Investments

Billionaire investor Howard Marks says we’re not in a bubble, but there are reasons to take less risk

Billionaire investor Howard Marks says we're not in a bubble, but there are reasons to take less risk

Key Points

  • "The economic expansion and the bull market are old," Howard Marks tells CNBC's Wilfred Frost.
  • There's a lot of uncertainty in the world and it strikes me that one should not have as much risk as one did three years ago or six years ago," he says.
  • Still, Marks thinks the current bull market can rise further as the U.S. economy is, to some extent, "the envy of the world."
  • Howard Marks, Co-Chairman, Oaktree Capital 

    Investors should take some risk off the table in 2020 given some of the challenges the market faces, billionaire investor Howard Marks said on Tuesday.

    "The economic expansion and the bull market are old," Marks told CNBC's Wilfred Frost. "Valuations are above average. There's a lot of uncertainty in the world and it strikes me that one should not have as much risk as one did three years ago or six years ago."

    Stocks hit record highs on Nov. 27, boosted by improving economic data and apparent progress on U.S.-China trade talks. However, uncertainty around the trade situation has risen lately.

    National Economic Council Director Larry Kudlow said Tuesday that additional tariffs slated to take effect Sunday are "still on the table." Those comments came after multiple reports pointed to a possible delay on those tariffs.

    But Marks — who co-founded Oaktree Capital Management in 1995 — thinks the current bull market can rise further. The uncertainties are "not to say I think it's going down … but I think there are reasons to have less risk going forward than you have had in recent years."

    He also pointed out the U.S. economy is, to some extent, "the envy of the world." Marks' remark followed last week's release of jobs creation data that easily topped analyst expectations. The U.S. economy added 266,000 jobs last month, blowing a Dow Jones estimate of 187,000 out of the water.

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