Howard Marks Has A Perspective That You Cannot Miss | Exploring Markets

Howard Marks Has A Perspective That You Cannot Miss

Here's a tidbit quote from a recent interview Howard Marks did. It is fantastic. Perfect way to see how much the times have changed since the 2008 crisis.

What kind of challenges do investors face in what you are terming as a low-return world? 
Six years ago you could get 6-7% on a T-note. You could get a decent return with total safety. That is impossible today. Today, you have to choose between a decent return and total safety. That is a great problem for investors. If you have to make any modicum of income you have to take some pretty substantial risk. Prior to the 1950s or something like that, stocks yielded more than bonds. Most people don’t know that. The reason was that the stocks were considered risky and so they had to yield more than bonds in order to attract investors to them. Then, starting around 1960, stocks became popularised in the US and they started to yield less than bonds. So in 1999, stock yields were negligible and bond yields were substantial. That has corrected now. A lot of stocks in the S&P 500 now yield more than a lot of bonds.
I guess the question now, that I would ask anyone and all, is when does this mean revert back to the "old ways" of  6-7% on a T-note and 12%-20% on a junk bond. I would imagine 2015.