Howard Marks Memo: market movement during previous financial crises.

by HumbleHitch

2001-2002

  • 9/1/00 – 4/4/01 -27%
  • 4/4/01 – 5/21/01 +19%
  • 5/21/01 – 9/21/01 -26%
  • 9/21/01 – 3/19/02 +22%
  • 3/19/02 – 10/9/02 -33%

2007-2009

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  • 10/9/07 – 3/10/08 -18%
  • 3/10/08 – 5/19/08 +12%
  • 5/19/08 – 11/20/08 -47%
  • 11/20/08 – 1/6/09 +25%
  • 1/6/09 – 3/9/09 -27%

www.oaktreecapital.com/docs/default-source/memos/calibrating.pdf

“In my opinion, the difference between most people’s positive and negative views is likely to stem largely from their innate biases, and thus the data points they choose to overweight.”

Its possible people who were fully invested going into February of 2020 are the most eager for a V-shaped recovery, and people who were prudent enough to be in cash are more willing to consider a future retesting of previous lows. Uncertainty reigns supreme right now. We should have been open to the possibility, regardless of probability, of a financial crisis worse than 2008. Now we should be willing to concede that the market may have further to fall as new economic data comes in.

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