“They lead me to conclude that the powerful rally we’ve seen has been built on optimism; has incorporated positive expectations and overlooked potential negatives; and has been driven largely by the Fed’s injections of liquidity and the Treasury’s stimulus payments, which investors assume will bridge to a fundamental recovery and be free from highly negative second-order consequences.”
“In other words, the fundamental outlook may be positive on balance, but with listed security prices where they are, the odds aren’t in investors’ favor.”
Howard Marks from June 18, 2020, Oaktree memo
Exactly how I feel, partly due to reading your book, 𝑴𝒂𝒔𝒕𝒆𝒓𝒊𝒏𝒈 𝒕𝒉𝒆 𝑴𝒂𝒓𝒌𝒆𝒕 𝑪𝒚𝒄𝒍𝒆. Thank you for writing books and memos, you have put me miles ahead of investors who do not follow you.👏🏽
🕵🏽 The Federal Reserve money creation was the main force for this recovery and caused investors to overlook the negatives. The stock market will eventually crash unless the Federal Reserve buys stocks.