Investors shouldn’t bet the house on macro forecasts

 Investors shouldn’t bet the house on macro forecasts

Markets updates

The writer is co-founder and co-chairman of Oaktree Capital Management

As an investor who has seen more than a few market cycles, I have learnt to approach macro forecasts with scepticism. Such predictions normally turn out to be either unhelpful consensus expectations or non-consensus forecasts that are rarely right. But as I explain in my latest memo to investors, they should not be dismissed entirely, particularly now.

Why? To invert what Warren Buffett once told me, the macro future may not be knowable, but it certainly is important. Since the tech bubble burst in 2000, the market has appeared to think less about events surrounding individual companies and stocks and more about the economy, monetary and fiscal policy, and world events. That has been even more true since the financial crisis in 2008.

Macro considerations are…

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