There is a problem with debt issues. It's true that the United States is just swiping credit cards limitlessly. The debt has exploded, and the worst-case scenario has come. What is really important at that time? It's important to have no leverage. When asked which area is the most dangerous due to government debt issues, Ray Dalio chose real estate. Hello, this is Seok. It's time to hear Guru's story. Hello. I always look forward to it every month, but was there a time you looked forward to it as much as this month? Because now the market is tough and there are a lot of worries, I'm really curious about our viewers' thoughts. So, what story do you bring today? I'm so curious, starting with this person's story. Oh, who is this person?

Howard Marks. Oh, the market is tough, isn't it? Among these masters, there are some who are particularly good at catching the market trend. I've invited those who are good at creating the current atmosphere. The first one is the mentioned Howard Marks. This Howard Marks, before investing in stocks, always asks seven questions and brings various stories. First, let me briefly explain about Howard Marks. He was born in 1946, now 77 years old this year, with a career of over 40 years. He is the chairman of Oaktree Capital, specializing in distressed debt, and is famous as the memo king. When Howard Marks writes a memo, even Warren Buffett comes to read it, surpassing everything. Looking at this, it seems like more has been added to the memo. It's always like this, more is added to the memo.

Take more notes, more notes, more notes. Hey, this is a note. What I'm doing is taking notes. Hey guys, it's like this, it's amazing, yes, yes. And at the end, I wrote about the temperature coming to the market, but I brought a blanket. I didn't mention that. Right, so this person now places great emphasis on the market cycle. Right now, the market is in a very overheated situation, a hot situation. Or, the market is currently in a very depressed state, a cool state. It's warm at this point, so this person is good at grasping the pulse. So today, I will talk about how they brought a blanket to the market. I'm really curious. Today's content is a compilation of recent notes, Heard Max's lectures, and interviews. Yes, today's main content is like this. How will the depreciation of the market boxes be, predicting the presidential election, as a stock YouTuber.

Investors should not do it, but screen it. We will not predict the stock market. I will explain why we should screen and why we should be cautious. Also, when it comes to hard boxes, they are doing well in the current situation. Personally, one of the reasons I really like Howard Marks is that he makes us think about the fundamentals of investing. When you read his writings, you always end up thinking a lot, right? Therefore, Howard Marks recently mentioned that before investing or while already investing, investors should ask themselves seven questions. He also talked about these seven questions. It's about discussing the checkpoints. Let's start with the U.S. stock market. How does Howard Marks view it? He seems to be quite positive about oil compared to other countries, as the U.S. economy is stronger than expected.

Looking forward, if it seems strong, then if asked whether there are risks in U.S. stocks, even though the economy is good, the question is not about a specific risk factor, but since the U.S. economy is already doing well, it has already risen too much. The only challenge seems to be whether there are more positive factors for it to rise further in the future, in other words, whether the downside has already been fully priced in or not. It doesn't seem like there is a risk that will shake the market greatly and cause a sudden crash, or that the market is currently in a bubble state. So, when you hear this kind of discussion, aren't you curious about recent risks such as concrete issues or whether it's an AI bubble? Regarding these matters, Hard Max has now expressed his thoughts. Firstly, regarding the question about the debt issue, he said, Debt is indeed a problem, but the U.S. has limitless.

Buying a credit card is not just randomly buying a card. It's about making a huge and unknown card. Now, countries are lining up in order of government debt-to-GDP ratio. The country with the highest ratio is Japan, and Italy is second. So, what Harsh Marx is saying is, if the debt-to-GDP ratio is 300% or 350%, nobody knows where the problem lies. There should be a limit to that boundary. Having debt at a certain level is a bit risky, but nobody knows that. That's the first problem. Secondly, if we assume that the limit is reached, what will happen in that situation? No one can provide an answer to that crucial question. Japan's debt is at 250%.

