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In an interview with Yahoo Finance, he acknowledged that the consumer, who represents about 70% of the US economy, continues to be strong. But he cautioned against the weakness of the manufacturing sector even as stock and bond prices are near record highs.
"Usually, when everything goes well and there is a lot of geopolitical uncertainty, it's like an awakening," he said. "It's not red, but it's yellow, and that makes you more conservative when you invest.This makes you think more about the disadvantages.This makes you want to buy things of better quality. because your chance of being accidentally lucky, what happens at the bottom of the cycle, is much lower. "
He added that this is a time when the United States will probably continue to grow at around 2% or even a little less.
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In his new memoir, "What It Takes," Schwarzman presented his three "simple rules" to identify the ups and downs of the market.
First, market ups are "easy to recognize" because overconfident buyers think "this time is different," while this is not usually the case. Second, cheap debt drives acquisitions and investments, and debt levels accelerate. The third is "the number of people you know who are starting to get rich" and the number of "investors" who claim to outperform. "
"Loose credit conditions and a rising tide may allow people with no particular strategy or process to make money" accidentally "," he wrote. "But making money in strong markets can be short-lived, and savvy investors are doing well by combining self-discipline and risk assessment, even when market conditions reverse."
Blackstone Group President and Chief Executive Officer Stephen A. Schwarzman. (AP Photo / Richard Drew)
During his four decades on Wall Street, Schwarzman had seven market failures: 1973, 1975, 1982, 1987, 1990-1992, 2001 and 2008-2010.
He explained that it can be difficult to spot a market trough and that it is generally inadvisable to try to time it.
"Most public and private investors buy too early and underestimate the severity of recessions," he wrote. "It's important not to act too fast."
His best advice is to invest when markets have recovered at least 10% of their lows.
"The value of assets tends to increase as the economies grow.It is best to abandon the 10% to 15% of the market recovery to make sure you are buying at the right time."
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Julia La Roche is a finance reporter at Yahoo Finance. To follow her Twitter."data-reactid =" 53 ">
Julia La Roche is a finance reporter at Yahoo Finance. To follow her Twitter.
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