Oaktree’s Marks Says Worst Likely Still to Come for Asset Prices
- Veteran investor sees recent market rally as overly optimistic
- U.S. distressed debt has quadrupled to nearly $1 trillion
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Oaktree Capital Group co-founder Howard Marks says he expects asset prices to extend their declines, and that the market rebound in recent days doesn’t account for how much worse the fallout from the coronavirus outbreak could potentially be.
“Assets were priced fairly on Friday for the optimistic case but didn’t give enough scope for the possibility of worsening news,” he wrote in a Tuesday note to clients. “You may or may not feel there’s still time to increase defensiveness ahead of potentially negative developments. But the most important thing is to be ready to respond to and take advantage of declines.”