저자: HowardMarks · 외국인
요약 보기
Marks는 AI 붐을 1999~2000 인터넷 버블과 비교하며, 기술은 세상을 바꾸지만 그것이 투자 수익으로 이어지는 것은 별개라고 주장한다. 버블은 대개 새로운 것에서 비롯되며 AI 관련 신생 기업 투자는 승자-패자 간 큰 리스크를 수반한다. 금은 현금흐름이 없어 분석적 가치평가가 불가능하고 비트코인도 마찬가지라고 본다. 장기 분산·균형 잡힌 투자와 감정 통제를 강조하며, 고수익 채권 같은 크레딧 자산이 대안이 될 수 있다고 언급한다.
다듬은 글
Tell us a little bit about pattern recognition and the ability to say, "That's one of them." And obviously there's a lot of interest right now in your perspective on the current investment environment. And I know you've been on a big trip around Asia etc for the last 3 weeks meeting with a lot of clients and I'm sure you hear a lot of these questions.
In August, you wrote an article called “Calculating Value,” where you said the market had gone from bullish to anxious. And I wonder, when you compare this period to, say, 1973-74, 1999-2000, or 2007-2008 , what rhymes with in terms of where we are on the pendulum between greed and fear, optimism and pessimism, risk tolerance and risk aversion?
And what makes you think that we're not in that extreme position yet, if that's still the case, that you don't think that we're most likely in that extreme position yet? Well, I don't follow the situation, so I don't know where we are today, this week, or wherever. But I think if you look for a comparison, the strongest comparison is not ideal, and I'm not saying that's true to some extent, William, but in nature the strongest comparison is to the TMT internet.com bubble of 98-99-2000.
The Nifty 50 was different in that it was not about one new technology, but mostly about established large companies. I mean, there were no technological wonders in the Nifty 50 that failed. And then the years 0567 with subprime mortgages and mortgage-backed securities, subprime mortgage securities cannot be compared because it was not a technological innovation that was a financial invention.
No one thought that subprime mortgages would change the housing business. The houses weren't damaged, they just said, well, we can make money by providing financing to a new class of buyers, which turned out to be a bad idea. People who have not documented their income or assets. So this can be compared to the Internet bubble.
You know, people said the internet would change the world. But you know what? And so it happened. Can you imagine the modern world without the Internet? He has completely changed in a million ways. Including the fact that we are talking about it. So it can be compared. This is a technological innovation that, in my opinion, will change the world.
But, as I recall, we had a clearer idea of how the internet would change the world. And the opinion of many in 1999 and 2000 became true. And I think a lot of the hype was around e- commerce. And e-commerce has become a major force. I just feel like we had a vision of how it would turn out, and it mostly came true.
Today, I think we have less of that. Personally, I am not an expert. I am the furthest thing in the world from an expert. But I've never heard anyone tell me how artificial intelligence will change the world. We know it is a powerful force. It can think. It can process data. It has access to all data that has ever been collected.
What exactly it will do, how it will be a business, how people will make money from it, how it will affect lives, I think that's less clear. But I believe that these two concepts can be compared. And in both cases, a new thing appeared that sparked the imagination. And most bubbles are related to something new.
In 1969, it was investing in growth stocks. In 2006, these were subprime mortgages. In 1999, it was the Internet. In 1720 it was the South Sea Company. And in 1620, it was tulip bulbs in Holland. So I always emphasize that bubbles are very, very connected to something new, because imagination is unlimited.
And it can arise involuntarily, and you can imagine trees growing towards the sky. You will never have a bubble in paper stocks or wood company stocks. You know, it's too prosaic. People can say, “Well, you know, we can say how many houses you’re going to build. We know how much wood is needed for each house.
We can say where we will get it from. " And so, you know, you can't let these trees grow skyward in the prosaic realms. It's always something new. You recently had a very interesting conversation, Howard, that I listened to yesterday, with Edward Chancellor, the author of The Devil Takes the Worst, which made an important impression on you when you first saw the bubble of 2000.
And one of the things you said in that conversation was two bold statements. You said, “First, AI will change the world. Second, most of the companies that people invest in today, in other words to profit from AI, will eventually become worthless.” And then you said, "When a naive or hopeful investor takes the leap that an irresistible trend will bring guaranteed profits, that's when they get into trouble." Well, I should go back and reread that note, I think.
But I...you know, that's right. And “changing the world” and “investors who make money ” are not the same thing. And in fact, Warren Buffett has said, and I think he said this about the Internet, I think he said this at his annual meeting in 2000: " There's no doubt that the Internet will lead to significant productivity gains.
