Money and Finance
Link to Memo: On the Couch
- The Tendency To Overlook Negatives...
From Howard Marks in his memo "On the Couch": One of the most notable behavioral traits among investors is their tendency to overlook negatives or understate their significance for a while, and then eventually to capitulate and overreact to them on the...
- Howard Marks Memo: Inspiration From The World Of Sports
Link to Memo: Inspiration from the World of Sports I’m constantly intrigued by the parallels between investing and sports. They’re illuminating as well as fun, and thus they’ve prompted two past memos: “How the Game Should Be Played” (May 1995)...
- Howard Marks' Crystal Ball Proved Accurate
Link to article: Howard Marks' Crystal Ball Proved Accurate Ten years ago, veteran investor and writer Howard Marks sent a contrarian -- and prescient -- memo to clients of his firm, Oaktree Capital Management, assessing the state of the hedge...
- Howard Marks Memo: Dare To Be Great Ii
Link to: Howard Marks Memo: Dare to Be Great IIIn September 2006, I wrote a memo entitled Dare to Be Great, with suggestions on how institutional investors might approach the goal of achieving superior investment results. I’ve had some additional...
- Howard Marks Memo: On Uncertain Ground
The world seems more uncertain today than at any other time in my life. That’s a simple sentence but one with significant implications. And it’s not just me. Here’s what The New York Times said on August 12 in an article about...
Money and Finance
Howard Marks Memo: On the Couch
Link to Memo: On the Couch
I woke up early on Saturday, December 12 – the morning after a day of significant declines in stocks, credit and crude oil – with enough thoughts going through my mind to keep me from going back to sleep. Thus I moved to my desk to start a memo that would pull them together. I knew it might be a long time between inception and eventual issuance, since every time I dealt with one thought, two more popped into my head. In the end, it took a month to get it done.Professor Richard Thaler of the University of Chicago is a leading expert on behavioral economics and decision-making (in fact, he’s such a significant figure in the field that he was given a cameo role in the movie The Big Short). He opens his new book, Misbehaving, with Vilfredo Pareto’s assertion that “the foundation of political economy and, in general, of every social science, is evidently psychology.” I’d apply that equally to the not-so-scientific field of investing.It has been one of my constant refrains – dating back all the way to “Random Thoughts on the Identification of Investment Opportunities” (January 1994) – that in order to be successful, an investor has to understand not just finance, accounting and economics, but also psychology. A thorough understanding of how investors’ minds work is essential if one is to figure out where a market is in its cycle, why, and what to do about it. For me, the markets’ recent behavior – certainly on December 11, but also at other points in 2015 – reinforces that observation.This memo is my attempt to send the markets to the psychiatrist’s couch, and an exploration of what might be learned there.
- The Tendency To Overlook Negatives...
From Howard Marks in his memo "On the Couch": One of the most notable behavioral traits among investors is their tendency to overlook negatives or understate their significance for a while, and then eventually to capitulate and overreact to them on the...
- Howard Marks Memo: Inspiration From The World Of Sports
Link to Memo: Inspiration from the World of Sports I’m constantly intrigued by the parallels between investing and sports. They’re illuminating as well as fun, and thus they’ve prompted two past memos: “How the Game Should Be Played” (May 1995)...
- Howard Marks' Crystal Ball Proved Accurate
Link to article: Howard Marks' Crystal Ball Proved Accurate Ten years ago, veteran investor and writer Howard Marks sent a contrarian -- and prescient -- memo to clients of his firm, Oaktree Capital Management, assessing the state of the hedge...
- Howard Marks Memo: Dare To Be Great Ii
Link to: Howard Marks Memo: Dare to Be Great IIIn September 2006, I wrote a memo entitled Dare to Be Great, with suggestions on how institutional investors might approach the goal of achieving superior investment results. I’ve had some additional...
- Howard Marks Memo: On Uncertain Ground
The world seems more uncertain today than at any other time in my life. That’s a simple sentence but one with significant implications. And it’s not just me. Here’s what The New York Times said on August 12 in an article about...