"Howard Mark" advises investors to adjust their strategies in response to the ne

[Daniel Week-Sewis]

"Howard Mark" advises investors to adjust their strategies in response to the new financial world context.

Recently, Howard Marks, co-founder and co-chairman of Oaktree Capital Management, a leading alternative investment asset management company, The world was honored to participate in the seminar. which was held in Bangkok Covers topics on investment, inflation, investment opportunities in Chinese stocks, and AI technology and economic stimulation. Howard is an investment guru who has been in the industry for more than 50 years and has created a legend that is remembered in the world of finance and investment.

Throughout his tenure as Oaktree's Co-Founder and Co-Chairman, Howard has been a prominent investor in alternative assets and contrarian investing. During his visit to Bangkok Howard spoke with financial experts in attendance. They opened the forum by bringing up their famous investment record, "Sea Change".

Sea Change: Howard led the panel to explore the concept of "Sea Change," which addresses the impact of global factors on the investment landscape. and recommend strategies to adapt He explains the recent change in the financial context. This makes borrowing money and maintaining a satisfactory capital structure no longer easy. This is related to the concept of "Sea Change", which refers to a major transition from the era of easy money, in which interest rates were reduced to very low levels over the past 13 years. We are now entering an era where interest rates cannot remain at these levels. However, Howard predicts a different financial and investment environment over the next 10 years and emphasizes fundamental adjustments to adapt to the times. to the changing financial world context with factors supported by higher interest rates

Consider Diversification: Howard has a different approach to investing than Warren Buffett, who recommends holding all investment assets in one basket. Then watch closely. Howard's investing style is conservative. He aims to invest by tapping into the potential of changes that occur. to investing in high-yield bonds that are currently attractive This is in line with the Sea Change concept that reflects the importance of allocating fixed income assets into future investment portfolios. If looking from 2012 to 2020, which is a challenging time. while investment yields low returns Until now, the investment direction has changed. High-yield debt instruments therefore have a better chance of making a profit. Howard also urged investors to reevaluate strategic investment approaches to secure better returns.

Inflation: When asked how long will it take for inflation to return to normal? Howard provides detailed information on the factors affecting inflation and the challenges of forecasting future inflation trends. He commented that Inflation has become a temporary condition. And it was above the expectations of the US Federal Reserve (Fed). The latest round of inflation was caused by a huge injection of liquidity into the system. Reducing policy interest rates after the COVID crisis In addition, the government measures to pay compensation to alleviate the impact. whose checks were distributed widely Even people who were not severely affected by the COVID crisis will receive compensation money. This causes more money to accumulate in the bank. and when Covid subsides The demand for money therefore increases as well.

Moreover, the global economic stagnation has disrupted production and transportation mechanisms. Resulting in supply chain problems. Intensifying demand and supply chain problems are also among the factors that are leading to inflation.

Howard analyzed the Fed's response. and noted about the Fed's initial forecast that Inflation is temporary. before seeing signs of the long-term persistence of inflation and begin raising interest rates at the end of 2021 to reduce the heat of inflation. By Howard believing that Inflation may decrease by its own mechanism as people spend excess money. and the supply chain returning to full operation

When talking about future inflation trends Howard looked at that. It is still impossible to predict with certainty, although in the past few years many central banks have set a target to keep inflation at 2%, achieving this goal is challenging. Factors such as the fading trend of globalization go down Increased bargaining power of trade unions and advancements in artificial intelligence (AI) technology that affect production efficiency. It has come to play a role in determining future inflation trends.

Howard also noted that AI technology is also a positive factor that may help reduce inflation. It is expected that When production efficiency increases from the use of such technology It would result in more products being released to the market. This reduces price pressure despite uncertainty. Howard also expects Inflation is likely to be at the level of 2-3% from the role of AI in the future and admits that accurately predicting economic trends is difficult.

[RobertVam]

Vital Sign No. 4: Cash Burn / Operating Income Internally, we measure cash burn by looking at free cash flow for a quarter (operating cash flow less capex) and compare it to cash on the balance sheet to calculate a cash out date.