저자: HowardMarks · 외국인
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관세와 탈세계화로 자유무역 시대가 끝나며 인플레이션 상방압력이 커진다. 관세는 기업 원가와 소비자 가격을 올리고 수요 파괴를 낳아 S&P500 이익을 훼손한다. S&P500 PE 약 19~22배 수준에서는 과거처럼 연 10% 수익을 기대하기 어렵고(1~7%대, 10년 0~3% 추정), 자산 배분에서 채권 비중을 늘리라는 조언이 나온다.
다듬은 글
This is the biggest change in the environment that I've seen probably in my career. Tariffs are an increased cost. Somebody has to pay them. Stocks have delivered an average of 10% a year for the last 100 years, but not when the PE ratio was 19. What if I told you the golden age of the US stock market is already over.
Don't take it from me. This is coming from billionaire and legendary investor Howard Marx. The US stock market has averaged a return of 10% a year for the last 100 years. A return so consistent that it has become a widely held belief that this return will continue forever. Howard Marks disagrees. In fact, Markx is warning that investors could actually see a stock market that produces as little as 1% a year from this point on.
And it's not just Howard Marks saying this. The investment bank Goldman Sachs is forecasting just 3% annual returns for the US stock market over the next decade. One of the reasons Howard Marx is nervous about future returns in the stock market has to do with tariffs and delobalization. Listen to what he had to say.
How do you start to even measure something like a potential paradigm shift like the tariffs that were announced earlier this week? Well, first of all, of course, measure is the wrong word because you that suggests some quantification which is impossible. There's nothing to measure. But how do you gauge?
How do you think about the changes and you know this is this is the biggest change in the environment that I've seen probably in my career. uh you know we went we've gone from uh free trade and or world trade and globalization to this system which implies significant restrictions on trade in every direction and a step toward isolation uh for the United States.
I believe that the last 80 years since World War II have been the best economic period in the history of mankind. uh and one of the major reasons was the the growth of trade and I think that we have truly had a rising tide that lifted all boats and and trade was a big part of that and everybody in the audience should understand the role of of trade.
Every country, for example, does some things better and worse. And worldwide welfare is maximized when every country does the things it does best and cheapest and then sells them to the countries that need them, which do other things and sell them to other people. That's how trade works. And uh well, I don't know if it's politically correct, but the good news is that the Italians make the pasta and the Swiss make the watches.
But if we stop world trade and and the Swiss have to make their own pasta and the Italians have to make their own watches, the world will probably be well maybe arguably people in both countries will be a little worse off. That's what we're talking about here. and and and uh we should not underestimate the benefits that we've gotten from globalization.
And among other things, there was a 25-year period, which I cited in one of my memos 10 years ago, in which the the the cost of durables in the US went down by 40% in inflation adjusted terms that kept a lid on inflation here. It made goods available cheaply to all Americans. If we don't have world trade, we don't have that benefit.
And you know, the the tariffs are designed to encourage production at home, but who could imagine that uh that most things produced in the United States will be as cheap as they are coming from abroad? In other words, things will cost more. If that's the case, does that mean that you see the inflationary regime as being something that is more persistent, a reversal of what we saw the disinflation of the globalization?
Well, I think so. There were financial benefits from globalization, including keeping a lid on inflation. And you know, if if we hadn't bought our TV sets and appliances from abroad in that 25- year period at declining prices, what would inflation have been? And the answer is considerably more. Maybe not two, but maybe three, four, five.
And so, you know, tariffs are an increased cost. Somebody has to pay them. And, you know, most people think the consumer will pay them. There's some possibility that the importer or the exporter will pay them or the government of the exporting country but it's an increased cost the proceeds from which will go to the government and you know will society be better off as a result.
Tariffs are basically taxes on imported goods. When a country adds tariffs it makes foreign products more expensive, pushing people to buy local instead. Sounds good, right? But here's the catch. It also raises costs for businesses and consumers. That means higher prices at checkout, lower corporate profits, and slower economic growth.
