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Howard Marks: Expect interest rates to remain high

Co-Chairman and Co-Founder of Oaktree Capital Management, Howard Marks, recently spoke with David Rubenstein of Bloomberg about a number of interesting topics.

Here he says that he expects interest rates to remain high well into the future, about his views on the true value of credit instruments and the psychological aspects of investing.

On the latter, he says, among other things:

The other thing is people believe that there’s kind of a direct and mechanical linkage. If a company has a good event the securities do well, if they have a bad event, like earnings, securities do poorly. But that’s not the case because there’s a intermediate step, which is people’s reaction.

So it’s not just whether the event was positive it’s how people reacted to the event that determines the impact on the security prices, and that’s two different things. So you can’t forget the the psychological and human factor.

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