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Howard Marks on the futility of forecasting

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Howard Marks from Oaktree Capital uses the recent falls in the oil price to illustrate the futility of short term forecasting and need for a long-term approach. When pressed on whether he is interested in investing energy stocks (which he is) Marks says, in doing so you need to take a view on the direction of the oil price not a specific price. While getting it right in the short term is near impossible he says there are ways to reduce your exposure to short term gyrations. “One of the most important things about investing is timeframe. Nobody can get it right in the short term and you shouldn’t have to get it right in the short term. Short term profits are unimportant, the question is ‘am I going to be richer in 10 years?" In this short video Marks illustrates the futility of forecasting with a $100 bet he runs with investors about the future price of oil. (VIEW LINK)


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