It's really absurd, honestly, if you didn't know, you didn't know, so you have to say it makes sense knowing that and that's why you have to talk about this amazing debt. But you can't say there are no problems now because there are problems caused by this debt, but that doesn't mean something will explode or collapse yet. So even though today Japan has taken actions to raise the boj interest rates, there are still no signs of anything exploding. So, right now, things are just continuing as they are. Therefore, if the U.S. surpasses 130 today, how far can it go before it becomes a problem? It's unknown. If it's unknown, how should you respond to this issue? Howard Marks talks about this issue here. There's a famous quote, isn't there? It's a quote from Mark Twain, also mentioned in the opening of the movie The Big Short. What throws you into a dilemma is what you don't know.

It's not getting into trouble because of not knowing, but getting into trouble because of the misconception of knowing. So, the debt issue has been impressive for a long time, and because of this, hasn't the bond interest rate been bouncing since last year? Think about it. Many people in the United States have pointed out the debt problem since then, and among those who pointed it out, there are also those who left the U.S. market. But those people missed out on a big rise in 23 or 24. So, they missed out on this opportunity for profit because they were under the misconception of knowing. Then, how should we respond to this debt problem? So, there is a saying that Ha Do-mas always enjoys, right? Don't forget to cross a 150cm fence just because you're a 180cm person. Even if the average is 150cm, in some areas, it can be 3 meters, right? So, what if you are 180cm tall, you could fall and die.

Now, Hard Max says that it's not important to survive on average, but it's important to survive in the worst-case scenario. That's why it's important to survive every day. So, no matter what happens, survival is the most important. So, if we think about it in terms of debt problems, when a debt crisis occurs and a problem arises, what is really important at that time? According to Hard Max, it's important to have no leverage. So, industries with high leverage will suffer a big blow in this debt issue, and industries with low leverage will be safer. Then, talking about Japanese companies, there are companies called Shinse in Japan. When read in Chinese characters in Korea, it means Nopo. These are companies with a long history, with a lifespan of about 500 years, sometimes even reaching 1,000 years. How can these companies survive for thousands of years and continue to do business?

When we look into it, the common point of these companies is that they have a lot of cash and almost no debt. That's the common point, right? So, leverage, isn't it a double-edged sword in these cases? So, now, when you look at the profits, you see the same amount of profits, but when you incur losses, the losses also multiply accordingly. Yes, so Howard Marks goes one step further and points this out. People think leverage is a double-edged sword as I mentioned earlier, but that's a misconception. Because leverage is asymmetric. So, when you use leverage, the worst-case scenario is bankruptcy, right? Then, in the worst-case scenario of bankruptcy, there should be a situation where the profit is symmetrical. But that situation doesn't exist when you look at the profit equivalent to bankruptcy. That's why leverage is risky to that extent. However, that doesn't mean leverage is completely

Since you can't avoid leverage, the key is to optimize based on your profitability, such as debt issues and asset situations. When asked which area is the most risky in terms of the leverage issue related to government debt problems, CrowdMax chose real estate. Traditionally, it is a place where leverage is heavily used for investments, which is quite risky. So, how do you think commercial real estate will fare in the future? While commercial real estate itself seems a bit risky, banks are managing their exposure very well. Therefore, even if there is a real estate bubble, it is unlikely to shake the economy. They mentioned that commercial real estate surprisingly may not become a problem. In fact, it's not just the issue of commercial real estate but also the debt problem in the United States.

Sometimes it seems like a very serious issue, and sometimes it doesn't. It's quite ironic because if you remember May last year, there was a big fuss about the debt ceiling. Has the debt decreased since then? No, it has increased a lot. However, no one is talking about debt now. It's ironic. It's not that the bad things have gotten better, but depending on people's interest, it is highlighted as a problem or not. It's ironic how it goes back and forth. But as participants in the market, we have to accept it. Hard Max said it wouldn't be a big problem for commercial real estate. Also, it's impressive that he mentioned the AI now. Is it possible that it's an AI bubble? Because Heyder Box also wanted to emphasize that this market is overheated. So in 2000, Com...