And if other countries strike back with their own tariffs, boom, trade war, supply chains break, uncertainty rises, and as a result, the stock market usually takes a hit. In just a matter of weeks, the US stock market fell nearly 20% from its peak on concerns relating to tariffs. It's important to understand that when someone refers to the US stock market, what they actually likely mean is the S&P 500.
The S&P 500 consists of the 500 largest publicly traded US companies. In simple terms, the S&P 500 index fluctuates based on investor expectations of the future profitability of these 500 companies. So, put another way, when investors think these 500 companies will generate more profits in the future, the stock market rises.
However, when investors think profits will decline relative to their prior expectations, the stock market falls. The reason the US stock market declined so dramatically is that investors were concerned that significant tariffs would negatively impact the future profitability of companies in the S&P 500.
Tariffs would impact these companies profitability in two main ways. First, costs would increase for US companies that import their goods from outside the US. Take Apple as an example. It is estimated that nearly 90% of Apple's iPhones are manufactured in China. Let's see how tariffs could impact Apple's profitability.
Apple has previously disclosed that they have 40% gross margins on iPhones. This means that if Apple sells an iPhone for $1,000. 400 of that is gross profit. So, the profit before factoring in costs like overhead expenses, marketing, and research and development. The other $600 is what is referred to as cost of goods sold or the direct costs associated with producing and manufacturing that iPhone.
For the sake of this example, let's say tariffs are put in place that cause the cost of making an iPhone to increase by 50%. This means the cost of goods sold per iPhone skyrockets from $600 to $900. At the $1,000 selling price per iPhone, that causes Apple's gross profit to get cut dramatically from $400 per iPhone before to now just $100.
This leaves management at Apple having to make a tough decision. How much of this cost increase does the company tried to pass on in the form of higher prices for an iPhone? If Apple wants to maintain the same $400 gross profit per iPhone, the price of an iPhone in this example would have to increase to $1,300.
This is 30% higher than the previous price of $1,000. At this point, you might be asking a very good question. If Apple can choose to pass on the higher costs from tariffs and maintain its profits, why would tariffs negatively impact Apple stock at all? The reason is that these higher prices will likely result in a concept known as demand destruction.
Demand destruction refers to a long-term or permanent decline in demand for a product or service. Usually caused by sustained high prices or economic shocks that force consumers or businesses to cut back, switch to alternatives, or stop buying altogether. Put simply, when things cost more, people buy less of those things.
Going back to the example of the iPhone, if the price for a new iPhone increases by 30% virtually overnight, it is a reasonable assumption that less iPhones are going to be sold. Consumers may hold on to their older phone for longer and delay upgrading. Or they may pay the high price for the iPhone, but no longer buy the AirPods or Apple Watch.
Increased costs that can lead to lower margins or demand destruction for companies is one major reason why the stock market has reacted negatively to tariffs. However, this second reason is arguably even more important. Companies in the S&P 500 rely on markets outside of the United States for a significant portion of their revenue.
The most commonly cited number is that roughly 30% of the S&P 500 revenues come from outside the US. However, that doesn't tell the full story. For background, the S&P 500 is what is known as a market cap weighted index. What this means is the S&P 500 index assigns more weight to companies with larger market capitalizations, meaning bigger companies have a greater impact on the index's performance.
Apple is the largest company by market cap and accounts for 6.4% of the index. Whereas a company like Domino's Pizza is number 386 on the list and accounts for a measly 0.4% of the index. If you adjust the international revenue to reflect the market cap weightings of the S&P 500, it's true international exposure is more like 40% given how truly global in nature the largest companies are.
The continued success of US companies in international markets is highly dependent on global consumers viewing American brands positively and wanting to spend their hardearned money at Americanowned companies. Take McDonald's as an example. As of the making of this video, McDonald's has a market cap of $220 billion and is ranked number 30 on the S&P 500.
Let's just say for better or for worse, McDonald's is viewed as an iconic American brand with restaurant locations throughout the world. Roughly 40% of McDonald's sales come from outside the US. This number is only expected to grow as international expansion is crucial to McDonald's growth strategy.
