저자: HowardMarks · 외국인
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투자는 타이밍이 아니라 시간이 중요하며, 미래를 예측할 수 없음을 인정하고 분산·헤지해야 한다. 시장은 사이클을 따르며 비이성적 매도 시 저가 매수 기회가 생기나 용기와 이해가 필요하다. 시장 타이밍은 극단적 상황에서만 시도하고 대부분은 꾸준히 투자하는 것이 낫다. 현재는 긴축(고금리)으로 인해 향후 1~2년이 도전적일 것이며, 경기침체 가능성이 있고 하이일드 채권 등 크레딧 자산이 유리하다고 봄. 한국 시장에 대해서는 긍정적이나 가격 판단은 유보.
다듬은 글
investing is a fascinating area but it should be done on the basis of a strong understanding many people invest before they have the understanding it's not uh like uh going to a casino it's not a game of chance and the lower the prices go the more eagerly they sell this is wrong MH what we want to do is buy low and sell High human nature causes us to buy high and sell low at minimum we want to avoid it and at maximum we want to do the opposite now it's not easy because what you have to do is you have to restrain Your Enthusiasm as things are positive and you have to turn more positive as things are negative very hard to do it's time not timing that produces success just just put your money in and let time pass from all over the country and the world to our investors who have been waiting for this he's considered a Pioneer in the American Investment world today we have the pleasure of having Howard Marx chairman of oak tree Capital with us welcome thank you well I'm very glad to be here and contribute what knowledge I have chairman marks I recently read your investment letter as someone who studied econometrics I found many of the statements quite shocking it was full of criticisms about economic forecasting and econometric methodologies I'm curious about the background to that this is quite a dilemma what is investing investing is positioning Capital to benefit from future events MH and yet I insist that we can't know the future how can we invest and uh what what the important conclusion from that is that you must not assume that you know what the future holds if you admit that you don't know what the future holds then you will invest carefully you won't bet too heavily on one outcome you'll spread your risk diversify hedge and uh have a mixture of Investments uh the Great American humorist Mark Twain said it ain't what you don't know that gets you into trouble it's what you know for certain that just ain't true and I think this is very important for your uh viewers to consider no sentence that begins with I don't know but or I may be wrong but ever got anybody into trouble you get into trouble when you say I'm sure that this will happen I'm certain that that will happen because if you are too confident and you bet too much on one outcome and you're wrong then you can fail if you admit uncertainty and balance your bets uh uh over a number of scenarios uh it's highly likely that you will succeed people rely on forecasts because they do not like to live with uncertainty uh there's a quote in the memo if people didn't have forecast something like if people didn't have forecast to rely on they couldn't get out of bed in the morning uh it's uh it's uh terrifying to know that you have to live in a world that is unpredictable but it is in my opinion and you have two choices in my opinion you can say the world is unpredictable and we're going to accommodate to that or we're going to live by predictions one of my friends the day the memo came out one of my friends said to me yes but you have to take a position don't you my answer is you don't have to take a position if there is is an event and you have no reason to believe you know what the outcome is going to be then you shouldn't bet on that event or you should hedge that event uh when oak tree makes its Investments we merely assume that we don't know what's going to happen in the economy or in the markets uh and we uh we take actions which allow for that uncertainty uh we all have opinions I are I I rail against forecasting but I have opinions I just don't bet heavily on my opinions it's one thing to have an opinion it's something very different to be confident that you're right and I'm never confident that I'm right where we believe we can be right where we can get a an edge and produce Superior performance we hope is in our in what I call the micro not the macro Macro for the benefit of your viewers is countries economies currencies Commodities interest rates and markets and really nobody knows those things better than anybody else the micro companies Industries Securities these these are things that through hard work and skill I think you can get an advantage and do a superior job so that's where we put our emphasis but if if that is where we're experts then we shouldn't be betting on economies and interest rates and currencies since 1969 for about 50 years you've been active in finance and investment if you were to divide those 50 years into periods your philosophy techniques and strategies must have evolved how would you categorize those periods and what stage would you say we are at currently well as you indicate when you say 50 years it sounds very uh daunting uh it's a long time uh it didn't feel like 50 years but um uh yes I have lived through a variety of periods Cycles MH maybe divided by crisis you know uh things are down up down crisis up crisis you know and um I have uh my my career has been punctuated uh by four crises uh 991 0102 mhm 089 Global financial crisis and of course the pandemic and uh so uh for every strategy for every uh investment approach there are times that produce a lot of opportunity and there are times that are uh what the farmer would call phow slow periods and you have to know the difference and you have to wait patiently until the opportunities come along and then you have to move aggressively to take advantage of the opportunities and once you