Before bubbles, he made prophecies, and before the financial crisis, he also made prophecies. He is not negative about AI technology itself, but when it comes to determining whether it is a bubble or not, he can be considered somewhat of an expert. From the perspective of bubbles, it seems that AI is not a bubble yet. There is a common point in bubbles, which is that all bubbles have a phenomenon where confidence spreads widely. If you think something will change the world, not only related stocks but also unrelated ones rise just by being carried away by the enthusiasm. This phase will definitely occur, but when you look at it, there is no such phenomenon yet, so it seems that AI is not a bubble yet. However, the point to note is that during the previous bubble, suddenly, apart from AI stocks, bai stocks also suddenly rose, like AI, and such phenomena occurred, right? So, when he looks at it, there doesn't seem to be a bubble in AI yet. The only thing to be careful of is that during the previous bubble, what is now happening with AI stocks...

The internet was said to change the world like AI would, but it actually did change the world. Since then, many dot-com bubble companies from that time no longer exist. Even Cisco, which can still be seen now, has not been able to recover its peak from the dot-com bubble era. Even Amazon has recorded a 95% decline from its peak. So, even the surviving companies went through a very painful period. Therefore, even if the technology is right, there might be a painful period following whether you are a survivor like Amazon in technology. When investing, you should keep in mind that there may be a painful period. This time, similar to the dot-com bubble, or even more strange, whether the AI bubble will burst or has burst, no one can know, but the bubble continues.

The debate on that law seems to continue, but anyway, it's not like Howard Marks. So far, why? Because it's not like everyone should just do this and that. That's not the case. So, when asked how Howard Marks is investing, he mentioned China. It seems like now is the time to invest in China. For those who are interested in Howard Marks, you may know that he really dislikes macro predictions. Therefore, Howard Marks himself says, I don't invest based on macro analysis, saying that the future of China looks bright and has reached a turning point. Instead, it seems that China is receiving more attention than necessary. Therefore, I now approach it only from a bottom-up perspective. When looking at Chinese bonds from a credit perspective, they seem quite undervalued.

It seems like the right time to invest in China, and I mentioned that I am investing in China. Actually, I invested in Hongda before. Oh, really? What happened with Hongda? When I asked, fortunately, it didn't go bankrupt. Because when I invest in such risky companies, I always receive collateral, so I didn't go bankrupt there. So, although there are opportunities in China, those who want to invest in China as if they have hedged their risks need to consider a little hedging. And isn't it famous now because of the talk about this before? Now, it seems like the time for credit rather than stocks, because now the high-yield index is around 7%, while the average annual return on stocks is about 8% based on the SNP 500 index. So, when you look at it from a hoodoo perspective, bonds should be taken to maturity rather than stocks.

I'm now returning the return. Among high-yield bonds, there are many undervalued ones without default. If you invest in those and hold them until maturity, you can achieve returns at the level of stocks through bond investments. That's why I am currently focusing considerably on credit. Howard Marks was asked how he views the market to some extent on a scale of positivity and negativity. He expressed it as somewhat positive, right? The market is not that bad yet, the U.S. economy is strong, and the market is not overheated yet, so he seems to view it somewhat positively, don't you think? This is a page showing which holdings the masters have based on their views. It shows which stocks the masters are holding and how positively or negatively they view the market.

First, here it is. Here, on the far right, we have, now, oh Grandpa is here, right? And now, at the very end, there are always two people guarding this spot. Who are they? Jeremy Grantham, Grantham, right? Yes, Ray Dalio. There are some familiar faces. But Max even said that he seems a bit positive. Now, as I mentioned earlier, there are seven questions that investors must ask themselves. So, what is the first question? The first question is to set reasonable expectations and goals. Ha-dong Hak-sa said this. Ultimately, investment comes down to one thing. Are you aiming for the average or above average? In other words, will you passively invest in index funds or will you actively invest? In the end, investment is one of the two.

