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Howars Marks: Take advantage Of Trumps Own Goal

In his latest memo “Nobody Knows (Yet Again)”, Howard Marks addresses the profound uncertainty facing investors and policymakers amid recent upheavals in global trade and economic policy. Drawing on parallels to the 2008 financial crisis and the Covid-19 pandemic, Howard emphasizes the limits of forecasting in unprecedented situations and the importance of rational, flexible decision-making despite the absence of clear answers.

Here are the key takeaways:

  • Howard stresses that in times of crisis or major change, nobody – including experts – can reliably predict outcomes. Decisions must be made without certainty, and waiting for clarity can lead to missed opportunities or inaction.
  • The new wave of U.S. tariffs, driven by the Trump administration, introduces massive unpredictability for the global economy. While the goals – such as supporting U.S. manufacturing and reducing trade deficits – are logical, the second- and third-order consequences are highly complex and often negative, including higher prices, supply chain disruptions, and potential recession.
  • Howard argues that the benefits of globalization, particularly comparative advantage, have raised living standards worldwide. Reversing this trend through protectionism risks higher costs, lower living standards, and diminished global cooperation.
  • The memo warns that the U.S.’s long-standing fiscal privilege – being able to run large deficits thanks to global trust in U.S. Treasurys – could be jeopardized if international confidence erodes, with serious consequences for the country’s financial stability.
  • Ultimately, Howard likens the tariff developments to an “own goal,” suggesting that the immediate negative effects are likely to outweigh any long-term gains. He encourages investors to remain rational, seek value in dislocated markets, and maintain global relationships despite the uncertain environment.

In addition, Howard recently visited Bloomberg to discuss market cycles and tariffs (video below – but do prioritise the memo!)

On the one hand, if the tariffs remain as announced and retaliation leads to an all-out trade war, the economic consequences could be truly dire. But on the other hand, cooler heads (and highly negative political and stock-market reactions) could prevail, causing the tariffs to be rolled back to less harmful levels, perhaps even leading to gains for free trade.

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The above has been prepared by Børsgade ApS for information purposes and cannot be regarded as a solicitation or recommendation to buy or sell any security. Nor can the information etc. be regarded as recommendations or advice of a legal, accounting or tax nature. Børsgade cannot be held liable for losses caused by customers’/users’ actions – or lack thereof – based on the information in the above. We have made every effort to ensure that the information in the above is complete and accurate, but cannot guarantee this and accept no liability for errors or omissions.

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