do so and they re and they make you money and uh the markets recover then you should step back again and become patient once again it's it's it's wrong to think that there are always great opportunities sometimes there are not and I believe that the availability of opportunities depends on the market and it depends most important ly on the behavior of other investors we've we've gone through a long period um from the middle of 2009 the end of the global financial crisis to early 20120 the beginning of the pandemic we were in a period where the central banks provided Easy Money interest rates were low financing was easily available to anybody who wanted to get money people were eager to provide the money buyers were enthusiastic sellers were complacent they were not eager to sell risk aversion was low fear was low the greatest fear for many of those years was what we call fomo fear of missing out when the market is in this condition nobody's selling eagerly why should prices be low they shouldn't be there are no Bargains in that climate that is a time for caution that and you must recognize what's going on I wrote a memo to my clients in February 2007 called the race to the bottom and it talked about what happens when people have too much money and they're two year to invest the opportunities deteriorate you have to understand the conditions that you're in and then usually they take on too much risk the structures that they build are too risky something happens some trigger event and uh it collapses now everybody's terrified and nobody's eager to buy everybody wants to get out fear of losing money replaces fear of missing out and this is the time when Bargains are readily available but you need the courage you have to understand what's going on and you have to have the courage to take advantage of those of those Bargains and so if you accept that the market fluctuates in this way Cycles we call them then clearly it's not wise to behave the same all the time you have to vary your behavior commensurate with what's going on in the cycle the goal is to be counter cyclical normally what happens is when things are going well economic reports are good companies are reporting good profits stock prices and security prices are rising people feel good they buy and the higher they go the more they buy then they reach a maximum for some reason maybe there's a negative event or maybe the economy just turns down and the economy is deteriorating and Company reports are not as good and stock prices are falling and now people get depressed and they sell and the lower the prices go the more eagerly they sell this is wrong what we want to do is buy low and sell High human nature causes us to buy high and sell low so that is what I call procyclical Behavior at minimum we want to avoid it and at maximum we want to do the opposite now it's not easy because what you have to do is you have to restrain Your Enthusiasm as things are positive and you have to turn more positive as things are negative very hard to do uh some professionals can do it not too many amateurs can do it but at minimum you want to not be emotional and not succumb to the cycle so rather than buy high and sell low maybe you say I'm just going to hold throughout you see so that's that's obviously better than being procyclical of course the best thing in the world is to be counter cyclical at the right times but it's not easy and um uh people should not try uh with with the money they need uh but anyway my my career has basically consisted of these cycles and this is why I wrote a book on on mastering uh the cycle which I'm proud to say is available in Korean uh not that I'm trying to sell books uh but um uh in investing is a fascinating area and it's a potentially profitable area and I recommend it highly but it should be done on the basis of a strong understanding and not too many many people invest before they have the understanding and it's not uh like uh going to a casino it's not a game of chance it is a serious Pursuit that should be followed on the basis of knowledge in which case uh you know uh it you can count on having a good outcome if you do it wisely the other thing I want to say about the periods of my life is I came into the investing business as you indicate 1969 and we all know that the young people will tell you that was a dumb world nobody knew much not no most people didn't understand how the market Works what makes for an attractive stock or Bond uh most people did not have information access to information uh if you wanted to study a company you have to send them a letter and ask for the annual report and then they had to send it back in the mail it took a long time and um it was easy to get a knowledge Advantage just through a little effort Warren Buffett talks about buying dollars for 50 cents that's a good thing to do but it R it it relies on other people who don't understand that those are 50 do fast forward to today now everybody has a computer everybody's hooked up to the Internet there's lots of data feeds everybody understands how the market works now the market is now the world is a smarter place and uh knowledge is cumulative everybody knows everything today so uh my son pointed out in one of my memos called something of value January of 21 that readily available quantitative information about the present will not be the source of superior profits because everybody has it in order to have Superior profits you have to have some Advantage you have to know something that the other people don't know or do a better job of interpreting it m and uh so it is competitive and challenging so what we say in the terminology of our profession is that the markets have become more efficient they the