Howard Marks Quotes

The most dangerous thing is to buy something at the peak of its popularity. At that point, all favourable facts and opinions are already factored into its price and no new buyers are left to emerge

If everyone likes it, it's probably because it has been doing well. Most people seem to think that outstanding performance to dates presages outstanding future performance. Actually, it's more likely that outstanding future performance to date has borrowed from the future and thus presages subpar performance from her on out.

A high-quality asset can constitute a good or bad buy, and a low-quality asset can constitute a good or bad buy. The tendency to mistake objective merit for investment opportunity, and the failure to distinguish between good assets and good buys, get most investors in trouble.

Risk arises as investor behaviour alters the market. Investors bid up assets, accelerating into the present appreciation that otherwise would have occurred in the future, and thus lowering prospective returns. The ultimate irony lies in the fact that the reward for taking incremental risk shrinks as more people move to take it.

Most people strive to adjust their portfolios based on what they think lies ahead. At the same time, however, most people would admit forward visibility just isn't that great. That's why I make the case for responding to the current realities and their implications, as opposed to expecting the future to be made clear.

If one is approached with a deal predicated on cycles having ceased to occur, remember that invariably that’s a losing bet.

Can you send stuff out from Nepal by air, John?’
‘Ooh! No. No. I can’t do anything like that. No. No. No. Now, I know a man. He knows a man who might know.’
‘How much would it cost?’
‘Well, money is the thing, and they always do things for a fair and honest price, I promise you.’
‘What’s a fair price, John?’
‘You will tell me, I’m quite sure.’
‘What will you want out of it, John?’
‘If I help you do business, I’m sure you will give me a drink.’
‘A drink?’
‘Yes. If a man does something for you, you give him a drink. Please, if everything goes well, give me a drink.’
‘Can you check that the quality will be all right?’
‘I only smoke Tom Thumb, but I know a man who has a knife.’
I took this as a yes.
‘Can you make it smell-proof?’
‘Not if God made it smell.’
‘Do you know a man who can?’
‘No. But if you do, let him come and do it, or give me instructions.’
‘How much can they send?’
‘I should think it depends on when you want to do it by.’
‘Well, John, the Americans will want to do a ton as soon as possible.’
‘Now I was in America once, and the thing is that Americans will always want more, and there is no end to their madness. Lovely people, for sure, but you have to keep them in line. When my visa ran out, the Immigration asked me why I wanted to extend it, and I said it was because I hadn’t run out of money. He stamped it and said, “Have a nice day.” So, if the Americans ask for a ton tomorrow, say you will do half a ton when Wales win the Triple Crown. That will deal with their madness, and everyone can get on with their lives. It saves all that tidding.’
‘Tidding?’
‘Talking Imaginary Deals.’
Accurately conveying the contents of my conversation with Old John to Ernie wasn’t easy. I told Ernie hashish could be exported from Nepal for about the same price as Robert Crimball charged in Bangkok, but 500 kilos was the most they could do at one time, and someone would have to be sent out to ensure the consignment was smell-proof. Ernie sent his right-hand man, Tom Sunde, wit

There's only one way to describe most investors: trend followers.

No asset class or investment has the birthright of a high return. An asset is only attractive if it’s priced right.

The correctness of a decision can’t be judged from the outcome. Nevertheless, that's how people assess it. A good decision is one that’s optimal at the time it’s made, when the future is by definition unknown. Thus, correct decisions are often unsuccessful, and vice versa.

Most people view risk taking primarily as a way to make money. Bearing higher risk generally produces higher returns...But it can’t always work that way, or else risky investments wouldn't be risky. And when risk bearing doesn't work, it really doesn't work, and people are reminded what risk's all about.

Market optimism that this time is different is misguided and dangerous.

Investment success doesn’t come from "buying good things", but rather from "buying things well".

If you've settled on the value approach to investing and come up with an intrinsic value for a security or asset, the next important thing is to hold it firmly. That's because in the world of investing, being correct about something isn't at all synonymous with being proved correct right away.

Forgetfulness is the catalytic germ of spontaneous creativity