Over my career in the investment advice business, I have met and read from many astute investors. Picking the brains of smart and accomplished investors is one of the best ways to acquire knowledge. Howard Marks is one of those investors. He founded Oaktree Capital in 1995 after a 10-year stint at TCW. He is a regular on Bloomberg, CNBC and is a contributor to many financial publications. He writes a well-circulated piece called Memo’s from Howard Marks. You can subscribe to it for free.
Mr. Marks is one of the investors who I have learned the most from and I haven’t even met the man! His books are that compelling. He just released his most recent book, Mastering the Market Cycle: Putting the Odds in Your Favor on October 2nd. Check it out on Amazon here. While I have not yet read this book I plan to shortly. I have no doubt it will be incredibly compelling and full of knowledge in an easy to understand way.
I still have his book, The Most Important Thing, on my desktop at work. I read it about a decade ago on a family trip to Ocean City, Maryland. (Yes I read an investment book on a family trip) It is highlighted from front to back with quotes that are applicable to almost any investment environment. You can check out that book on Amazon here. Educating investors about market cycles and behavioral finance is one of his goals. Mr. Marks is serious about educating the public.
Mr. Marks was recently on a podcast with Meb Faber of Cambria Investment Management as he was doing his book tour. On that podcast he made four statements that stood out that I think are applicable especially today.
1) “It’s not what you buy, it’s what you pay for it that determines whether something is a good investment.”
2) “Good investing is not a function of buying good things, it is a function of buying good things WELL.”
3) “If you don’t know the difference between buying a good asset and making a good investment, then you are not going to be a successful investor.”
4) “There is no asset that is so good that it can’t become overpriced and thus a bad investment.”