September Update

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More investing legends are starting to sound the alarm regarding current market valuations. Jim Rogers said the following earlier this year “…get prepared because we’re going to have the worst economic problems we’ve had in your lifetime or my lifetime….”

Earlier this summer, famed bond investor Jeffrey Gundlach, CEO and CIO of DoubleLine, said the following.”If you’re a trader or a speculator I think you should be raising cash today, literally today. If you’re an investor you can easily sit through a seasonally weak period,”

More recently, Howard Marks, co-chairman of one of our holdings, Oaktree Capital Group (NYSE:OAK) is also sounding the sirens. In his latest memo (which is a great read), he had the following to say “It’s essential to take note when sentiment (and thus market behavior) crosses into too-bullish territory, even though we know rising trends may well roll on for some time, and thus that such warnings are often premature,”

He further stated – “I think it’s better to turn cautious too soon (and thus perhaps underperform for a while) rather than too late, after the downslide has begun, making it hard to trim risk, achieve exits and cut losses.” I couldn’t agree more.
Even Warren Buffett has chimed in on the likelihood of a forthcoming correction. In his letter to shareholders he stated, “Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold,” he wrote. “When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do.” To this end, Berkshire Hathaway is holding just shy of $100 billion in cash, waiting for better buying opportunities

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