Join more than 165,000 subscribers and keep yourself informed with the latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
An account already exists for this email address, please log in.
Howard Marks: there's sanity in stocks
Distressed debt investor and author Howard Marks thinks US stocks have further to run.
"I don't think the stockmarket is delirious," distressed debt investor and author Howard Marks tells Dan Weil of The Wall Street Journal. "Valuations aren't terribly high." And even though the US is now well into its "longest recovery on record", it's also been "the slowest since World War II. That suggests not so many excesses have built up".
But when it comes to debt, and government spending in particular,Marks is less sanguine."It's worrisome that the government is applying stimulus in the 11th yearof economic recovery, running a massive deficit and adding so much tothe national debt, yetno one seems to be worried." That's not to say that something bad will definitely happen, but overspending can have consequences, notes Marks.
Running a budget deficit in order "to build a port or bridge" with a high "internal rate of return" seemslogical. But that's not where government spending tends to go. "If you look at societies running hyperinflation, you don't want to live in them. Large budget deficits can lead to that... I've always been told that you can'tprint an infinite amount of money without something going wrong."
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
That said, for all the low interest rates and quantitative easing we've experienced so far, inflation has yet to jump. This, notes Marks, is "very mysterious... it makes me wonder whether the orthodoxy is wrong. As the saying goes, It isn't what you don't know that gets you into trouble. It's what you know for sure that just isn't so'."
Join more than 165,000 subscribers and keep yourself informed with the latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
