The Decision Education Podcast Episode 039: Bulls, Bears, and Biases with Howard Marks
72 snips
Oct 22, 2025 
Howard Marks, co-founder of Oaktree Capital Management, is a legendary investor known for his deep insights into market psychology. He delves into how stock prices often reflect investor sentiment rather than true value changes. Marks discusses the biases that affect behavior in both calm and volatile markets and explains why optimism and FOMO can drive market bubbles. He emphasizes the importance of setting realistic investing goals and understanding base rates, advocating for a long-term focus and patience to navigate market uncertainties.
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Volatility Reflects Psychology
- Stock price volatility mainly reflects changing investor psychology, not daily changes in intrinsic company value.
- Prices surge when optimism increases and investors place higher value on future possibilities.
Markets Exaggerate Real-World Changes
- Investors tend to overreact, turning modest real-world fluctuations into extreme market moves.
- That flightiness, not fundamentals, explains huge stock swings up and down.
Require A Risk Premium For Uncertainty
- Recognize investing requires optimism and demand a risk premium when uncertainty exists.
- Avoid paying excessive prices driven by exuberance because that overvalues future expectations.