markets now have more information and do a better job of incorporating it so it it I would say that it has has gotten more challenging over my lifetime when I started I joined the industry in ' 69 I started managing money in 78 I started with high yield bonds most people didn't know about them most people didn't understand them most people were afraid of them so it was possible for me to get a bargain today all that has changed now everybody knows about them and nobody's afraid of them so why should they be as cheap as they used to be and the answer is they shouldn't the market has become more efficient so I I noticed that you have copies of my first book here called the most important thing and uh there are 20 chapters and each one says the most important thing is and then it's a different thing because in investing there's no one important thing there are many and and and balancing all the considerations is one of the things that make it makes it challenging but chapter number two says the most important thing is understanding market efficiency you have to understand the concept that I just uh explained and the change in efficiency has been a a a big marker in my career in Korea you're regarded as a master of contrarian investing and that's how you're seen you're known for your great success using a strategy of taking positions opposite to the market has it been about 7 months since Mr Kung interviewed chairman marks that's right about 7 months I saw it then and I watched it again to prepare for this interview even even back then when the market had a 10% correction you said that it was a healthy adjustment and there was no need to leave the market but the situation is more serious now many tech stocks and platform companies have fallen another 30 to 50% so I'm curious how you view the current market uh since the market has worsened do you think it's time to actively buy stocks I'd like to ask the only not thing I know for sure is it's a better time than a year ago or two years ago uh the market was very high uh surprisingly after the pandemic the market was very high because the central banks of the world uh came in so strong with the rescue uh that they they they made the uh economy uh stronger and they made the liquidity very available and that produced uh asset prices that were very high and um in the last year prices have been coming down and uh as I as you say as as you say I said a healthy correction not over necessarily there's no reason to think that this is the bottom uh prices were very high now they're moderate they're not terribly low MH these are not Bargains we're talking about these are reasonable prices nobody can say whether it's going to to go lower MH it may well uh your question part of your question is is this the chance of a lifetime no it's not the chance of a lifetime it's a reasonably priced market now I believe that most investors should be invested most of the time the idea of being able to get in and get out and get in and get out what we call Market timing is not a good idea for most investors it's very hard to do you have to understand the market you have to stand the economy you have to stand your psychology and you have to operate against your psychology you have to buy when things are really bad and sell when things are really good this is hard for most people so I I don't think that the average viewer should try Market timing they should invest either all the time or almost all the time now it would be great to try to reduce your risk when the market is really high mhm hard to do may be worth trying but that's about it and Market timing most of the time uh is too hard to try now when I was working on my book about the cycle I said to my son who is a very important uh sounding board for me I said you know I think my market calls have been correct over over my career and you know what he said to me that's cuz you did it five times in 50 years mhm this is very important concept and you know he he he looks at all these questions with fresh eyes and makes great observations five times in my life the market was here or here and on those occasions the error was obvious the argument was compelling the chance of being right was very high mhm here or here what about here or here or here or here in between it's not so obvious and uh the chance of being wrong is quite substantial that's why people should not try this on a regular basis and we don't try on a regular basis we don't change from month to month or year to year only in the extremes and and you know and we're professionals and we think we understand the process and yet we don't try that often to time the markets um and think about it this way let's say I told you that the market is 10% overvalued let's say I'm correct what's the probability that it's going to go down over the next year versus up my guess would be 55 to 60% it's it's very common for the market to be overvalued and go up further and in fact if the market went down every time it was 10% overvalued it would never get to 20% overvalued or 30% overval or 40% we've seen those gain and and and we would never have bubbles which we do from time to time so clearly overpriced and going down tomorrow are not synonymous and so I think for most people Market timing is not the solution for most people this the the answer is understand investing figure out a rational way to do it whether it's picking good companies or or going into funds or hiring a manager or something like that don't expect too much you know uh I go to people I say I think we can make you 8% a year I think we can make you 12% a year with our riskier products I say maybe we uh uh I think we can make you 20% a year then the next guy comes in he says