In his latest interview at The Milken Institute Global Conference, Howard Marks described this latest cycle like a meteor hitting earth from outer space. Here’s an excerpt from the interview:
Marks: We’re in an unusual circumstance. First of all the cycle we’ve gone through in the last 18 months of the pandemic was not really a normal cycle.
Normal cycles in my opinion are the result of people becoming too optimistic and overshooting intrinsic value, fair value, and then a correction toward fair value, but it carries through to underpriced and then people get too pessimistic and then a correction back toward fair value, but it overshoots and heads to excessive.
So excess and correction. Excess and correction is the normal source of a cycle.
This cycle had nothing to do with the economy. This was like a meteor hitting the earth from outer space. It was an exogenous event, the pandemic and then the government policies, government fed policies undertaken to correct it.
You can watch the entire discussion here:
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