McDonald's management is projecting opening 10,000 new locations over the next few years, a whopping 9,000 of which are planned to be open outside the United States. Tariffs by the US can result in the international operations of American brands facing backlash. We have already seen this start to happen with people around the world calling for a boycott on American companies.
Going back to the example of McDonald's, global consumers may decide that they no longer want to eat at McDonald's as a result of this geopolitical tension. With over 90% of McDonald's planned future location growth forecasted to happen internationally, a global boycott would negatively impact McDonald's ability to continue to grow its revenue and earnings.
This is why the stock market has reacted so negatively to tariffs. The companies that make up the S&P 500 would likely get hit from both sides. On one hand, their costs would increase due to tariffs on goods they import from overseas. They would try to pass those costs on to consumers, but this would likely result in demand destruction from the higher prices.
At the same time, these companies international operations would likely come under significant pressure due to the geopolitical tensions. However, deglobalization only tells part of the story of the challenges facing the stock market. According to Howard Marx, to make matters worse, the US stock market started this year trading at extremely elevated valuations relative to history.
This caused Howard Marks to release a memo entitled bubble watch in January. Listen to what he had to say when asked about what investors could expect for future returns from the stock market. When you're measuring how to decide the risk and reward of given asset classes in this type of environment that could go in a multitude of different ways.
How do you understand where there's value? what a return is that would justify a risk at a time when you know potentially you could get 7 8% 9% with credit with stocks they have delivered more than 10% for the past number of decades but going forward I want to respond first to your last sentence stocks have uh delivered an average of 10% a year for the last h 100red years but not when the PE ratio was 19 and the PE ratio today is probably 19 the average return has been So we can say that when the PE when the PE ratio averages 16, the return average is 10.
But when the PE ratio is 19, my guess is if you look at history, if you bought the P the S&P when the PE ratio was 19, historically, you probably made let's say 1 to 6% a year or 2 to 7% a year, something like that, but certainly not 10. and and so uh you know what you pay matters and the price of the S&P is elevated relative to historic levels.
So you shouldn't expect historic returns. When the stock market starts at a high valuation, meaning prices are expensive relative to earnings, it usually sets the stage for lower returns in the future. Why? Because much of the future optimism is already priced in. Investors are paying more today for each dollar of earnings.
So there's less room for prices to rise without a big jump in profits. The higher you start, the harder it is to keep climbing. To demonstrate what Howard Marks means, let's use an example of buying a pizza shop as an investment. This pizza shop earns $100,000 a year and is selling for $500,000. Paying $500,000 would earn you a solid 20% annual return on your investment.
The $100,000 annual profit divided by the $500,000 purchase price. However, let's say a social media trend starts that causes pizza shops to become very popular investments. There suddenly becomes a lot of bidders for the store and the price shoots up to $1 million. The business still generates $100,000 a year in profit, but as a result of the higher purchase price, the annual return falls to 10%.
With this higher purchase price, you as the owner are betting on the profitability of the store increasing significantly. That's what happens when you invest in the stock market at a high valuation. You're paying more today for the same earnings, so your future returns naturally shrink. This isn't just a theory.
This is proven out by the data. Take a look at this chart. On the bottom, you have the current forward PE ratio of the S&P 500. On the left, you have what the annualized return was over the following 10-year period. As you can see, as the PE ratio for the stock market increases, the future returns investors can expect decreases.
When Howard Marx wrote his memo titled on bubble watch, the S&P 500 was trading at a forward PE ratio of 22 times. This would imply a future 10-year annualized return of somewhere between 0 and 3%. So, with this being the case, what does Howard Marks recommend investors do given where valuations stand in the stock market?
Mark says it would be wise for investors to put a meaningful portion of their portfolio in bonds, saying in a recent memo, "The current level of offered yields implies higher returns from credit than the S&P 500 with returns that are contractual and thus subject to much less variability and uncertainty." If you made it this far in the video, it's obvious you are serious about learning about investing from worldclass investors like Howard Marks.
If that is the case, make sure to check out this video here. Howard Mark's 78 years of investing wisdom in 60 Minutes because with over 1 million views, it is an absolute mustwatch. I will see you over there.
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