Bloomberg Podcasts · Howard Marks Flags the Uncertainty in AI Investing

1. 1. Howard Marks prefers a less activist Fed that communicates less about future policy, forcing markets to be antifragile.
2. 2. Marks says markets have been ruled by optimists since October 2022, with the S&P more than doubling, warranting caution.
3. 3. The U.S. economy is the best-performing developed economy, and excitement over AI plus the TINA trade fuel market optimism.
4. 4. Marks warns that AI could cause massive job losses in Middle America and urges a government task force to study the impact.
5. 5. Oaktree uses AI for data marshaling and early analysis but does not delegate investment decisions to it.
6. 6. Marks compares AI's impact on active investing to indexation: it will put many active investors out of business, but not the best.
7. 7. Marks says AI investing is marked by exuberance, but it's unclear if it's irrational because no one can spec out AI's future profitability.
8. 8. For pure AI companies with no profits, quantifying earnings potential and intrinsic value is unusually uncertain, making it hard for value investors.
9. 9. Marks argues that uncertainty doesn't mean you shouldn't invest, but it should inform how much you bet and which form of AI investing you choose.