AI TRENDS | Howard Marks Says Market Boom Makes It Hard to Judge Irrationality

Legendary investor Howard Marks said in a podcast that markets are currently in a boom, making it difficult to determine whether conditions are irrational. According to Odaily, he cited SpaceX potentially going public at a valuation of nearly $2 trillion, saying investors cannot calculate a reasonable price when participating in such an IPO. Marks said cautious people may struggle to achieve major outcomes, and investing in large technology companies could result in significant mistakes or strong performance. He added that those who stay on the sidelines out of fear of risk may miss what he described as the greatest investment opportunities in history, while investors focused on traditional industries may be unable to capture what he called transformative gains. Marks also referenced valuation levels in U.S. equities, saying the S&P 500 price-to-earnings ratio is about 23, above the 80-year average of 16 and below the 32 seen during the 2000 dot-com bubble. On AI-related investing, Marks said investing in mega-cap technology companies is a lower-risk approach. He said investing in specialized AI companies such as Anthropic and OpenAI carries higher risk but a higher survival rate, while investing in early-stage startups is comparable to buying a lottery ticket.