The Outlook and Appropriateness of Value

In a market with such disparate upside opportunity and downside risk, it’s important to take a balanced, pragmatic view of economic factors. In the words of Howard Marks, co-founder and co-chairman of Oaktree Capital Management, “we have to consider the outlook and the appropriateness of value, in the context of unprecedented uncertainty and the total absence of guidance from analogies to the past.”  From the perspective of financial investing, we are less concerned with what is going to happen, and more concerned with how future reality compares to current market expectations. 

In this framework, it’s helpful to take stock of potential scenarios and what they could mean for equity and bond valuations, as Howard Marks describes in his latest memo: https://www.oaktreecapital.com/insights/howard-marks-memos