Howard Marks Quotes

o In bubbles, infatuation with market momentum takes over from any notion of value and fair price, and greed (plus the pain of standing by as others make seemingly easy money) neutralises any prudence that might otherwise hold sway.

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.

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.

Forgetfulness is the catalytic germ of spontaneous creativity

It's worth noting that the assumption that something can't happen has the potential to make it happen, since people who believe it can't happen will engage in risky behaviour, and thus alter the environment.

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

In bubbles, infatuation with market momentum takes over from any notion of value and fair price, and greed (plus the pain of standing by as others make seemingly easy money) neutralises any prudence that might otherwise hold sway.

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.

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.

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

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.

A Philippine-brothel-owning member of the House of Lords was staying at the house of a Spanish Chief Inspector of Police. The Lord was being watched by an American CIA operative who was staying at the house of an English convicted sex offender. The CIA operative was sharing accommodation with an IRA terrorist. The IRA terrorist was discussing a Moroccan hashish deal with a Georgian pilot of Colombia's Medellín Cartel. Organising these scenarios was an ex-MI6 agent, currently supervising the sale of thirty tons of Thai weed in Canada and at whose house could be found Pakistan's major supplier of hashish. Attempting to understand the scenarios was a solitary DEA agent. The stage was set for something.

The cautious seldom err or write great poetry.

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.

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