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Howard Marks: The Truth about Investing


dcollon
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Credit to Fundoo Professor:

 

There are some great quotes in the attached slide show.  If you would like to listen to Howard Mark’s presentation you can find it here https://www.youtube.com/watch?v=LtogMv--d4g&feature=youtu.be

 

Here are just a few:

 

“Superior results don’t come from buying high quality assets, but from buying assets – regardless of quality – for less than they’re worth. It’s essential to understand the difference between buying good things and buying things well.”

 

“Any time you think you know something others don’t, you should examine the basis for that belief. “Does everyone know that?” “Why should I be privy to exceptional information or insight?” “Am I certain I’m right and everyone else is wrong; mightn’t it be the opposite?” If it’s the result of advice from someone else, you must ask, “Why would anyone give me potentially profitable information?”

 

“To be a successful investor, you have to have a philosophy and process you believe in and can stick to, even under pressure. Since no approach will allow you to profit from all types of opportunities or in all environments, you have to be willing to not participate in everything that goes up, only the things that fit your approach. To be a disciplined investor, you have to be able to stand by and watch as other people make money in things you passed on.”

 

“Investing can’t be reduced to an algorithm or a mechanical process. Few people have demonstrated the ability to excel for long via “quant” investing. Superior results generally require insight, judgment and intuition.”

-“Not everything that can be counted counts, and not everything that counts can be counted.” – Albert Einstein

Howard_Marks_The_Truth_about_Investing.pdf

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I strongly disagree with this statement,

"“Superior results don’t come from buying high quality assets, but from buying assets – regardless of quality – for less than they’re worth. It’s essential to understand the difference between buying good things and buying things well"

 

How has his performance been?

 

 

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I strongly disagree with this statement,

"“Superior results don’t come from buying high quality assets, but from buying assets – regardless of quality – for less than they’re worth. It’s essential to understand the difference between buying good things and buying things well"

 

How has his performance been?

 

scorpioncapital,

 

I would say good, ref. 2016 10-K, p. 15. It's a huge value investing franchise over six asset classes & investment types.

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This is probably not the right place to discuss this, but compared to their funds/strategies, the stock hasn't gained much. 

 

I know they are client focused, but is seems like a big disconnect when your partners (unit holders) aren't seeing the manifestation of the success.  I know the distributions/dividends have been better than average, but ... I don't know.

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I strongly disagree with this statement,

"“Superior results don’t come from buying high quality assets, but from buying assets – regardless of quality – for less than they’re worth. It’s essential to understand the difference between buying good things and buying things well"

 

I admit I hold Howard Marks up on a pedestal.  Buffett has high praise for his memos.  I think his book "The Most Important Thing" is fantastic (it's mostly a compilation of his memos)

 

This quote is just restating the idea of value investing in different terms.  I saw a YouTube video where I remember he said even a completely burned out and ruined car can be a good buy if the price is far lower than its value as scrap metal.  He's restating the Graham/Buffett way of putting it: "Pick up $1 bills for $0.70." 

 

My favorite Marks quotes (not in the video) are:

 

"Experience is what you get when you didn't get what you wanted."

 

"What the wise man does in the beginning, the fool does in the end." (about the end of bull/bear markets)

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That $1 you buy for 70 cents can become worth 70 cents. Or it can remain at $1 or it can grow.

If it goes to 70 cents, you wasted time. If it remains at $1 you get a one time gain - maybe, even this is somewhat questionable because feels like the market doesn't like people that go nowhere. If it grows you have a great deal. High quality assets I feel are the protection you get for that $1 in value. And if it's really high, it will grow. It's like a moving part. In a huge downturn it's interesting to see if a pile of cash in a corp goes down less than a quality company. But since downturns usually recover at some point, the pile of cash is still cash and the active business has the potential to capture some real advantage.

 

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