we'll triple your money he gets the money but of course his his activities are not founded on a solid foundation we're not going to produce Miracles if you can compound your money at at 10% a year it's a great accomplishment and most people should not expect to do that or or do better than that the the the S&P 500 the main stock index in the United States has risen at about 10 and a half% since 1920 now since 1920 we've had 17 recessions the Great Depression several Wars including a World War MH now we've had a pandemic many geopolitical problems many economic problems we've still compounded at 10 a half% a year and if you put a dollar in the S&P in 1920 and you held it strongly you never bought you never sold you know what you have today 8,000 that's the magic of compound growth without interruption so for most people the the answer is put your money in understand what you're doing so that you can be steady MH don't mess it up and um I I think that uh there's a great American investor named Bill Miller who has one of the greatest records and he said I quote him as saying it's time not timing that produces success just just put your money in and let time pass so Market timing is difficult as you just mentioned you always say to buy time not timing so uh in a situation like this in terms of asset allocation are there any assets or portfolios you're particularly focused on well if if you're going to ignore my advice and not just hold steady and try to move money around to improve then uh I think that we have to be aware that the period immediately ahead is more likely to be a worse than average period rather than a better than average period there are a lot of uncertainties uh and in particular of course most countries have high inflation today the central bank banks are trying to rain in the economies cool off the economies uh uh in order to control inflation which means that they're raising interest rates and withdrawing money from the system and historically these actions have for the most part produced recessions if you if you can do it without producing a recession we call that a soft Landing most most of the time the soft Landing is is not achieved so we're we're going we're looking at a period ahead where business will not be as easy as it used to be we were in an easy money environment with low interest rates and now we're in a tighter environment because the FED has to cool off the economy which means that it'll be more difficult for companies and um economic growth will be weaker that's the goal go just remember the goal of the of the central bank right now is to is to slow the rate of growth because it is from an overheated economy a too strong economy that we get inflation you can't have inflation control in a raging economy you put all this together and you must say that the next year or two will be challenging we as as we're predominantly what's called Credit in investors we invest in debt debt bonds loans are a promised stream of payment a contract a company sells you a bond what that means is you give them money and they sign a contract that they will pay you such and such interest every six months at the end of X years you get your money back this is a Dependable contract as long as the company is creditworthy and we think that this is a very good asset class in this this environment a year ago high yield bonds which is one of our main uh products uh produced uh roughly 4% uh interest every year now it's nine that makes it very attractive and when you combine a high level of promised return with the contractual nature of the return it it sounds pretty good to me uh in the long run stock which do not have the benefit of a contract participate in the growth of the economy and are expected to do better than Bonds in the long run but uh you know for the period immediately ahead uh credit I think is is a good tool and if we run into tough times your your credit or we call it fixed income investments will probably do better than your stocks in a tough envir but I want to add one more thing and I want to demonstrate how complicated this area is I never talk about this to to to make it seem easy I don't want to make it seem easy we know that the economic Outlook is worse than it was in the recent past we also know that the market is down so the question is is the market down appropr rately given the the worse environment or too much mhm or too little mhm and you know we know we suspect that there are challenges ahead for the economy but what if I told you the recession will probably take uh 5% off of GDP but the market is priced as if it's going to decline GDP is going to decline 15% that is to say stocks are too cheap so most people think positive event pric is up negative event price is down but it's not just events and prices there's a there's something in between which I've been alluding to psychology it's it's not just what what the events are but how people feel about those events that produce the change in price so if the events are negative but the psychology is too negative one can argue that that the prices will go up now that's I'm not making that argument I'm only showing how much vaguery vagueness there is in this process of assessing future Direction uh having said that I admit that the future year or two will be challenging uh uh I don't think it's going to be so bad that people should get out today in the expectation that they'll uh avoid a big loss and and get in lower later uh but it's certainly possible that the markets can decline from here but no sure thing after this interview was arranged I looked into what oak tree was buying I saw that you hold a lot of energy companies their relative performance is good right we have a lot of