It is unclear whether it will have a positive impact on profitability." And I think the same goes for artificial intelligence. What concerns me is that I saw the ad on CNN. I was on a trip, watching CNN International, and they were generating interest in the show, and the host said to a guest, "You're saying that artificial intelligence has the ability to eliminate half of entry-level jobs." That was the whole conversation, because then they switched to something else.
But the point is, it could be true. And obviously, if you can create the US GDP and eliminate half of the entry-level jobs, that could be more profitable or certainly more productive. But the question is, will it be more profitable? Who will get the savings ? If different companies compete to provide artificial intelligence services, they may compete on price to the point where it will be unprofitable for them .
Or if people using AI services compete for market share, perhaps all the savings will go to the consumer in the form of lower prices. So, I don't think anyone can say exactly how the labor-saving tool that artificial intelligence provides will translate into profit. I often want to ask how... What's wrong here?
And so, obviously, we have no idea how this will all end. But when you ask yourself what potential mistakes should be avoided at a time like this, especially for naive and gullible investors or just smart investors who are caught up in the euphoria, what potential mistakes should we try to avoid here?
What I have seen in euphoria after euphoria is the main thing: we should not assume that today's leaders will necessarily become tomorrow's leaders. They may well be, but you shouldn't bet your life on it. Secondly, you should not assume that because leaders sell at high prices, investing in laggards is a good idea because they are cheaper.
People say, "Well, they have a low probability of success, but maybe a high one, so I should buy it." And that's what I call the lottery ticket mentality. And you know, if they have a low probability of success, you have to accept that that means a high chance of failure. And on AI, I'm led to believe that you can make binary bets on companies that don't do anything anymore , which would be a sink-or- swim bet, or you can invest in existing great tech companies that will benefit modestly from AI if they're successful, but will still be in business and profitable if it's not that big of a deal.
And now we return to the very beginning of our conversation. Do you want to have a new entrepreneurial startup that would be a pure play and have no revenue or profit today, but could be a real breakthrough if it works? Or do you want to invest in a great tech company that already exists and makes a lot of money, where AI might be incremental but not life-changing?
It's a choice. What is your style? What is your game plan? I mean, if you are going to make binary bets on new companies, you have to understand how risky it is. There has also been a lot of speculation, obviously, both about gold, which recently hit over $4,000 an ounce, and about Bitcoin. And I was looking through one of your old memos where you said that you either believe in gold or you do n't, and you compared that to whether you believe in God or not.
That, in my opinion, there is no analytical way to value an asset that does not generate cash flow. And I could never bring myself to buy Bitcoin. And now it has dropped by about a third since October to $90,000 per coin. And you obviously discussed this a lot with your son Andrew. Um, how do you feel right now when you look at Bitcoin and gold and try to figure out if they belong in anyone's portfolio?
Well, you know, listen. Oaktree and I consider ourselves value investors. And a value investor looks at a situation, whether it's a stock, a company, a bond, a building, or whatever, and tries to determine its intrinsic value. And then you see how the price today compares to that intrinsic value . And intrinsic value invariably stems from the fact that it can make money, that it can be profitable and generate cash flow.
So, you know, let's say I have a building and it brings in a million dollars in profit a year. I would like to sell it, you want to buy it. We can discuss this. And I say I would like $ 12 million for it , and in that case you will get an 8% return. And you say, "No, I want to pay $8 for it because I want a 12% return, because it's risky." And I say, "No, you can pay $11, but you'll need to get a 9% return, but that will increase over time." So we can talk, but we talk in a range centered around cost.
But if you are dealing with Bitcoin, gold, diamonds or paintings, there is no intrinsic value. And I always talked about oil. Oil, as I recall, William, was $147 a barrel in June or July of 2007, and then $35 a barrel in January. Nothing has changed regarding oil. She was still black, she was still making the lights go out.
We used it faster than we found it . Oil has no intrinsic value . And all these assets, everything they're worth, their price—that's what the market will bear. So, how can you invest analytically? If I say to a gold or Bitcoin fan, " What do you think the price will be in a year?" How would they come to that conclusion?
What are they basing it on if they don't have cash flow to base that conclusion on? And what I think I said in the memo is that you can invest in gold because of superstition. You may invest in it because you believe its price will increase. You may invest in it because you believe it will be a store of value, because it has always been that way .
But you can't invest in it analytically, based on something called intrinsic value . I still believe that to be true. So, people who bought gold a year ago made a lot of money. I just happened to look at the numbers over lunch before coming here to have this phone conversation with you. And if you, um, bought gold at the end of 2010, I think you've had an annualized return of 7.7% since then.
