Howard Marks Investor Memo: ‘Is it different this time?’ Marks runs through nine popular memes in markets that capture the ‘this time is different mood’. These include, there doesn’t have to be a recession, fiscal deficits can grow without becoming problematic, and interest rates can remain lower for longer. Each of these he treats with due scepticism. For example, on low-interest rates, he argues that 2007 was a similar period to today and that then neutral rates were around 5% (what’s changed?). And what if inflation rises or deficits do start to finally matter. The common thread through all these memes is that they are optimistic. Marks argues that this mindset is historically related to periods of high investment risk. That translates to simple advice: it’s much better to buy when few people believe things will get better.
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