The Art of Risk Management in Investing

This chapter explores the complexities of risk management in investment strategies, with a focus on qualitative assessment and position sizing. It critiques common pitfalls in decision-making, emphasizing the importance of a long-term investment philosophy over short-term performance metrics. Additionally, the speakers highlight cognitive biases and advocate for clear communication of risk through visualization, while encouraging humility and continuous learning in the investment journey.

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Trey Lockerbie invites the renowned Howard Marks, known for establishing Oaktree Capital with $140B in AUM and earning a reputation as an investing legend for his consistent performance, unconventional investments, and insightful memos. In their discussion, Howard shares his views on various topics, including A.I., Bitcoin, and his prediction that the financial markets are undergoing a significant transformation, which he believes is the third such occurrence in his illustrious 50-year career.

Howard is the author of several books on investing, including "The Most Important Thing" and "Mastering the Market Cycles," which have been widely praised for their insights into the investment process.

IN THIS EPISODE YOU’LL LEARN:

0:00 - Intro.

01:53 - His prediction that the financial markets are entering a Sea Change, the third such event he has seen in his over 50 year career.

02:16 - Why this Sea Change differs from normal market cyclicality.

18:58 - How a more moderate interest rate environment affects global debt and his risk assessments.

36:28 - How studies of Japan influenced his investing philosophies.

48:21 - His thoughts on A.I., Bitcoin, Japan & China.

56:14 - Also included are some of Howard’s personal insights.

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members.
Related episode: Listen to TIP378: Move Forward With Caution w/ Howard Marks or watch the video here.
Related episode: Listen to TIP497: Lessons From Billionaire Howard Marks or watch the video here.
Related episode: Listen to TIP073: Billionaire Howard Marks – The Most Important Thing or watch the video here.
Visit: Oaktree Capital Management.
Howard Marks Memos.
Check out: Mastering the Market Cycle by Howard Marks.
Check out: The Most Important Thing by Howard Marks.
Check out: Mistakes Were Made (But Not by Me): Third Edition: Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts by Carol Tavris.
Trey Lockerbie's Twitter.

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