portfolios we have strategies to do many different things each portfolio holds many things we do not bet so heavily on something that we commit the whole portfolio to it having said that yes we have Holdings in energy and uh uh not disproportionate I don't make these Investments I don't make any Investments anymore I I provide leadership and and general direction and my my colleague make the individual investing decisions having said that uh I think it's fair to say that in the last year energy Investments produced the best results um and uh we made a lot of money in energy um our goal as investors is always the same which is to buy the things that provide the best bargain in terms of the ratio of the possible reward to the risk involved so uh we're always trying to uh make in Investments which produce what I call is an asymmetry you have a high probability of making money and a low probability of losing money now at Oak Tree we go further we say if something has a big chance of loss but a huge chance of gain we generally don't do that because we don't like to make investments where we could have big losses what we try to find is things with a good upside which is disproportionate to a downside risk which is which exists but is modest and that's what we found in energy and uh why why were we able to get good uh deals in energy Securities why did we make these Investments and the answer is that in recent years the world uh developed an allergy to fossil fuel and people who believe in Social responsible investing uh said you must take all the oil and gas and coal stocks and sell them and this is called ESG among other things We Believe very strongly in ESG we believe in being responsible investors we believe that the businessman has responsibilities other than just to make money we believe in the responsibility to the planet and the people who live on it as well as our employees and our uh fellow citizens but I don't believe that the best thing we can do for the planet is sell all of our energy Investments let's say we do what does that accomplished for the planet somebody else buys them they still exist nothing has changed fundamentally or ecologically MH it's just a a show of intention who buys them people who don't care about social responsibility so maybe they buy up these oil and gas companies and operate them in a less responsible manner that doesn't help the planet um and um the point is we're going to require oil and gas for a long time the the state of California has just made a decision that that they're going to stop the sale of gasoline powered cars 2035 2035 mhm which means that even in California which is the most ecological State we're going to be selling gasoline cars for 13 years and those cars are going to last 20 years after that which means we're going to need gasoline for the next 33 years the the key question is who can produce it the cleanest so rather than saying we're going to sell oil of our energy stocks we say we're going to buy the companies that are better performers and we're going to buy the companies that are lesser performers and make them better MH if we can and I personally think that this is a more responsible position than merely selling which accomplishes nothing in my opinion so that's the way we feel about it and so many people were negative on energy stocks that for us they became one of the areas where you could find the best bargains and in this way I believe that looking for bargains and good investment returns for the clients and being a responsible investor socially came together it's actually the same as my investment idea we're in an era of energy transition but paradoxically that energy transition increases the short-term value of the traditional energy industry industry uh because as you said everyone will try to respond to a predetermined future so major oil holders will likely try to raise the price that that's a common assumption I personally invest in energy stocks and related Investments too for balance I may hold solar wind or hydrogen assets as well we call it the barbell strategy I think we have to be realistic and practical in making decisions for our portfolios and for the world um in recent years prior to this one uh people were saying that fossil fuel oil gas coal are bad don't do it mhm and a lot of people said sell your oil stocks and some people did sell but and by the way a lot of countries said we're not going to engage in oil and gas production we're going to shut that down and will import it from other countries like Russia and so in this process Europe to be green MH reduced some countries reduced their energy production and became totally dependent on Russia MH and and energy dependence is one of the weapons that Russia is using against the West right now so now people say well maybe we need oil and gas maybe it has to be produced so I think I think that this idea that oil and gas are bad you should sell at stocks you should engage in that industry is simplistic and the world is not simplistic and I've been here with you now on this interview what have I told talking about how complicated things are how difficult things are there are very few important decisions in life that can be made on the basis of one factor you want to be green shut down your oil industry and then uh and then uh you know people will uh be cold and uh won't be able to get to work uh it's not so easy people said uh arms manufacturer are bad shut down all the arms manufacturers sell the arms manufactur guess what we're at War we've been attacked in Ukraine now we need arms to fight Russia maybe arms are not so bad again a multivariate decision not one you've emphasized risk management for a long time and are there