The vibe check got real
Howard Marks, the Oaktree co-founder who’s made a career out of being the adult in the room, says the market has been running on optimism since late 2022. Translation: bad news has been getting a lot easier to ignore, and that usually works... right until it doesn’t.
AI: brilliant, exciting, and annoyingly hard to price
Marks isn’t anti-AI. Far from it. He says the enthusiasm is obvious. The problem is the usual market party trick: everyone’s acting like the winners are obvious, but the math on profitability is still murky, valuations are doing yoga, and the impact on jobs is still a giant question mark.
That makes the whole “is this irrational exuberance?” debate a lot messier than a simple yes/no. If you’re an investor, this is the reminder that the story can be amazing and the entry price can still be ridiculous. Both things can be true. Annoying, but true.
Big picture
Marks’ point is less “sell everything” and more “maybe don’t confuse momentum with certainty.” In AI, that caution matters because the market has already priced in a lot of future magic. Big picture: the next leg of the AI trade may depend less on the hype and more on who can actually turn all that buzz into real cash.