One of them is the average. If you aim for the average now, it's just like something even elementary school students can do. Just go and buy that index ETF. But if you become above average, it means you always have the risk of falling below average. So, you know that famous story, right? Howard Marks, in the title of the first memo he wrote, as far as I know, it was about how to achieve performance. In that title, that's what it talks about. Howard Marks tracked fund managers for about 15 years. Among the returns, if there are fund managers ranked from 1st to 100th, for example, when they are not doing well, they are around 50th place, and when they are doing well, they are around 26th place. So, it's like performing at an average level, a little better than average. You just have to steadily do that for 10 years. Oh, but then after 15 years, then how many places in total? It's the 4th place overall.

It is very difficult to consistently perform above average, so I think this expression is a good one. For example, mothers often hear things like, Don't try to be a perfect mother, just be a reasonably good one. Investors are the same. Instead of trying to be perfect, it's okay to just do a little better than average for a long time to reach the top. Therefore, Hardmax is about whether I can indeed do better than average or if I am willing to take the risk of falling below average. The decision on this is made based on how I view profits and how I view risks, whether I aim for the average or try to aim for above average. This discussion was about how your beliefs about profits and risks influence your decision on whether to aim for average or above average.

There are now six questions that follow for you to check. The second one is about establishing beliefs. You should ask yourself these questions. What do you think about macros? Do you have confidence in macros? Do you believe that you can make a profit by predicting macros? How do you view risks and how will you take risks, whether you will take many or few risks? You need to think about this. Also, what do you think about market timing? Do you believe you can get the market timing right? If you do, what win rate do you think you can achieve? You should ask yourself questions like these. However, the most important one among them is about your thoughts on the Efficient Market Hypothesis, which you should take a look at.

It continues with a question, but in short, it's about how efficiently the market is perceived. To explain briefly, ultimately, isn't it about how quickly information is reflected in prices? Depending on the degree of this reflection, there are weak forms, semi-strong forms, and strong forms. In the case of weak forms, only trading volume or such trading information is reflected. As the market moves towards the strongest form, even private information, insider information, is already reflected in the stock prices. That's how efficient the market is. If one thinks the market is close to the strongest form, then there is no need for active investment. Private information is already fully reflected. However, there is no way to beat the market, absolutely no way to win. So, those who consider the market very efficient should opt for passive investment.

There still seems to be some inefficiency, but many people think that active investment is necessary. Therefore, depending on how efficient and effective one believes the market is, passive and active investments diverge. So, one should ask oneself based on the Efficient Market Hypothesis how they think the market behaves. In other words, if you ask a different question, such as how much you believe the market is efficient, then you keep asking in a different way. If you previously asked, Oh, I can generate alpha because I know the market is efficient, then you should ask here. Oh, in number 3, if you do this, then you don't need to go up to number 4. First, go passive. This is how you should do it. Now, if you come here, this is the next question, right? Oh, can I be active? Let's say you have a certain percentage in the market. Then, what about you? Ask yourself.

There is a ratio, so can you utilize that ratio? Can you create alpha using that? So, can you find inefficiencies and where they are? And not just do this once, but can you do this repeatedly throughout your investment life? Even if your fund size grows as you succeed, can you still do the same thing? And if you can't always make a 100% profit, how will you handle it when you fail? Even if I don't do it directly, if I invest in people who can generate alpha, not indexes but other funds, ultimately, wouldn't I think that fund will outperform the index? So, do the fund managers who operate that fund think of such people and believe they can find them? Well, the market is the market.

That's your thought, so you have this question, and here too, yes, I can become an alpha hunter by using ratios repeatedly. So now, yes, think about this once. For example, I bought a good stock that I didn't know about, and when the news came out and the stock price went up, I sold it. In short, I bought a rumor and sold it in the news. You really want to do that, right? That's right. Since I keep getting fooled all the time, I also want to try that kind of thing. How often can you do that? So, if you flip this around, buying a rumor and selling it in the news means I am smarter than the consensus. In other words, the public doesn't know, but I knew. I was right. So, can you continue to do this repeatedly?

