since the financial crisis under the assumption that the recovery would be sluggish, rather than V-shaped. We still feel that way. And that feeling is inconsistent with moving out on the risk curve or down in credit quality, investing more in cyclicals or taking on leverage."

Embedded below is Howard Marks' & Oaktree Capital's latest commentary: What's Behind the Downturn? (email readers come to the site to view it)



For more investing insight from this successful hedge fund manager, check out Marks' book.

For other recent hedge fund letters, head to our post on how Bill Ackman bought $600 million worth of investments recently as well as Perry Capital's thoughts on European markets.