In a stark warning to investors, billionaire Howard Marks of Oaktree Capital argues that escalating government intervention in the economy is creating a stock picker’s market by deliberately creating winners and losers.
Government Is Choosing Winners And Losers In The Market
In a new memo dated June 18, 2025, Marks contends that when officials override basic economic principles, they are “choosing winners and losers, rather than letting market forces do so”.
This distortion, he suggests, creates distinct opportunities for investors who can identify which companies will benefit and which will be harmed by these policies.
Tariffs Protect Domestic ‘Winners’ And Import-Reliant ‘Losers’
Marks points to protectionist tariffs as a prime example of this dynamic. While intended to support domestic manufacturing, these policies create an artificial advantage for protected industries, which may see their stock prices rise due to reduced competition.
However, this comes at a cost to other market participants. Marks cautions that companies reliant on global supply chains will face higher costs, and ultimately, “consumers pay more than they would if imports were unconstrained”. This creates a clear division between protected domestic “winners” and import-reliant “losers.”
‘Repealing The Laws Of Economics’
At the heart of his memo title, ‘More On Repealing The Laws Of Economics,’ is a firm belief that interfering with fundamental economic laws is a flawed strategy.
Marks argues that while free markets aren’t perfect, they foster innovation and efficiency that optimize overall welfare.
Government attempts to mandate “fairness” or shield constituents from economic reality, whether through rent control or ignoring the national deficit, have historically proven unsuccessful and often worsen the situation.
For Marks, the conclusion is clear: “free-market economies don’t produce perfect solutions, but efforts to significantly control them make things much worse.”
Price Action
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, were higher in premarket on Wednesday. The SPY was up 0.20% at $643.98, while the QQQ advanced 0.25% to $581.44, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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