The legendary Howard Marks, founder of the US$100b Oaktree Capital, was recently interviewed by Barry Ritholtz on his Masters In Business podcast. The 75-minute long interview is wide-ranging, but as usual, his comments around investment strategy stood out.
"There's no such thing as a good idea or a bad idea in the investment world without reference to price - it's not what you buy, it's what you pay. Investing is not a matter of buying good things, it's a matter of buying things well. People who don't know the difference should not be in the business."
"Most of the time, scepticism consists of saying ‘no, no, no. That’s too good to be true. But in the depths of a crisis, scepticism requires you to say ‘no, that’s too bad to be true."
“To be a superior investor, you have to think differently from everybody else. But different is not enough; you have to be different and right.”
“Markets abhor certainty... Investors like certainty, it’s just that it’s usually wrong. And ‘wrongest’ at the extreme.”
“What everybody believes – common sense – is factored into the price of the stock. If you’re gonna find a bargain, you have to find the times when consensus is wrong. You have to diverge from consensus, which can only be uncomfortable.”
Listen to the full interview here, where he explains why education is the most important job of an asset manager, and why he started his memos to investors.