Howard Marks – Misc Quotes

  • To be a disciplined investor, you have to be willing to stand by and watch other people make money that you passed on. You don’t have to invest in everything. You don’t have to catch every trend. You should invest in the things you know about.
  • To be a successful investor, you must have a philosophy and a process that you stick to even when the times get tough. This is very important.
  • Keynes said the markets can remain irrational longer than you can remain solvent. That’s especially true of leveraged investors. That’s the danger of leverage.
  • In investing, to succeed you must survive.
  • Two kinds of forecasters – ones who don’t know, and ones who don’t know they don’t know. You must decide which one you are.
  • The most important choice that any investor can make in the intermediate term is whether to be aggressive or defensive. Not whether it’s stocks or bonds. Not whether it’s a developed market or an emerging market. But whether it’s a good time to be aggressive or defensive. And I believe this distinction can be made on the basis of observations regarding the current situation. They do not require guesswork about the future.
  • The concept of market efficiency – that the price of each asset accurately reflects its underlying intrinsic value, or that the market price is fair – must not be ignored. You can know something and it’s possible to know more than others. But the going in presumption should be that everybody is well-informed, and if you think you know something they don’t, you should be able to express the reason for that. It’s not easy, because everyone is trying just as hard as you are.
  • Sometimes there are plentiful opportunities for unusual returns with low risks, like after the meltdown of Lehman Brothers (2008). And sometimes the opportunities are fewer and risky. It’s important to wait patiently for the former. You should not act the same regardless of the market environment. You should turn aggressive when things are low, and defensive when things are high.
  • When there’s nothing clever to do, it’s a mistake to try to be clever.
  • In investing, the behaviour of participants alters the landscape (George Soros’s concept of ‘reflexivity’). If people find a bargain, they’ll raise the price so that it isn’t a bargain anymore. It’s not good to assume that the market that offered you bargains in the past will also offer you bargains in the future. And the one thing we must not do is extrapolate asset prices.
  • The most corrosive of all the difficult human emotions is the feeling to sit by and watch other people make money. Nobody likes that. You don’t like it at 60, you don’t like it at 80, you don’t like it at 100, but when it hits 150, you say, “Okay, I’ll get on board.” And that’s usually closer to the top than it was to the bottom.


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