FT: Howard Marks

The time is right to snap up “bargains” in financial markets following a widespread sell-off, according to Howard Marks, one of the world’s most formidable distressed debt investors.

“Today I am starting to behave aggressively,” the founder and co-chair of Oaktree Capital Management, said in an interview. “Everything we deal in is significantly cheaper than it was six or 12 months ago,” he added, highlighting drops in the prices of high-yield bonds, leveraged loans, mortgage-backed securities and collateralised loan obligations.

https://www.ft.com/content/a3f14c51-0b1c-416e-84db-0fa0fc842…

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See buying debt, is very different from buying equities. Now, the yield on debt may be attractive on many names, that may survive and may even outperform, is not necessarily translates into equity performing better.

For ex: WMT or SMFT 2000. When the stock sold off, their debt took a minor hit and anyone buying debt of those companies had outperformed, OTOH their equities just moved sideways for 20 years.

The time is right to snap up “bargains” in financial markets following a widespread sell-off,
according to Howard Marks, one of the world’s most formidable distressed debt investors.

I suspect it’s important to focus on the fact that he’s a debt investor, not an equity investor.

There do seem to be some odd movements in the debt markets, more than just the gentle slide you’d expect from inflation picking up.
Some Alphabet long bonds are trading at 65 cents on the dollar.
Yes, they were issued at near record low coupon yields, but that’s still surprising.

Jim

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