It means that you are smarter than collective intelligence. How do you actually feel about this? When asked how likely it is for you to be consistently smarter than collective intelligence, Dr. Howard Park, who is now recommending, said that he was initially in the stock department. His boss came and asked his department colleagues, What is your target profit rate for this year? They answered, 12%, because the average return on the SNP 500 was about 10% at that time. They thought, Well, I'm an expert and work hard at this. I can outperform by about 2% points. I can do well, so they all answered 12%. But after hearing that, he thought, Yeah, you guys work hard, but the colleagues in the office next door.

Everyone works hard, even those in difficult conditions. It's not just you who works hard. Just because you work hard doesn't mean everything will work out. This leads to thoughts like, How much should we rely on macro predictions? Howard Marks, when he first founded Oaktree Capital, sat down with his co-founders and established six principles, one of which was not to invest based on macro predictions. So, discussing why it's challenging to rely on macro predictions, when we make macro or market predictions, we base them on the past. Even though the future won't be exactly like the past, it will flow somewhat similarly. If today and tomorrow are completely different due to volatility, it affects the economy.

Could there be a market? It can't be maintained if it collapses. So, to some extent, the future flows similarly to the past, making most macro predictions based on the past quite similar. Yesterday and tomorrow will flow similarly. However, many people are making predictions like that, and many of them actually come true. So, can you make excess profits by betting on those predictions? Everyone predicts like that, but it's impossible. Therefore, to make money through macro predictions, predictions based on the past that many people predict must be wrong. A future different from the past must unfold. How often will that happen, and if it does, can you predict it? That's why investing based on macro predictions is.

It can be said to be dangerous. Macro prediction investment, in short, can be summarized as I am right, and you are wrong. Oh, that's how macro prediction-based investment can be made. That's what I said. It seems like the following story. You shouldn't rely too much on macro predictions. That's what it means. And lastly, what do you think about risks? Ah, academically, risk is volatility, right? It's volatility. But Howard Marks personally thinks of risk as a bad outcome. The problem with his own definition of risk is that if you define it as volatility, the up and down price fluctuations can be quantified, right? Um, but the probability of a bad outcome is not quantifiable, right? Like the probability of a pandemic breaking out in 2020, you can't know such things, right? Therefore, the conclusion is now that we don't know.

When it comes to risks, you shouldn't just end it with I don't know. You need to ask what you don't know. So, you need to break down what you don't know. Here, it immediately comes to the point of filtering out investors who predict big success, as I mentioned earlier. In other words, during the 2016 presidential election between Hillary and Trump, Hillary had an 80% chance of winning, as indicated by experts. If Trump had a 20% chance, it was predicted that the market would collapse significantly. However, even though it was thought that Hillary would win, that prediction was wrong, the prediction regarding the event was wrong, and the outcome of the prediction about the event was also wrong. It was predicted that if Trump won, the market would decline, but in reality, it dropped briefly and then rose continuously, didn't it?

At the time of the presidential election in 2016, the stock market graph at that time, isn't it continuously rising? After a brief decline, just like that, now people don't think interest rates will not go down for the next 20 months starting in 2022. Right, at that time, what was it? In 2023, what was it? They predicted that interest rates would be raised six times. According to the Fed Watch, if at that time, no, they won't lower the interest rates. In 2024, they won't lower it six times, but even if it goes down once, if there was someone who predicted that, they would have been very accurate. However, that person couldn't make money. They said interest rates wouldn't go down, stocks wouldn't be good, and they left the market. Then they missed out on the profits in 2023 and 2024. So, the result is, they got some events right, they got Event 2 right, but since events don't connect directly, you have to get both right. You have to predict it right, and the results of that prediction as well.