any particular risks that investors should avoid or manage at the moment this idea of risk management is very interesting first first of all there's risk management which means using statistical techniques to predict the downside of a portfolio and I don't believe in that and I don't believe that people can show me that it has worked risk management I believe that after 0102 uh it was mandated that every Bank uh have a risk manager and more money was spent on risk management between 02 and ' 08 than in the rest of History put together and guess what we still had a global financial crisis so I don't think you can eliminate risk through the application of statistical tools and then you have risk management every investor at Oak tree every investment professional at oak tree is a risk manager which is to say that when they pick up an opportunity in addition to figuring out how well it will go if things go well it's their job to figure out what would happen if things go poorly what is the risk to assess how much the downside is what would have to happen for us to lose money how bad it could get how probable it is that it'll get that bad and what and then the portfolio manager's job is to understand if we add that security to the port P folio what does that do to the overall risk things like correlation and so forth and but I I believe that this function is best performed by by analysts and portfolio managers not by somebody who sits over there who is neither an analyst nor a portfolio manager but a very good statistician and in Oak tre's investment philosophy there are six tenets the number one is risk control and uh we believe that a successful long-term record is best produced by having a long series of successful uh uh Investments and no terrible ones not by trying to shoot To The Moon but just try for consistent uh success and uh avoidance of disasters and of course we're now you know I've been working with my clients for uh my colleagues for uh uh 36 years I've been a man manager for uh 44 years and I think this is the record we've produced we don't do as well as the big Risk Takers in the good times perhaps we do much better than they do in the bad times and and we do steady throughout and number two on our list of of investment uh philosophy is consistency I believe risk control and consistency can be a very satisfactory foundation for long-term investment success and that's what we try to produce the interview is almost over actually there's a question I really wanted to ask you I think many Korean investors will be curious too even though you said oak tree doesn't forecast the future and invest based on that I have a question for you there seems to be a consensus that the Federal Reserve played a significant role in the current instability of the global financial markets but recently there's been growing discussion in the US markets about a possible fed pivot where they might soon stop raising interest rates or even lower them so I really want to ask you this has the FED acted appropriately to rescue the us or global economy from this inflation and if there is a pivot in the future when do you think it will happen I'm just asking casually you know the first thing I want to say is that if you offered me that job I wouldn't take it it's very challenging you know uh since I don't believe in economic forecasts uh I would not know how to do that job and in the last memo which I believe you read uh I talk about the fact that even the FED can't predict what it's going to do and this shows the challenge that's involved MH second I believe that the fed and the all the world central banks had the challenge in 2020 of confronting something it had never seen before which was the pandemic MH and in a in a crisis in trying to figure out what lies ahead I read a quote from a Harvard Harvard epidemiologist named Michael lipich MH he said we have facts analogies to Prior experience and supposition which means guesses but in the pandemic we had no facts we had no prior experiences to generalize from all we had was guesses that was true for the doctors trying to respond to the pandemic it was also true for the central bankers trying to respond to the economic difficulty this is the first time in history that the economy was shut down to prevent the spread of a disease first time how do you figure out how to do that and how to recover from it so the the vaccine was developed and I I use the analogy that sometimes when a man is very sick a person they put him into a coma so that they can develop a cure and fix it m then of course you have to bring the person back to life they put the economy into a coma they had to a keep it alive MH and B bring it back to life how do you do that if you've never been through it before so the FED took very strong actions March 23rd of 2020 I believe it was they announced the the the stepping up their program and by the way the markets went straight up from 2020 2020 from March 23rd straight up yeah now you have three choices let's assume you can do it exactly right too much or too little which should you do they don't they don't know how to do it exactly right since there's no precedent okay take that one off the table that means too much too much or too little too much too much and they did too much and in in America for example in I happen to know the statistics in the third round of relief they sent a check to everybody who made less than $175,000 a year which I think is 80% of the population now something like I estimate that something between 10 and 20% of the population was hurt financially by the pandemic so 10 to 20 were hurt 80% got checks 60 to 70% of the population got checks for nothing and they couldn't spend the money because