Why Oaktree’s Howard Marks Is on the Watch for a Market Bubble
Lofty valuations in big tech and parallels with the dotcom crash.
Howard Marks, co-chairman and co-founder of Oaktree Capital Group.
Photographer: Jeenah Moon/BloombergThe run-up in Big Tech stocks and all the hype over AI has put a bunch of investors on "bubble watch." One of those is Howard Marks, the co-founder and co-chair of Oaktree Capital Management. Howard is one of the most famous credit investors in the world, but he has experience in stock market bubbles too. Back in early 2000 — right before the Nasdaq peaked — he pointed out the frothiness in equities in a famous note titled "Bubble.com." So how does he actually spot a market bubble? How does a bubble differ from a bull run? And what is he seeing right now? We chat with Howard about all these things, including his experiences both in 2000 and during the 2008 subprime crisis. This transcript has been lightly edited for clarity.
Key insights from the pod:
Howard’s experience of the dotcom bubble — 1:46
On publishing the Bubble.com memo — 6:57
Behavioral indicators for spotting bubbles — 10:06
How Oaktree navigated the subprime bubble — 13:52
The difference between a bull market and a bubble — 24:56
Today’s tech cycle versus the dotcom era — 29:32
A sea change in finance — 41:17
The impact of higher interest rates — 46:21