Howard Marks on the Outlook for Interest Rates, Bitcoin, AI and Public Debt

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Howard Marks. KY Cheng/South China Morning Post/Getty Images Howard Marks says interest rates aren’t going back to zero any time soon. The billionaire investor warns that rising US federal debt could cause problems in the future. Marks says AI won’t replace top investors, and the banking fiasco has put bitcoin in the spotlight.

Interest rates won’t go back to zero anytime soon and top investors won’t be usurped by artificial intelligence, says Howard Marks.

The billionaire investor and co-founder of Oaktree Capital Management also sounded the alarm about rising public debt, suggested bitcoin had its uses, and called on the Federal Reserve to intervene in the economy as little as possible. He spoke on a recent episode of the “We Study Billionaires” podcast.

Here are Marks’ 8 best quotes from the interview, slightly edited for length and clarity:

1. “Lower interest rates were responsible for the majority of all the money that has been made over the past 45 years.” (Marks hailed the Federal Reserve’s embrace of the rate cut as a “radical change” for financial markets because it made borrowing cheaper and debt financing easier.)

2. “Rates are high today to fight inflation. I don’t think they’re going to stay that high. But they’re done falling significantly and they’re done being ultra-low.”

3. “I just think it’s too good to be true to think that we can have a credit card that we never have to pay the balance on.” (Marks warned that the continued growth of US federal debt will likely have serious consequences down the road.)

4. “AI, like passive investing and machine learning, even perhaps to a greater extent, will knock out anyone who doesn’t add value. It should be increasingly difficult to manage money and getting paid a lot of money for producing inferior products. But hopefully there will always be a small group of people who can do something that the machine can’t do.”

5. “Can a computer with AI sit down with CEOs and figure out which is Steve Jobs? Can it sit down with five business plans and figure out which is Amazon? I just don’t think so. .It’s an art to train.”

6. “There are people who believe that when there is a banking crisis, like we have with Silicon Valley Bank and others, the weakness of the banks shows the strength of bitcoin. in many ways an anti-banking game There seems to be some good uses for some coins, and bitcoin seems to be the one leading the way so far.”

7. “Humility is a really important thing, especially in the market, which humbles us all. Anyone who does not allow humility, in a field where there is chance and uncertainty, and where qualitative things and subjective are important, roll for a fall.”

8. “People were talking about the factory of the future, which would have a man and a dog, and it was the dog’s job to keep the man from touching the equipment. It was the man’s job to feed the dog. I like that the Fed keeps its hands on the machines most of the time.”

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