Howard Marks tells investors how to make money in markets today

Talk of an asset price bubble is overblown as the US economy remains on a bumpy track to a soft landing characterised by moderate inflation and economic growth, according to leading US credit investor Howard Marks. 

Speaking at the Morgan Stanley Australia Conference on Thursday Marks labelled asset prices "lofty, but not nutty" and told investors to ignore the noise and focus on long-term returns. 

"Inflation's coming down and we don't have a recession and it looks like we have an [economic] soft landing," Marks told the Summit. 

"We've had a swing in the markets from pessimism to optimism, so some of the terms are being set by optimists. I like it when people are pessimistic as that's when you get a bargain, so we have to be cautious that's all."

Asset prices not in a bubble

Marks who founded $US203 billion credit manager Oaktree in 1995, said his general investment philosophy is to tune out the daily headlines to focus on lending companies he expects to pay him back on yields. 

"I call our performance analogous to my favourite Italian restaurant near the office. I say, always good, sometimes great, never terrible. And that's our goal," he said. 

Oaktree counts 64 of the 100 largest pension funds in the US among its clients as it targets big debt, credit, equity, real estate, and fixed-income offerings. 

However, Marks says he worries little about forecasts for macro-economic moves, or shifts in global interest rate cycles. 

The New York-based investor also dismissed concerns asset prices are in a bubble fuelled by responses to pandemic-era lockdowns and fiscal deficits handed down by governments across Japan, Europe and the US. 

"I don't see enormous excesses I don't see security prices that are crazy high, lofty if not nutty," he said.

"Ignore the short term and rise and fall of rates, invest and care about the things that matter," he said. "What really matters is can you buy companies that will grow and lend to companies that will pay you back, that's my advice." 

He added that he thinks it's a mistake to believe anybody in the market has particular advantages in forecasting the  direction of interest rates, or commodity prices, consistently better than others. 

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