Howard Marks Flags Uncertainty in AI Investing

• Marks advocates for less Fed communication, arguing it encourages market 'anti-fragility' and reliance on natural interest rates.
• He observes that markets have been 'ruled by optimists' since late 2022, with prices appearing high relative to intrinsic value.
• Marks expresses concern about the 'unusual degree of uncertainty' in AI investing, particularly regarding its profitability, valuations, and potential impact on jobs and government revenues.
• For value investors, AI companies are challenging due to difficulty in quantifying future earnings and intrinsic value, leading Marks to place them in the 'too hard pile'.
• He notes that while Oaktree uses AI for data analysis, investment decisions remain human-driven, emphasizing that 'exceptionalness is human'.

Howard Marks of Oaktree Capital Management expresses a preference for less activist central banks, believing it fosters market resilience. He notes the current market is driven by optimism, leading to high valuations relative to intrinsic value. While acknowledging the excitement around AI, Marks highlights significant uncertainty regarding its profitability and societal impact, questioning if current exuberance is irrational.