Howard Marks stated: Do not let emotions affect your judgment in war

Howard Marks, co-founder of Oak Tree Capital, warned investors to remain calm in the face of the Middle East conflict and to avoid emotional decision-making, while also being vigilant about cracks appearing in the private credit market. On March 3rd, Howard Marks stated via video link at the Australian Financial Review Business Summit in Sydney that investors need to avoid heightened emotions when making risk exposure decisions due to the Middle East conflict. Marks emphasized that the most important thing in the current situation is to recognize the vast unknowns. He pointed out that the duration, scale, and ultimate outcome of the conflict are all unpredictable. He candidly highlighted the dangers of emotional decision-making in his speech. "It's easy to let it affect your emotions, but that may not be very helpful," he stressed, "the outcomes are unpredictable." He further advised investors to exercise restraint in the face of high uncertainty. "Since we don't know what this means, there may not be any smart things to do." At the same conference, Franklin Templeton CEO Jenny Johnson expressed a relatively optimistic view, believing that the conflict is unlikely to last more than five weeks. However, U.S. President Trump had previously made it clear that there is no fixed timeline for this war. Over the weekend, the U.S.-Israel attack resulted in the death of Iranian Supreme Leader Khamenei, causing a severe shock to the energy market. In response, Iran continued to launch missiles in the Middle East. Video screenshot, Howard Marks Concerns in the Private Credit Market In addition to geopolitical risks, Marks also issued a warning about the private credit market. He noted that due to the massive expansion over the past decade, the level of specialization in private credit has significantly decreased. Marks observed that cracks are appearing in some corners of the market, and these risks may be underestimated by some. He mentioned the bankruptcy cases of subprime auto loan company Tricolor Holdings and U.S. auto parts manufacturer First Brands Group. "There have been moments like this," Marks said, "you can feel these tremors." But he also pointed out that cognitive dissonance leads people to reject information that contradicts their biases. "People and markets often resist new information for a period of time, rather than gradually adapting, and then suddenly yield," Marks warned