"Wall Street icon" Howard Marks recommends selling equities buying high yield bonds (BUT!)

<p>Howard Marks is a legend, sure. And media outlets are gushing over his latest memo titled:</p><ul><li>Further Thoughts on Sea Change</li></ul><p>Marks wrote his original "Sea Change" memo in December 2022 saying that, in a nutshell:</p><ul><li>the changes I described in Sea Change aren’t just usual cyclical fluctuations; rather, taken together, they represent a sweeping alteration of the investment environment, calling for significant capital reallocation.</li></ul><p>His updated 'Further thoughts …' memo recommends, again in a nutshell:</p><ul><li>credit securities are likely a much better risk-adjusted investment than equities at the moment</li><li>it may be prudent for investors to reallocate their capital accordingly, particularly into high-yield bonds</li></ul><p>Like I said, media outlets are gushing with praise. They love bears, and to be fair Mark's points are not unreasonable at all. </p><p>But I think the gushing is misplaced. Mark's published his updated memo on October 11, the but is (and it's a BIG BUT!) Mark's leads off with this:</p><ul><li>In Further Thoughts on Sea Change … This memo was originally sent to Oaktree clients on May 30, 2023.</li></ul><p>Bolding is mine. And let me say again, Mark's leads off with this, he is quite clear he originally published this 4 months ago.</p><p>Nowhere in the media gushing has this been mentioned, that it's a four-month-old view. That hasn't aged particularly well. </p><p>OK, Mark's views are not meant to be applied over a 4-month time horizon, but I do think its at least worth mentioning. </p><p>Anyway, each to his own. </p><p>–</p><p>US 10-year yields have rocketed since end-May:</p>

This article was written by Eamonn Sheridan at www.forexlive.com.