Markets

Billionaire investor Howard Marks says investors are 'not discriminating' between stocks as market sells off

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Key Points
  • "What I've been saying for months is that I'm afraid to be in the market today. I'm also afraid to be out," Marks said.
  • The major U.S. stock indexes fell more than 3% on Monday, with the Dow Jones Industrial Average down more than 1,000 points.
  • Marks, whose firm has about $125 billion in assets under management and is mostly invested in the credit market, said there was not one specific area that he thought offered a great buying opportunity.
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Howard Marks on investor psychology during coronavirus fears

Billionaire investor Howard Marks said he is unsure about the risk of the coronavirus to the markets but that Monday's sharp fall for stocks was a product of a change in sentiment and not pessimism about individual companies.

"On a day like today, people, for the most part, are making market-wide reactions. They're not discriminating," Marks said on CNBC's "Halftime Report." "When things are placid, people make distinctions. When there's panic, they take them out and shoot them all."

The major U.S. stock indexes fell more than 3% on Monday, with the Dow Jones Industrial Average down more than 1,000 points. The pullback was widely spread, with decliners at the New York Stock Exchange outnumbering advancers nine to one, according to FactSet.

Marks, the co-chairman of Oaktree Capital Management, said investors tend to be too optimistic or too pessimistic about economic conditions.

"A week or two ago, people thought it was flawless. And now today they think it's hopeless," Marks said.

The market has sold off amid rising fears about the impact of the coronavirus outbreak on economic growth. There were more 79,000 confirmed cases of the virus around the world, with new cases in Italy and South Korea accelerating over the weekend.

Marks said that the market is slightly expensive compared with historical levels and that he is unsure what the impact of the coronavirus outbreak will be.

"What I've been saying for months is that I'm afraid to be in the market today. I'm also afraid to be out," Marks said.

Marks, whose firm has about $125 billion in assets under management and is mostly invested in the credit market, said there was not one specific area that he thought offered a great buying opportunity.

"They're are no screaming bargains today. It's all a matter of finding the examples within each asset class that are a little more attractive than the others," Marks said.

Marks also said that he would support former New York Mayor Mike Bloomberg's presidential run and would be open to a higher personal income tax rate and a financial transactions tax.