It's not easy to predict and adjust interest rates. People thought they would go down and made more money by investing in stocks. Because predicting this is not easy, when it comes to the current presidential election, we should be cautious of those who confidently predict who will win and what will rise if someone wins. When we look at it now, if A happens, then B will happen, this is how causality is explained. Many investors misunderstand and have misconceptions. For example, if interest rates go down, Nasdaq will do well. Don't always think like this, it's not always the case. It's not always A or B, it could be C at any time, it could just be A, or who knows. But as you mentioned, because it's causality, it could be wrong, it might not be this way, so predicting is very difficult.

Yes, and secondly, now, the reason why this needs to be filtered, even if it's a false association between money and intelligence. Now, there is a famous economist, Galbraith. Among the things he said, there is a mistaken custom in thinking that just because someone has money, they are considered quite intelligent. There is a misconception that having succeeded in investments is related to intelligence. So, even if I have succeeded in investments, I may not know anything about the election market. And even if I have made money through investments, it could also be luck. Therefore, it is a misconception to think that being successful in investments means being good at predicting elections or such. Don't assume anything. And now, finally, I talked about the results regarding risk and return. This is the graph on the left commonly referred to as the risk-return graph. Yes, but according to Howdong Haksa, Ah, the graph on the left means there is no risk.

The idea is that if the risk is high, the profit automatically increases, so people always think high risk, high return. But in reality, high risk means high loss. So, as the risk increases, the range of profit and loss widens. Therefore, people need to consider how much risk they are willing to take, in other words, how much profit and loss they can bear. Then, based on this risk-return graph on the right side, one can decide how much risk they are willing to take. In short, it means deciding how much risk-taking one can afford in terms of profit and loss recovery. Howard Marks has appeared on our channel after a long time, and he has provided us with very insightful comments. Especially regarding the seven questions, I suggest you reconsider and review them.

I think it has not become a very important criterion, but when you hear such words, in fact, it hurts your pride. It's like saying, Oh, are you saying not to invest? In the end, it means to invest in index ETFs. That's right, that's right. But I wrote in the memo that Hans talked a lot about risks. What is the biggest risk? Ah, the biggest risk is not taking risks. So, if you take a shot, you may succeed or fail, right? But if you don't take a shot, you will definitely not succeed. So, in the end, to make a profit, you have to take risks. Having a nest egg means that you can expect some level of results. If I sacrifice a rook here, I'll probably capture a knight. For example, in terms of investment, if I buy a 10-year government bond, the current interest rate is about 4%, so even if the money is tied up for 10 years, after 10 years,

I might be able to get a 4% return, and to some extent, the expected results are predicted. But now, in order to make excess profits, I have to take risks, and this is an unpredictable risk. Not all efforts in investing are rewarded. No matter how hard I research or invest, the investment can still result in losses. Investing always comes with the risk of failure. Looking at the stocks I've invested in so far, the ones that have done very well are like home runs, in short, very few, and there are many strikeouts. On the other hand, the ones that fail big are relatively few. Even people like Buffett always live with failures. The key is to constantly improve investment skills through feedback, reduce mistakes, and improve skills over time. That's why Buffet can succeed now. Therefore, the important thing when investing is ultimately to bear the risk, but what's important when bearing it is this time.

Even if you fail, it is said that the most important thing in investing is to become a person who improves by giving feedback. When you thoroughly chew on the contents that Howard Marks talked about, the best risk is not doing anything. Not taking risks. The more you chew on this statement, the better it seems. I think Howard Marks' advice would have been very helpful to you during this recent period of market turbulence when you may have had many concerns.

버핏도 맨발로 뛰어오게 만드는 메모왕의 메모장 훔쳐보기 | 뉴로퓨전 에릭

효친님들을 위한 바이사이드 애널리스트 이효석 매니지스트입니다. 
운용 경험을 살려서 변화된 세상에서 생존을 위한 투자전략을 리서치하고 있습니다.
비즈니스/광고/협업 문의 : contact@hs-academy.kr
