I agree with Marks wholeheartedly and he says a big correction is not necessarily coming any time soon.

He’s saying the market is historically quite overvalued and could stay that way for some time. He’s also saying a legal contract for you to be paid a fixed sum with a bond is considerably less risky than the hope of returns owning a piece of a business purchased at a high price.

Marks has never talked his book. He made his fortune early on buying wildly mispriced high yield securities at a time when the world thought that was nuts. But he sought value. Often found under a rock or under a cloud.

Marks believes theres a very high likelihood of “acceptable results” across numerous scenarios with the purchase of quality bonds. But, importantly, fewer disaster scenarios.

He believes the range of outcomes with equities includes much higher potential upside returns with many more poor or terrible return scenarios.

This isn’t talking his book. This is rational economic thought in an otherwise irrational world. A world in which Buffett has about 1/4 of his company in common stocks. I don’t think that’s mere coincidence. When Marks publishes something, Warren says he’s quick to read it. Good advice imo.

Berkshire Hathaway FAQ

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