The Ledger, every show

“The bull market is 11 years old. If there's not one in the next five years, that means we'll have gone 16, which would be a record by a wide margin. So my guess is that in the next five years, we'll have a period of distress, and my hope is that Oak Tree will …”

“You know, for them, the SaaS business is probably the only way a software model is going to work, but it's going to transform itself into the ICO model, which is the blockchain, because it's the logical progression, you know, internet, one point O internet, tw…”

“Who is the person in the investment business today who will find the most success in the next 10 years? The answer is, in my opinion, the person who best understands AI and its capabilities and implications.”

“I wrote a memo in December, 22, called The Sea Change, and it talked about the change in the interest rate climate, which I think is structural and long-lasting.”

“This time around, we are not coming off a bubble. The banks are much less leveraged. And there's no analog as deficient in substance as the subprime mortgage.”

“And thanks to the Trump tax bill that was signed in December of 17, we were already running a trillion dollar deficit in times of prosperity.”

“So the point is we're going to be going through the next years saddled with an enormous national debt that we'll never repay.”

“My partner, Bruce Garsh, and I, talking, I would say, middle of last week, were afraid of a meaningful probability of a depression, with millions losing their jobs and businesses shuttered for long periods of time. Now, I think, with the government having done…”

“The U.S. Has a better underlying rate of growth and more economic vitality. On the other hand, I think that the U.S. Lacks the national leadership, which might be required to get us through this. My guess is that the, well, in this little instance here, I'm go…”

“I do think that we are in the upper advancing part of the cycle. You know, we've been in, it's been a long economic expansion, a long bull market, in both cases, the longest in history. Valuations of stocks are higher than usual. Interest rates and yield sprea…”

“That's when you get the best bargains, and that is not a very good description of today. Today, people are eager to invest. Fear of missing out seems to have taken over from fear of losing money. People are risk tolerant. They're greedy. They're optimistic. Th…”

“So my guess is that this recovery will set a record for the longest recovery in history. Because of the slowness and the absence of excesses.”

“Chinese don't pay tariffs. Tariffs are paid by consumers of goods. We have collected billions in tariffs from US consumers of Chinese goods.”

“The point is that we have probably lost twenty-four million jobs to increasing productivity over the last 40 years compared to three million that went to China. And it shows you the scope of the problem and the location of the problem. The problem is not China…”

“The people who can develop the personless bookstore or the robot will be in great demand, and the people who can create artificial intelligence will be in great demand and very valuable, and they'll all live in a small community just south of San Francisco. An…”

“The return on the S&P, which averages 10, is almost never between eight and 12.”

“I've been in high yield bonds for 48 years. And in our experience, 99% of the bonds have paid interest in principle as promised.”

“Over the last 40 years, on average, something like 3.6 or 3.7% of all high yield bonds have gone into default every year. And our default rate has been Roughly a third.”

“And by the way, the private equity funds, I think they're sitting on about three trillion dollars worth of companies that they have to sell. To pay off the investors.”

“I personally believe that when we get to herd immunity, And when the number of cases falls, you know, radically, by which I mean, I guess, you know, a few hundred a day or so, I think that we'll have a very good recovery in the economy and in employment.”

“We think our returns will be very attractive relative to the low overall level of interest rates, but nothing like in the past.”

“And I think that the market conditions in 19, twenty-nineteen and the prior years made us vulnerable to an economic shock like the pandemic produced.”

“And if you bought those stocks, the day I got to work in September of 69, if you held them tenaciously for five years, you lost about 95% of your money. 95%. Because for many of them, something did go wrong, and for all of them, the price was too high. The P.E…”

“He's managed about 70 odd billion dollars since 1988 in that field, by far the biggest. And of his total profits and losses, well over 90% are profits, less than 10% are losses.”

“If you held the stocks for five years from the day I got there, you lost about 95% of your money in great companies.”

“The money gushed into private equity, and they got up to two and a half trillion or so of what we call dry powder, money waiting to get invested, and I think most of that is still dry, if I'm not mistaken.”

“If you bought the nifty 50 the day I got to work, and if you held it tenaciously for five years, you lost almost all your money in the best companies in America for the main reason that they had been priced too high.”

“In 1990, I went to visit a client in the Midwest who told me that the pension fund he ran for 14 years was between the 27th percentile and the 47th percentile every year for 14 years... That pension fund was in the fourth percentile of all pension funds for th…”

“Until we get, you know, growth above two and a half or three, and until, certainly until we get inflation above two percent, I don't think you'll be seeing any increases in Fed funds rate coming from the central bank.”

“But our government's been running deficits since the global financial crisis, And this was the slowest recovery in post-war history, and it didn't kindle any inflation.”

“And, you know, as of January, the unemployment rate in this country was three and a half percent, the lowest in 50 years, and still no inflation.”

“Well, I think, number one, that economic growth slows down.”

“There are other things that the Fed and the government can do, and they'll do them all to try to bring the economy back.”

“In the US, we have had that effect. As before today, I don't know where the market closed today, but it was up substantially, like, eight or so percent when I last looked. Before today, I think the market was down about 35%, so I wouldn't agree with your premi…”

“And, you know, we have a record in distressed debt of, I think, 16 or 17% a year for 30 years without using any leverage.”

“I offered a 100,000 dollars to buy the whole company and people were laughing at me. The trustee laughed at me, everybody. It turns out.”

“They couldn't file their public statements or publicly traded company. They, their auditor fired them and they couldn't file anymore.”

“In the nineties, it returned 20% a year, and in the aughts, it returned zero per year.”

“The banks were chastened, lost some of their capital, were more tightly regulated, We're discouraged from risk taking, and that led in 2011 or 12 to the creation of the private credit market, which is now over a trillion and a half. In oh seven, I think it was…”

“That's right, David. Previously, that was held by a, when I wrote, I think it was in January of 14 or 15, called Luck, in which I talked about how lucky I've been and that I'm a big believer in luck and it's great to be on the right side of it. And I listed ab…”

“So when you look and you see that the average P.E. Ratio in the post-war period has been 16, and today we're in the 26 or seven region.”

“Kodak and Polaroid lost their market. IBM and Xerox got killed by competitors. AIG went bankrupt in the global financial crisis.”

“Well, the problem is that in this instance, the interest rates at the beginning of the problem were one and a half percent. So clearly if it's one and a half, you can't cut by five.”

“They had about 60, they had about forty million In revenue with sixty million of losses. It's called negative, negative revenue, which means the cost of making those cartridges at that time cost them more than what they sold it for.”

“And it cost 50 cents to make the CD, where the cartridge cost 20, 30 dollars.”

“Well, I met Steve Jobs when I was 20 years old at Apple, because he wanted to buy my company.”

“In 1976, I think it was impossible for a company without an investment grade rating to issue a bond. And in 77, 78 is when it became possible.”

“Japan and Europe, for example, have been trying to accomplish two percent inflation for years, and they can't make it happen.”