Howard Marks published a new memo dated Jan 23 and there are some interesting remarks regarding the current environment.
One of the key points is that Marks refuses to be bullish or bearish regarding markets at the moment, but while he recommends caution in current environment, he also states that the most important thing is always to think about risk and have a good understanding of the price you pay in regards of the value you expect to get.
A couple of quotes in the memo are worth underlying.
« Some people are excited about the fundamentals, and others are wary of asset prices. Both positions have merit, but as is often the case, the hard part is figuring out which one to weight more heavily. »
« I would favor the defensive or cautious part of the spectrum. »
« I’m convinced that easy money has been made. »
« Prospective returns are well below normal for vitually every asset class. Thus I don’t see a reason to be aggressive. »
« Asset prices and prospective returns are worrisome, but psychology and its implications – as well as timing – are unpredictable. »