Optimism has prevailed for the past 16 years, said Howard Marks, Oaktree Capital

Howard Marks, Co-Chairman, Oaktree Capital Management (Reuters File Photo)

The pandemic-related downturn didn't last or have a profound effect on the markets. Optimism has prevailed for the past 16 years, since the Global Financial Crisis, said Howard Marks, co-founder and co-chairman, Oaktree Capital, speaking at the Moneycontrol Global Wealth Summit 2025.

However, cycles come and go every generation. "People will always get overexcited when things go well and take asset prices too high. And then when things come off, they'll get too depressed and they'll take prices too low," said Marks.
He added, "When things are going well, people will lever up their enterprises in order to magnify the gains. And they'll do that because they underrate the probability of losses and they forget about the potential of leverage to magnify losses instead of gains."

As a result, bad deals will be done when periods are too positive, and those will be exposed in slower times through losses. However, in the current landscape, Marks doesn't see massive psychological excesses.

Further, given the events of the last days and weeks, the enthusiasm has been reduced further. "But I think that we know that the ratio on the S&P 500 is at an above average level, maybe warranted based on the excellence of the companies in it or maybe not, but it is certainly not underpriced," he said.
Despite the current landscape, it is not time for unusual investments. "This may sound like it's a bit of an exaggeration, but probably it's not," he added.

The Moneycontrol Global Wealth Summit 2025 is a flagship, premier platform that brings together leading Indian and global investors, titans of Indian business, policy-makers and other important mover and shakers in the financial market ecosystem to decode the puzzle of wealth creation in India.