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Howard Marks: It's Not Easy


smd123
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The wiki article he talks about.  https://en.wikipedia.org/wiki/Keynesian_beauty_contest

 

 

To think that Marks takes the time to write a memo about "second level thinking" at 70 is astounding. Even he has to think about it now. Buffet, munger...they continue to think the same now too.

 

How many times have you read these guys and they drill the same sayings over and over again....even at 70?!.....makes me feel kinda bittersweet

 

I wonder what these guys were like in their 20s and 30s, 40.....

 

 

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The wiki article he talks about.  https://en.wikipedia.org/wiki/Keynesian_beauty_contest

 

 

To think that Marks takes the time to write a memo about "second level thinking" at 70 is astounding. Even he has to think about it now. Buffet, munger...they continue to think the same now too.

 

How many times have you read these guys and they drill the same sayings over and over again....even at 70?!.....makes me feel kinda bittersweet

 

I wonder what these guys were like in their 20s and 30s, 40.....

 

Marks talks a bit about his earlier years in his podcast with Ritholtz. Of course that's as he remembers it now, but I think there were some good lessons either way.

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I've read it twice now.  I'd advise all to re-read it also, if only to see if I'm mistaken with the following:

 

Did Marks read the recent CoBF thread "Excellent Interview. 5 Minute Read" and decide to write 14 pages of insightful comments without once using the term "variant perception"? 

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The only part of this memo that bothered me slightly is Marks' seeming inability to reconcile the first page of his memo w/ the rest of his memo on second-level thinking.

 

He spends the first page talking about how markets will whittle away opportunities through pricing transparency without discussing the possibility of overshooting and undershooting, which, by its nature, will increase opportunities. The increased of availability of pricing to the masses actually reinforces the non-rational actions of investors and creates more opportunities not less. (Although, it's possible that it compresses opportunities within certain timeframes by increasing the number of companies on which there are overreactions rather than the prior era of having opportunities more spread out over time.)

 

In any case, still a good memo.

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