CORNYVERSE

Global asset markets have remained strong despite rich valuations. Howard Marks of Oaktree calls this an “early stage of a bubble,” warning that investors have slipped into excessive optimism. In this piece, we summarize the equity and bond markets using a four-stage analytical framework based on his key remarks. 🎯 Key Takeaways ✅ Asset prices are rich relative to fundamentals ✅ Early signs of overheating, reminiscent of the 1997 dot-com setup ✅ Use bonds (credit) as a defensive tool 📌 Asset Price Strength and Investor Psychology Marks assesses that stocks are trading above fundamentals. He points out that the absence of a severe correction for 16 years has led investors to mistakenly believe that "current conditions will continue." Such optimism is characteristic of the early stage of a bubble; even if a sharp correction is not imminent, it raises the probability of overheating. 📌 Comparing with the 1997 Dot-Com Bubble Today’s ma...