Howard Marks, Co-Chairman, Oaktree Capital.

David A. Grogan | CNBC

Investing heavyweight Howard Marks, who only a few months ago was telling investors to use extreme caution, now thinks the time for playing defense is over.

In the latest chapter of his evolving market views, Marks said a number of conditions have changed recently that argue for more risk-taking as the coronavirus crisis evolves.

“Given these new conditions, I no longer feel defense should be favored,” the Oaktree Capital founder said in the latest of his “memos” that are read widely on Wall Street.

Specifically, he points notes that “the risks in the environment are recognized and largely understood.” Also, he pointed out that potential returns are rising, specifically citing the typical yield for high-yield bonds rising from 3.5% to about 9%. Correspondingly, prices for risk assets have dropped as most investors head to the sidelines, presenting opportunity.

“I feel it’s a time when previously cautious investors can reduce their overemphasis on defense and being to move toward a more neutral position or even toward offense (depending on how sure they want to be of grasping early opportunities),” Marks wrote. “I’m not saying the outlook is positive. I’m saying conditions have changed such that caution is no longer as imperative.”

The advice marks a departure from a cautious stance from Marks, who told CNBC in December that high valuation and increasing risks should push investors to take some risk off the table. However, in recent weeks he has been emphasizing that the panic over the coronavirus was presenting opportunities.

While he’s not calling a market bottom now, he said waiting for sure signs of an end to the selling that took Wall Street into a bear market probably isn’t prudent either. 

“The bottom line for me is I’m not at all troubled saying (a) markets may well be considerably lower sometime in the coming months and (b) we’re buying today when we find good value,” he wrote. “I don’t find these statements inconsistent.”

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