This Odd Lots podcast episode features an interview with Howard Marks, co-founder and co-chair of Oaktree Capital Management, a renowned credit investor who accurately predicted the dot-com bubble. The hosts and Marks discuss his observations of the late 1990s and early 2000s, focusing on behavioral indicators of market exuberance rather than solely quantitative metrics. Marks emphasizes the importance of assessing current market conditions (not predicting the future) and adjusting investment strategies accordingly, shifting between aggressive and defensive postures based on market temperature. He cites his successful navigation of the 2008 financial crisis as an example of this approach, highlighting the crucial role of having "dry powder" (available capital) to capitalize on opportunities during market downturns. The conversation concludes with a discussion of whether current market conditions, particularly concerning AI-related stocks, represent a new bubble, with Marks expressing caution but not seeing the same level of irrational exuberance as in previous bubbles.
