'I don’t see massive psychological excesses today,' says Oaktree's Howard Marks

Howard S. Marks, co-chairman of Oaktree Capital Management, said he does not see excessive investor exuberance and noted that recent economic and market events have tempered enthusiasm further.

“I don’t see massive psychological excesses today. Recent events have reduced enthusiasm further,” the Oaktree Capital co-founder said at the Moneycontrol Global Wealth Summit 2025.

Still, he warned that periods of optimism often lead to poor investment decisions. “Bad deals will be done when things are too positive, which will be exposed during slower times, turning to losses,” he said.

Marks highlighted the importance of valuation in investing. “If you’re looking at a business to hold for the long term, you want to make sure the price is reasonable. That makes sense,” he said. Over time, this philosophy evolved into a strict focus on discounted valuations, at times disregarding future potential, he added.

He also drew a distinction between growth and value stocks, linking their appeal to market sentiment. “People suggest growth stocks are stocks with high rates of growth in the future, while value stocks are modest prices, focused on the present. If you believe growth investing is future-oriented, it is more widely accepted during optimistic times. But when people are more cautious, they look for value in the here and now.”

On market cycles, Marks pointed out that optimism has largely prevailed for 16 years, supporting growth stocks. “The pandemic didn’t really last and have a profound effect on the markets. That’s a big part of why growth stocks have done so well,” he said. “But there will come a time for value.”