| 3rd September 2010
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“It’s a truism in capital markets that the best investments are those that have previously done worst, where expectations are low, demand is down, and prospects appear at best highly uncertain.” -Bill Miller, Legg Mason Capital Management
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| 2nd September 2010
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“I will look at any additional evidence to confirm the opinion to which I have already come.” -Lord Molson, British politician (1903-1991)
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| 1st September 2010
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“Their judgment was based more on wishful thinking than on a sound calculation of probabilities; for the usual thing among men is that when they want something they will, without any reflection, leave that to hope, while they will employ the full force of reason in rejecting what they find unpalatable.”
-Thucydides, History of the Peloponnesian War
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| 31st August 2010
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“Management should be incentivized, but constructively. Excessive, short-term focus on stock price performance is not in shareholders’ long-term interest and, in egregious cases like Enron, obviously can bring disastrous results.”-Howard Marks, Oaktree Capital |
| 30th August 2010
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“I believe many investors underestimate the difficulty of investing, the importance of caution and risk aversion, and the need for their active, skeptical involvement in the process."
-Howard Marks, Oaktree Capital
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| 28th August 2010
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“If undeserving (or crooked) companies get capital they shouldn’t, the responsibility ultimately falls to the providers of equity capital.” -Howard Marks, Oaktree Capital |
| 27th August 2010
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“Any investor can chalk up large returns when stocks soar. In a bull market, one must avoid the error of the preening duck that quacks boastfully after a torrential rainstorm, thinking that its paddling skills have caused it to rise in the world. A right-thinking duck would instead compare its position after the downpour to that of the other ducks on the pond.”
- Warren Buffett
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| 26th August 2010
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“Investors should remember that their scorecard is not computed using Olympic-diving methods: Degree-of-difficulty doesn’t count. If you are right about a business whose value is largely dependent on a single key factor that is both easy to understand and enduring, the payoff is the same as if you had correctly analyzed an investment alternative characterized by many constantly shifting and complex variables.”
- Warren Buffett
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| 25th August 2010
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“It’s the surprises that have profound market impact (and thus profound profit potential), but there’s a good reason why they’re called surprises: it’s hard to see them coming!”
- Howard S. Marks, Oaktree Capital
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| 24th August 2010
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“Knowing where you are in a cycle and what that implies for the future is very different from predicting the timing, extent and shape of the next cyclical move.”
- Howard S. Marks, Oaktree Capital
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| 23rd August 2010
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“My main quibbles with forecasters are two:
1. While most forecasts call for a future that’s a lot like the past, the truly valuable forecasts are those that call for radical change. Forecasters rarely make such forecasts, however, and those who do are rarely right.
2. Most forecasters present their work as deserving more credence than it does. In short, they rarely say, “Here’s my forecast, and if I were you, I’d take it with a grain of salt.””
- Howard S. Marks, Oaktree Capital
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| 21st August 2010
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“The process of investing consists entirely of divining the future - in terms of profits and values – and translating that future into prices that should be paid today. Obviously, doing so requires a view of what the world will look like tomorrow and how business and their products will fare in that world.”
- Howard S. Marks, Oaktree Capital
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| 20th August 2010
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“For decades – literally – I’ve been lugging around what I thought was a particularly apt enumeration of the three stages of a bull market:
1- The first, when a few forward-looking people begin to believe things will get better,
2- The second, when most investors realize improvement is actually underway, and
3 The third, when everyone concludes everything will get better forever.”
- Howard S. Marks, Oaktree Capital |
| 19th August 2010
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“The mood swings of the securities markets resemble the movement of a pendulum. Although the midpoint of its arc best describes the position of a pendulum “on average,” it actually spends very little of its time there. Instead, it is almost always swinging toward or away from the extremes of its arc. But whenever the pendulum is near neither extreme, it is inevitable that it will move back toward the midpoint sooner or later. In fact, it is the movement toward an extreme itself that supplies the energy for the swing back.
Investment markets make the same pendulum-like swing:
a. between euphoria and depression,
b. between celebrating positive developments and obsessing over negatives, and thus
c. between overpriced and underpriced.”
- Howard S. Marks, Oaktree Capital |
| 18th August 2010
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“Inefficient markets do not necessarily give their participants generous returns. Rather, it’s my view that they provide the raw material – mispricings – that can allow some people to win and others to lose on the basis of differential skill.”- Howard S. Marks, Oaktree Capital |
| 17th August 2010
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“Although the more efficient markets often misvalue assets, its not easy for anyone person – working with the same information as everyone else and subject to the same psychological influences – to consistently hold views that are different from the consensus and closer to being correct. That’s what makes the mainstream markets awfully hard to beat – even if they aren’t always right.”- Howard S. Marks, Oaktree Capital |
| 16th August 2010
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“Facts are better than dreams.”-Winston S.Churchill, The Gathering Storm, 1948 |
| 14th August 2010
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“Judge of a man by his questions, rather than his answers.”-Voltaire (1694-1778) |
| 13th August 2010
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“If you ask the right questions, you will always find out more than the next guy.”-Michael Price |
| 12th August 2010
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“Entia non sunt multiplicanda praeter necessitatem (entities should not be multiplied beyond necessity)”.
-William of Ockham (c.1285-1347) |
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