the economy was shut down you couldn't go on a vacation you couldn't have a wedding you couldn't have a party you didn't need a dress for a party so people got rich the money piled up in the bank at the same time that manufacturing was shut down so they did arguably too much but they did not want to do too little and let the economy slide into a depression I believe that if the central banks had not taken action there would have been a global depression and a global depression is not just a recession that's a little worse it's horrible my father and mother lived through the depression and believe me they told me about it and you had grown men standing on street corners selling Apples because they couldn't get a job so the central banks did too much especially the fed and it's it it laid the groundwork for uh inflation what is inflation too much money chasing too few goods so people had too much money they were enriched by the relief too few goods the manufacturing was shut down and when it started up again it was a little unsteady so we got inflation now the big mistake was that the FED concluded that it was likely to be transitory temporary I'm not smart enough to know whether that was well reasoned or not it was merely wrong and and as a consequence they didn't start to reduce the stimulus early enough and now we've had inflation now for a year and a half at a at a serious level um so uh now they're trying to withdraw uh stimulus reducing interest rates and uh rather than buying bonds which puts money into the economy they're selling bonds which takes money out of the economy and so you have to before you criticize you have to understand the difficulty and uh anytime I think I know better than them I say to myself would you like that job and that's why I said no so uh they are now going to stay what we call hawkish easy money is called dubish Tight money is called hawkish they're going to stay hawkish for a good period of time I would estimate uh at least till next summer number one they want to stop inflation and you know when we go camping whether did they tell you if you have a campfire it's not enough to put out the flames you have to make sure that the Embers are cold so that they won't start up again when you leave right they have to make sure all the all the fire is out um number two they have to uh slay the dragon of inflation they have to kill inflationary thinking inflationary thinking is very dangerous because if I believe that there's going to be inflation ahead I say well prices are going to go up in the future I better buy now what does that have what does that do it causes prices to go up so inflationary expectations are self-fulfilling they have to Stamp Those out out and kill them kill them and then number three they have to preserve their own credibility by not do EAS uh hawkish doish hawkish doish hawkish doish they have to appear to be presenting a consistent framework so I think that they're going to stay hawkish for a good period of time uh and that is likely to bring on a recession most people believe that the session will be relatively brief and relatively mild and what I say about that is we'll see here's what's impressive that the covid-19 pandemic was something the world experienced for the first time if the central bank had left it in a coma so to speak then they would have had to operate in a coma state that they had to perform surgery that surgery for inflation surgery for a fatal dis disease doesn't seem that easy is what you're saying it's a very metaphorical expression what's more the recession resulting from that operation might not be as mild or brief as we think anyway you gave me the answer I was worried about we'll leave the interpretation to ourselves finally I want to ask you this question oak tree also has a Korean portfolio right we don't have a Korean portfolio but we include Korea in many of our activities uh we have an uh we we invest in emerging market equities and and and that Korea is eligible for for inclusion there uh uh and we have owned the debt of Korean companies from time to time in the past and we make real estate investments in Korea okay Korea is an industrial country that has achieved unprecedented development perhaps it even skipped the middle inome trap or broke through it very quickly it's shown insufficient performance recently there's been a lot of negative public opinion about the Korean economy since you've come to Korea you must have thought a lot about Korea so for my final question I'd like to hear your thoughts on the Korean Economy based on that if you have any advice for Korean investors please share it with us I've been coming to Korea for up to 15 years I enjoy my visits I have friends here that I like to spend time with I have a high opinion of Korea I think it's a very industrious country well organized I think it has a good balance of uh prudence and uh uh shall we say aggressiveness um and uh good energy uh High aspirations for the future um and uh uh I I stress the fact that I don't know enough about Korea to have an opinion on its markets uh I think it has a bright future I don't know how its Securities are priced commensurate with that future um you know I I certainly are am happy if Korean Securities are included in our portfolios but I keep my hands off okay all right uh it was great honor to have you uh here our studio and I was so happy to share this privilege to our audience thank you very much sir well it's great to be here I look forward to the next time that I can see you Jacob and you n okay in New York in New York in New York on wall on Wall Street all right thank you very much sir thank you thank you thank you
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