And if you bought the S&P at the same time, you had a rate of return of 12.7%. So, it's not that gold is a disaster, but you should n't get distracted by last month's gains. It was a sluggish investment. You wrote a really important memo called Sea Change, I think in December 2022 , talking about the end of the era where we could rely on the interest rate cuts that had been going on since 1980.
And one of the things you wrote in that memo is that investors can now potentially get solid returns from credit instruments, meaning they no longer need to rely as heavily on riskier investments to meet their overall return targets. Can you talk a little bit about the best way for ordinary investors to take advantage of opportunities in areas like high yield bonds and so on, because that's an area where my ignorance really runs deep and obviously your knowledge runs very deep.
For example, if we really want to get stock- like returns in a fairly anxious environment, what do you do? What is a sensible practical way for the average investor to do this? Well, you know, for example, high-yield bonds are part of a group of assets that I call credit assets. The world calls them debt, or fixed income, or bonds, or notes, or loans, but they all fall under the same category, and they are all instruments where you give someone your money; They lease it from you and promise to pay you interest every 6 months and then give you the money back at the end.
And you can take these facts, do the math, and figure out what the rate of return would be if you borrowed money at this interest rate today, and then they paid you back the money at the end. And it's called fixed income because the outcome is fixed. This is a contractual relationship that promises a fixed return.
So there is only one moving element in the whole equation. Once you've bought it, set the interest rate and price at maturity, you've paid a fixed price, there's only one moving element, which is the likelihood that they'll keep their promise on interest and principal. And the job of a credit analyst is to assess this, and it's a pretty complicated thing.
You know, people buy stocks because they like the idea of the company, or they like the product, or something like that. I don't think it's a great idea, but it's true. Credit analysis is more complicated. You can't say, "Well, I like that they make good hamburgers, so I'll buy their bonds ." That's a whole different story.
So for most people listening, let me say this. In most areas, an amateur must invest in funds, ETFs, or other managed products. Remember what Charlie Munger said? It's not easy. In fact, he thinks it's easy–it's stupid. So that's true for what I do, but it's also true, I think, for stocks, mutual funds, ETFs, index funds, anything like that.
And investing is an interesting thing. It is very easy to get average returns. It is very difficult to get above average returns. But if you're happy with average returns, uh, you can get managed products at a relatively low price and have a high probability of getting average returns. And the point is, you know, IO bonds yield about seven.
Other forms of lending may have slightly higher returns. And if that suits you , there are many managed products that will deliver results. Coming back to this general issue we discussed about dealing with risk and uncertainty. You often quote one of your favorite sayings, which is, um, by Elroy Dimson, who said that risk means that more things can happen than will happen.
And it seems that the range of possible things that can happen today is wider than it was in the past. And I'm curious how you deal with this , not only as an investor, but also personally. In that sense, you know, when you talk to your children or grandchildren, like, how to actually maintain balance during a period, you often quote a great line by Peter Bernstein, who said, "We are walking into the great unknown every day." How do we deal with this?
Well, first of all, over the last few months I've come to the conclusion, William, that the most difficult questions I get are the ones that start with "how." Hmm. Because I can tell you what you need to do. You have to maintain balance. I can say that if you want to be confident in your quotes, it may be advisable to have a more defensive portfolio.
But how to make this decision and how to maintain balance is a little more complicated. But obviously, if you let your emotions take over, if you buy when things get exciting, which usually means when prices are high, and sell when things get depressing, which usually means prices are low, that's obviously going to be very counterproductive.
So, I think that equilibrium stability is important. And I think most of the people you've met and written about have a pretty even resilience. So, that's my strongest recommendation, and it comes down to not being hyperactive, not trading, not trading all the time. Don't just do something , sit there.
You need to know that investing is not a coincidence, that it works. This is not a game of pachinko or roulette. It works over time because the economy grows and companies improve their profitability over time. And the most important thing for investors is to get on this "gravy train " and stay on it.
Invest, invest early, invest heavily, and stay out of trouble . And controlling your emotions is important if you want to do the latter–not to interfere. And getting into this chaos, staying in it, and not interfering is much more important than getting in, getting out, choosing the right time to enter, choosing the right time to exit, choosing the stocks that will grow the most, and avoiding those that will grow the least.
It's all just decoration. The most important thing is to be a long-term investor. You also told me something that really helped me in the chapter I wrote about you in my book, about just not overdoing it. For example, the main question is how much you push the boundaries of what is possible. And I...I think that's another really key thing - it's just ensuring survival.
