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TIP378: Move Forward with Caution w/ Howard Marks

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Sep 12, 2021

Guest

Howard Marks

In this engaging discussion, billionaire investor Howard Marks shares his insights on navigating the complex world of investing. He emphasizes the minimal focus investors should place on macro factors and the balance needed to manage risk without attempting to time the market. Marks delves into contemporary topics like Bitcoin, bonds, and interest rates, while sharing timeless wisdom about the distinction between price and value. He even reveals the ideal portfolio he wishes to pass on to his grandchildren, offering a glimpse into his long-term investment philosophy.

55:40

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Episode notes

insights

INSIGHT

Acknowledge Uncertainty

Having an opinion is different from believing you're right, especially in investing.
Acknowledge uncertainty and avoid excessive confidence in predicting the future.

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ANECDOTE

COVID-19: An Atypical Cycle

The COVID-19 market crash and recovery weren't typical cyclical events.
They resulted from external shocks (a pandemic and massive intervention), not internal market dynamics.

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ADVICE

Avoid Market Timing

Don't try to time the market by missing the worst days.
Missing the best days, often following corrections, severely impacts long-term returns.

Get the Snipd Podcast app to discover more snips from this episode

Navigating Market Cycles Post-Pandemic

04:12 • 13min

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Sponsorship Insights and Portfolio Strategies

17:20 • 5min

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Navigating Investments in a Low-Yield World

22:23 • 16min

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Understanding the Intricacies of Price and Value in Investing

38:17 • 4min

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Navigating Demographic Luck and Market Realities

42:05 • 15min

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Protecting Investments for Long-Term Success

First published in 1934, Security Analysis is a seminal work in the field of finance that lays the intellectual foundation for value investing. The book, written by Benjamin Graham and David L. Dodd, distinguishes between investing and speculating, emphasizes the importance of thorough financial analysis, and introduces key concepts such as the 'margin of safety. ' The sixth edition includes commentary from leading Wall Street money managers and a foreword by Warren E. Buffett, who has praised the book for its enduring relevance in modern markets.

MONEY Master the Game

7 Simple Steps to Financial Freedom

Tony Robbins

In 'MONEY Master the Game: 7 Simple Steps to Financial Freedom,' Tony Robbins provides a comprehensive blueprint for securing financial freedom. The book is based on extensive research and interviews with legendary investors such as Warren Buffett, Ray Dalio, Carl Icahn, and John Bogle. It outlines seven steps: making the most important financial decision of your life, becoming an insider by knowing the financial rules, making the game winnable, making the most important investment decision, creating a lifetime income plan, investing like the top 0. 1%, and taking action. The book emphasizes the importance of education, diversification, and developing the right financial strategies to achieve long-term financial security and freedom.

Mastering the market cycle

Getting the Odds on Your Side

Howard Marks

In 'Mastering the Market Cycle: Getting the Odds on Your Side,' Howard Marks provides a comprehensive overview of market cycles, emphasizing the importance of understanding the patterns of ups and downs influenced by economics, markets, companies, and human psychology. Marks draws on his decades of experience to explain how investors can position their portfolios to take advantage of market cycles by studying past cycles, understanding their origins, and remaining alert for the next cycle. The book highlights that market cycles are driven by cause-and-effect relationships and that investors should prepare rather than predict market outcomes. It also delves into the psychological markers and emotional factors that influence investor behavior during different phases of the cycle.

Outliers

The Story of Success

Malcolm Gladwell

In 'Outliers: The Story of Success', Malcolm Gladwell examines the often-overlooked factors that contribute to high levels of success. He argues that success is not solely the result of individual talent or hard work, but rather is influenced by a complex web of advantages and inheritances, including cultural background, family, generation, and luck. The book delves into various examples, such as the success of Bill Gates, the Beatles, and Canadian ice hockey players, to illustrate how these factors play a crucial role. Gladwell also discusses the '10,000-hour rule' and the impact of cultural legacies on behavior and success. The book is divided into two parts: 'Opportunity' and 'Legacy', each exploring different aspects of how success is achieved and maintained.

The most important thing

Jean Ure

While specific details about the plot are not readily available, Jean Ure's books generally delve into the lives of young characters navigating various challenges and learning valuable life lessons. This book is likely to follow a similar pattern, focusing on the emotional and social development of its characters.

In today’s episode, we have an extremely special guest who is a billionaire and investing legend, Howard Marks. Howard really needs no introduction, but if you have not read Howard's memos, you are missing a critical piece of your investing education. Howard has also written some of Trey's favorite books including The Most Important Thing and Mastering the Market Cycles, which they discuss in depth in this episode and much more.

IN THIS EPISODE, YOU'LL LEARN

(01:54) How much investors should really focus on macro (spoiler: very little).
(11:53) How to balance risk without the temptation to time the market.
(22:32) Howard's thoughts on bitcoin, bonds, and interest rates.
(34:58) Evergreen wisdom around price and value.
(47:19) And be sure to stick around for the last question where Howard provides a portfolio he would leave to his grandchildren.

*Disclaimer: Slight timestamp discrepancies 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.
Howard Marks’ Memos.
Trey Lockerbie Twitter.

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