During this interview with Yicai Global, Howard Marks emphasizes his expertise in debt over stocks and admits he is not a technology expert. He recalls the Internet bubble, noting that while the Internet did change the world, most tech stocks from that era became worthless.
He draws a parallel with today’s hype around artificial intelligence, acknowledging its potential to change the world but cautioning that it may be over-hyped, with only a few companies likely to succeed.
Marks refrains from investing in AI due to his uncertainty, though he acknowledges its future impact will be significant.
Here’s an excerpt from the interview:
Marks: First of all, Yin Fan, I don’t invest in stocks, I invest in debt. Secondly, I’m not a technology expert, I know more about traditional industries. No one should listen to my opinions too much.
I have some sense of that. What people were saying in 1998 and 1999 was that the Internet was going to change the world. What everyone is saying today is the same: artificial intelligence will change the world.
I didn’t know much about the Internet at the time. Not being a tech expert, I couldn’t make an assessment of it. I just thought that no matter how good it would eventually become, it was overhyped and over-hyped in the market. The result? The Internet did change the world.
But most of the stocks that emerged in the ’99 tech bubble ended up being worthless. One of the characteristics of a bull market is that people act as if everything is going to succeed. In fact, successful companies are usually very few and very rare.
As a layman, I have no doubt that artificial intelligence will change the world. I don’t know exactly how it will change, and I have absolutely no idea when it will happen, and I don’t know which companies will succeed. This is also a big reason why Oaktree Capital and I don’t invest in these areas.
Some people think they know how to do it, and they invest in it. Some are right, some are wrong. And I know I don’t know. But I heard Elon Musk speak at the Milken Forum in Los Angeles two months ago and said that Tesla and SpaceX are not using artificial intelligence yet.
I think that like most new things, it may be a little over-hyped. Maybe people are expecting its application a little too quickly. But I think its power will be huge.
You can watch the entire interview here:
Howard Marks Interview – Yicai Global
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