Howard Marks is one of the most prominent investors in the world. He infrequently releases his thoughts on economic matters. Even Warren Buffett likes to read Mr Marks' thoughts.
He has released his latest memo with his thoughts about the coronavirus and the market.
It's called "Nobody Knows II". The last time he used this title was two days after Lehman Brothers' bankruptcy filing.
He said that anything he thinks and says is a guess, just like anyone else's. He pointed out that the coronavirus is still new so the experts don't know much about it yet.
He raised a number of questions about how many people will get infected, how long it could take to calm down, how many people may die, what the effects on the economy will be and so on.
You should give it a read.
What is his conclusion?
Well, he said that people are asking is this "the time to buy?" He said it's probably "a time" to buy because share prices are lower in absolute terms than they were two weeks ago. It is entirely unanswerable to know if shares will be lower in the weeks and months ahead. There is no basis to say shares will rise or fall 10% over the next few weeks because that's trying to guess investor psychology.
The most important question to ask is whether shares are now priced attractively?
He concluded with "it's okay to do some buying, because things are cheaper. But there's no logical argument for spending all your cash, given that we have no idea how negative future events will be.
"What I would do is figure out how much you'll want to have invested by the time the bottom is reached – whenever that is – and spend part of it today. Stocks may turn around and head north, and you'll be glad you bought some. Or they may continue down, in which case you'll have money left (and hopefully the nerve) to buy more. That's life for people who accept that they don't know what the future holds.
"But no one can tell you this is the time to buy. Nobody knows."
This is what I plan to do, buy some more shares this week and keep investing if the market keeps dropping.
