TOPIC • 4 CLAIMS
Valuation
What is being paid for a stream of cash, and against what history.
HOWARD MARKS/
Those software borrowers were financed at multiples and leverage that assumed durable growth.
- often acquired at EBITDA multiples of about 20x, with high leverage
HOWARD MARKS/
Private equity returns have already lagged the public index over the recent period, undercutting the premium the asset class is sold on.
- MSCI: US private equity funds annualized 5.8% between 2022 and Q3 2025, versus 11.6% for the S&P 500
HOWARD MARKS/
On the central valuation question he argues the historical comparison cuts the other way — today’s leaders trade cheaper than the 1999 leaders did.
- P/E ratios for Microsoft, Cisco and Oracle in 1998-2000 were much higher than current ratios for Nvidia, Microsoft, Alphabet, Amazon and Meta
HOWARD MARKS/
He cites private-market pricing as the clearer symptom of excess.
- Thinking Machines raised $2 billion at a $10 billion valuation with no released product, later valued at $50 billion
Claims are restated; figures are the authors' own. Each links to the document it came from, which in turn links to the original in full.