Howard Marks (Trades, Portfolio), co-chairman of $122 billion asset manager Oaktee Capital, gave his thoughts on trends in economic assumptions on Wednesday in one of his "memos."
The paper, titled "This Time It's Different," recalls the words of John Templeton that most investors know as meaning the opposite. Marks applies the phrase to say that things would have to be different for a list of nine economic propositions gaining popularity to be true. These include, "There doesn't have to be a recession," "Continuous quantitative easing can lead to economic prosperity" and "Federal deficits can grow substantially larger without becoming problematic."
Marks then gave a lengthy analysis of each of the points, including a discussion of modern monetary theory in which he addresses one of its leading proponents. He concluded that the wide acceptance of the points, which amount to "things can only get better forever," amount to the third stage of a bull market. While investors should keep up with economic trends, they should mind the lessons of the past.
Read Marks' memo here.
