Friday, December 19, 2014

Oaktree's Howard Marks: "The Lessons Of Oil"

Following up on "Oaktree's Howard Marks On Lessons From the Oil Crash, Russian Crisis".

From ValueWalk:

Howard Marks Latest Memo: The Lessons Of Oil
Howard Marks Latest Memo, which he recently mentioned he was working on. Contains a shoutout to Jeff Gundlach, behavioral finance, and all the latest good stuff.
Check it out below:
I want to provide a memo on this topic before I – and hopefully many of my readers – head out for year- end holidays. I’ll be writing not with regard to the right price for oil – about which I certainly have no unique insight – but rather, as indicated by the title, about what we can learn from recent experience.

Despite my protestations that I don’t know any more than others about future macro events – andthus that my opinions on the macro are unlikely to help anyone achieve above average .performance – people insist on asking me about the future. Over the last eighteen months (since Bernanke’s initial mention that we were likely to see some “tapering” of bond buying), most fact that their fixed income holdings have been too short in duration to allow them to benefit from the decline of interest rates. While this has nothing to do with oil, I mention it to provide a of the macro questions I’ve gotten have been about whether the Fed would move to increase interest rates, and particularly when. These are the questions that have been on everyone’s mind.

Since mid-2013, the near-unanimous consensus (with credit to DoubleLine’s Jeffrey Gundlach for vocally departing from it) has been that rates would rise. And, of course, the yield on the 10- year Treasury has fallen from roughly 3% at that time to 2.2% today. This year many investing institutions are underperforming the passive benchmarks and attributing part of the shortfall to the………….MORE

Here's a PDF version of the memo

Previously on the Oaktree channel:
Oaktree's Howard Marks On Lessons From the Oil Crash, Russian Crisis
Bull and Bear Markets, According to Oaktree’s Howard Marks
Oaktree's Howard Marks: "Dare To Look Wrong, It's Not Supposed To Be Easy"
Knowledge@Wharton Visits With Oaktree's Howard Marks