market folly

Oaktree Capital Chairman Howard Marks has released his latest memo entitled "The Seven Worst Words in the World."  He starts the memo with a reminder that his new book comes out next week: Mastering the Market Cycle: Getting the Odds on Your Side.  His first book was excellent, so we're looking forward to this one too.

The words he's referring to in the title of his latest memo are: "Too much money chasing too few deals."  He uses this quote as a starting point for his thoughts on the market today.  Basically, he notes that the recovery from the recession with loose monetary policy has lasted ten years, and as such:

"While there certainly is no hard-and-fast rule that limits economic recoveries to ten years, it seems reasonable to assume based on history that the odds are against a ten-year-old recoverycontinuing much longer."

He feels the requirements have been met for a frothy market and has a cautious stance.  While he acknowledges things can go on for a bit longer, there are many conditions flashing warning signs.  Read on to ascertain why.

Embedded below is Howard Marks' latest memo, The Seven Worst Words in the World:



You can download a .pdf copy here.

Be sure to also check out Howard Marks' brand new book that is coming out: Mastering the Market Cycle: Getting the Odds on Your Side.