Oaktree Capital's Marks: Trump likes "unpredictability," current U.S. stocks are "not cheap" but still "not in a bubble."

As global stock markets rebound to historic highs due to Trump's suspension of tariff increases, the co-founder of Oak Tree Capital Management has issued a warning: investors should not harbor illusions about this calm. On June 12, at the Morgan Stanley Australia Summit held in Sydney, Howard Marks, co-founder of Oak Tree Capital Management, pointed out that Trump will remain unpredictable for a long time, and the current "high" market valuations require investors to maintain a cautious stance. Marks stated: (Trump) as a seasoned negotiator values unpredictability, and I believe this situation will last for a long time. He warned that the U.S. president "will not explain himself, and this may be intentional." For investors, Marks emphasized that any bets based on a clear policy path could be extremely dangerous: Don't think that once the 90-day pause is over, everything will be settled. At the same time Marks made these remarks, reality happened to confirm his viewpoint. Wall Street Journal reported, Trump is planning to send letters to trade partners, threatening to unilaterally impose tariffs before the July 9 deadline. This dramatic turn of events undoubtedly dealt a blow to market optimism. High Valuations: "Trouble" Under Optimism Since the volatility triggered by Trump's implementation of so-called reciprocal tariffs in early April, global stock markets have rebounded due to Trump's suspension of tariff increases. However, this rebound, in Marks' view, hides risks. The abundance of optimism in the market has led to "high" valuation levels, and he stated: We need to remain cautious. The legendary credit investor candidly expressed that global asset prices are at or near historic highs, a fact that is "troubling." In this environment, finding "assets that can be called cheap" has become exceptionally difficult. However, he also added a crucial nuance: the current market has not yet shown signs of "psychological excesses" that characterize a bubble. In other words, while the market is expensive, it may not have entered a state of complete irrational exuberance yet. Debt Clouds Increasing Uncertainty In addition to geopolitical turmoil and high market prices, there is another structural risk that is accumulating. Marks pointed out that the growing scale of U.S. debt is creating "huge uncertainty." As a top credit investor, Marks' career has been built on a deep understanding of risk and cycles. However, regarding the timing of when the debt issue might trigger a crisis, he candidly admitted it is difficult to predict: I don't think I can figure this out any earlier than anyone else. This candor further reinforces his core message: in the current environment of multiple intertwined uncertainties, the primary task for investors is not to predict the next hot trend, but to manage downside risks well