Howard Marks: Oaktree Capital, Investment philosophy, Risk and Randomness

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Jun 12, 2024

Howard Marks, co-founder of Oaktree Capital and a renowned investor, shares insights from his impressive career in finance. He discusses the importance of a well-defined investment philosophy and the unpredictability of human behavior. Marks emphasizes the necessity of effective risk management, viewing it as a strategy to engage with uncertainty rather than avoid it. He also dives into contrarian investing, encouraging aspiring investors to challenge market norms and embrace mentorship. Tune in for a treasure trove of investment wisdom!

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ADVICE

Marks' Investment Philosophy

Prioritize risk control and aim for consistent returns, slightly above average.
Specialize deeply in a few less efficient markets and avoid relying on macro forecasts or market timing.

INSIGHT

Limits of Knowledge

Randomness significantly impacts investment outcomes; good decisions can fail, and bad ones can succeed.
Acknowledge the limits of knowledge, especially when dealing with unpredictable human behavior in markets.

INSIGHT

Judging Decisions

Evaluate decisions based on the process, not solely on outcomes, due to randomness.
Short-term success can be due to luck, but long-term success requires skill.

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