But I was also very impressed that you quoted something from your 2015 memo, Risk Revisited, where you said, “In my personal life, I tend to apply another comment of Einstein’s, which is: I never think about the future, it comes pretty quickly.” And I wonder if you were being a little superficial, a little joking, or if this is actually what helps you overcome uncertainty, this idea.
I am not a futurologist. I don't think my vision of the future is necessarily more correct than anyone else's. So no, I don't think about it that much. And I just try to do, you know, all these things that are a little bit illogical and very illogical. I just try to think well while working in the here and now to buy things that will work well.
Well, and then you say, "Yeah, but Howard, to know if something is going to work well, don't you have to have some idea of the future?" Yes, well, you know to some extent, but don't think you know everything. Don't think you're right. Uh, you quoted Elroy Dimson. The future is not some separate thing that, if you are smart enough, you can figure out what it will be like and it will materialize and make you right.
This is a probability distribution. This is a range of possibilities . And every single thing, whether it's GDP growth next year, or inflation next year, or who wins the next election, or who wins the next World Series, or, you know, whether we'll have geopolitical peace, or any of that, only one thing will happen , but many things can happen.
And you have to accept that. You have to accept that this introduces uncertainty into the equation, and you shouldn't build confidence around one outcome and place big bets on it unless you have specialized expertise , which very few people have. So I think modesty is a great way to stay out of trouble.
And I once wrote in some office memo about my favorite fortune cookies. You've probably read this too. But it was written there that the cautious rarely make mistakes or write great poems. Each person must decide for themselves whether I want to try to write great poems and get rich if my bets are right, or whether I want to avoid mistakes and be sure that I will succeed if my bets are wrong.
It's a choice. You can't have both. Or you can try to do both, but you need to emphasize one or the other. You can't emphasize both at the same time. So, you know, it's a mindset issue that I think most people have to accept. And life is uncertain, the future is uncertain , investing is uncertain. Are you going to chase the winners or try to avoid the losers?
I want to ask you one last quick question. I was struck recently, when I was listening to a conversation between you and your Oaktree co-founders Bruce Karsh and Sheldon Stone, that Sheldon said that when he first met you in 1983 and came to work with you on high-yield debt, you were already talking about the importance of a balanced life and time to enjoy your personal life.
And Bruce also talked about the importance of family to you and all of the Oaktree founders. And I was very impressed, looking back on your life, that you found a lot of time to play tennis, backgammon, and card games with friends like Bruce Newberg, as well as to buy, decorate, and renovate homes and spend time with your children and grandchildren.
And you even mentioned that you spent thousands of hours playing backgammon and card games with Bruce Newberg over 40 years. What advice can you give to investors or other professionals who clearly need to work very hard to compete? And yet you also want to have a balanced life in some form. And you don't want to just look back and think, "Yeah, I made a ton of money, but I never got to spend time with my family or friends or enjoy my hobbies." Well, you know, we all have to choose what's important to us.
Charlie Munger used to say that the guy was like, "I consider myself a maniac." A maniac is someone who only cares about working hard and making money. You need to decide if this is for you. And for me it is not so. And, uh, the truest of all sayings is that no one on their deathbed ever said, "I wish I had worked harder." And I think that's true, and I don't live like that .
And I have, as you say, activities that I really enjoy. I wouldn't give them up. And when you have enough money or more than enough money, why should you give up some of your pleasure to have more? I think the best quote I always use when giving advice to young people comes from the writer Christopher Morley, who said that there is only one success–the ability to live your life your own way.
Now the most difficult thing is to understand what your path is. What do you know , when you're 22, you choose a career path. What will make you happy at 70? This is not easy to understand. We are changing. Sometimes we have an inaccurate idea of ourselves. If I were describing myself to you 40 years ago, I would n't be describing the person I am today, mainly because maybe I was wrong, and maybe I've changed.
But still, our goal should be to get to the end and say, "I'm happy with the choice I made." Again , this has to be a choice that is made consciously. And just pursuing a job, money, career, and prestige because other people are doing it, because it's glorified in the media, or because you want to emulate XYZ, become the richest person in the world, you shouldn't do it if it's really not right for you.
And I don't think that's right for most people. So , I think, live your life your own way . Figure out what feels good for you and go for it. It seems to me that when I look at your life, you've done a great job of setting everything up to suit you . So, you write memos, which is what you like to do.
You do not make individual investments on your own. You don't manage a large number of employees. You establish the firm's investment philosophy and meet with clients. And there's something really wonderful about seeing yourself set up in such an internally consistent way. So this is a great model for all of us.
Thank you. Well, you know, William, my idol, Warren Buffett, always says he skips work in the morning, and I feel like that's true . And I'm happy to go to work, and I like what I do. I hope to continue doing this for a long time.
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