Howard Marks is the co-founder of Oaktree Capital, a US investment company that specializes in “distressed” securities. His firm manages over $120 billion, and he has a personal worth of $2.2 billion.

Marks is famous for the memos he regularly posts on the Oaktree website.

Example: In 2008, two days after Bear Stearns collapsed, everyone was seeking his advice on where the economy was headed. He wrote a memo titled, “Nobody Knows”.

Example: In March 2020, as stock markets plummeted in the wake of the coronavirus spread, Marks posted a memo entitled “Nobody Knows II”.

“People may ask me for my opinion because they think I’m intelligent, think I’ve been a successful investor, or know I’ve lived through a lot of history,” Marks says. But he says he has no better view of the future than anyone else.

When it comes to the Covid-19, even experts don’t really know much about it. Every virus is different. No-one knows how many will contract it, how many will die, when it will recede, or how it will affect the economy.

But with stock markets were falling around the world, was it a buying opportunity? This is the wrong question to ask, Marks says. “What really matters is whether the price change is proportional to the worsening of fundamentals.”

By that he means: if the real economy is going to take a nosedive, this is reflected in the fall of stock prices. There is not necessarily any bargains. But neither is it a time to sell your portfolio.

Markets often swing from the perception of “flawless” to “hopeless”. A month before coronavirus hit, or was contained to China, there was a uniformly positive view of US stocks. As soon as it became apparent it was spreading fast, sentiment turned opposite overnight.

This tells Marks that “the market can’t be relied on to reflect reason”. Example: Amazon stock saw big declines, even though you’d think Amazon would do well out of the virus, being the key player in e-tail and at home delivery. Gold also fell, when normally it would rise in times of panic.