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EssentialThe Essential Conversation

Howard Marks & Joel Greenblatt: Is It Different This Time?

Featuring Joel Greenblatt and Howard Marks

Feb 12, 2021 • 61 minutes

Essential

The Essential Conversation

Howard Marks & Joel Greenblatt: Is It Different This Time?

Is investor exuberance rational or irrational? Legendary investors Howard Marks and Joel Greenblatt explore.

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Featuring Joel Greenblatt and Howard Marks

Feb 12, 2021 • 61 minutes

Howard Marks, co-founder and co-chairman of Oaktree Capital Management, welcomes Joel Greenblatt, founder and co-CIO of Gotham Asset Management, for an exploration on whether market exuberance is rational or irrational. Marks contends that the current investor optimism is largely a man-made artifact of monetary policy in order to stave off an economic recession. Greenblatt argues that mega-cap tech stocks like Amazon, Alphabet, and Microsoft are reasonably valued despite their remarkable price appreciation. Marks and Greenblatt agree that the Fed's promise to keep rates low for many years is a true gamechanger in the valuation of assets, and they discuss whether high inflation could change this. Lastly, Marks and Greenblatt compare different styles of investing and share timeless lessons they have learned over the course of their careers in finance. Marks and Greenblatt discuss ideas from Marks' latest memo, "Something of Value." To read this memo, click here: https://www.oaktreecapital.com/docs/default-source/memos/something-of-value.pdf. Filmed on February 5, 2021. Key learnings: Marks and Greenblatt contend that the prospect of sustained low-interest rates may indeed mean that "this time is different," and that optimistic valuations may be justified by the lowering of the "discount rate" by which future cash flows are priced in the market. Nevertheless, market optimism is very high, so having a sufficient margin of safety when allocating capital is absolutely necessary.

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The Essential Conversation is the world's premier financial-market-focused conversation series. The smartest people in markets, finance, economics, and business engage in deep-diving discussions about the global macro landscape, generating actionable takeaways that can help your decision-making process. Tune in to peer-to-peer conversations between the brightest minds in the investing world, and tune up your portfolio.

More Episodes

The Essential Conversation is the world's premier financial-market-focused conversation series. The smartest people in markets, finance, economics, and business engage in deep-diving discussions about the global macro landscape, generating actionable takeaways that can help your decision-making process. Tune in to peer-to-peer conversations between the brightest minds in the investing world, and tune up your portfolio.

More Episodes

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