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Investing.com -- Howard Marks, co-founder of Oaktree Capital Group LLC, has cautioned investors about the potential for lower returns in the future. He stated that the strategies that yielded significant profits in the era of easy money might not be as effective in the coming years.
Marks, a renowned investor, discussed the market’s irrationality during the recent rally driven by artificial intelligence. He expressed concern about overvaluing the fundamentals of high-priced companies, especially at a time when the Federal Reserve shows no urgency to revert to the zero-interest rate period of the past.
Bloomberg reports that during his speech at the Global Alts conference in Miami, also known as Hedge Fund Week, Marks stated, "I don’t believe that the next 10 years will be characterized by declining interest rates or ultra low interest rates."
Marks also commented on the market reaction to the news about Nvidia (NASDAQ:NVDA), a leading tech company. He suggested that the market’s swift response indicates the significant role of investor psychology and the short-term irrationality of the markets. He said, "If it were just objective, clinical, unemotional investors looking at Nvidia, there would be no reason why yesterday’s news should knock all these other things down. It just shows you the pervasiveness of psychology and the irrationality of the markets in the short run."
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