Howard Marks says gold can't be fairly priced, questions store-of-wealth claim

According to Businessinsider, in a fireside chat at Pepperdine University, Oaktree Capital cofounder Howard Marks questioned gold's reputation as a store of wealth and said there is no way to tell if the metal is being priced fairly. Marks contrasted gold with assets such as stocks, bonds, and real estate, which generate cash flow and can be valued based on expected returns, and said bullion and other alternative assets have no cash flow so "there's 'no discussion' about how to price it." He pointed to Brent crude peaking around $147 a barrel in 2008 and plunging to around $40 a barrel as the Great Financial Crisis unfolded to illustrate how prices can swing despite persistent underlying factors.

He added, "You can't say what the right price for a barrel of oil is, or a bar of gold. How do you turn all those qualitative elements into a fair price? And the answer is: there is no way.

Key Topics

Business, Howard Marks, Oaktree Capital, Gold, Brent Crude, Pepperdine University