Howard Marks Quotes

Expensive illogicalities and inefficiencies do not worry the monsters of American bureaucracy, and the taxpayers are enthusiastic and eager to spend fortunes in the name of fighting crime. Prison places cost the US taxpayer more than university places. The American belief that prisons are the best way to combat crime has led to an incarceration rate that is at least five times that of almost any industrialised nation. Overcrowding is endemic. Conditions are appalling, varying from windowless, sensory-deprived isolation to barren futile brutality.

This paradox exists because most investors think quality, as opposed to price, is the determinant of whether something's risky. But high quality assets can be risky, and low quality assets can be safe. It's just a matter of the price paid for them...Elevated popular opinion, then, isn't just the source of low return potential, but also of high risk.

O apêndice de Warren Buffett para a quarta edição revisada de O investidor inteligente (livro de Benjamin Graham) descreve um concurso em que cada um dos 225 milhões de americanos começa com 1 dólar e lança uma moeda uma vez por dia. As pessoas que acertam no primeiro dia recolhem um dólar daqueles que erraram; é feito um novo lançamento no segundo dia, e assim por diante. Dez dias depois, 220 mil pessoas acertaram dez vezes seguidas e ganharam 1.000 dólares. “Talvez tentem ser modestas, mas, nas festas, admitirão ocasionalmente, aos membros atraentes do sexo oposto, suas técnicas e os maravilhosos insights que podem oferecer para o estudo do lançamento de moedas.” Depois de mais dez dias, estamos com 215 sobreviventes que acertaram vinte vezes seguidas e ganharam 1 milhão de dólares cada. Essas pessoas escrevem livros intitulados “Como transformei um dólar em um milhão em vinte dias trabalhando trinta segundos por manhã” e passam a ganhar dinheiro com palestras. Soa familiar?

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.

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

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.

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.

the world becomes a better place – an easier place to navigate if we admit that even though there are opinions, they may be wrong.

There aren’t always great things to do, and sometimes we maximize our contribution by being discerning and relatively inactive. Patient opportunism – waiting for bargains – is often your best strategy.

•Scepticism and pessimism aren’t synonymous. Scepticism calls for pessimism when optimism is excessive. But it also calls for optimism when pessimism is excessive.

Forgetfulness is the catalytic germ of spontaneous creativity

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.

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.

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