Howard Marks presentation

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Robert T
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Howard Marks presentation

Post by Robert T »

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Interesting presenting by Howard Marks https://www.youtube.com/watch?v=6WroiiaVhGo
  • “Never forget the six-foot tall man who drowned crossing the stream that was five foot deep on average. It’s not sufficient to survive on average, we have to survive on the bad days. We have to survive the low spots in the stream. Your portfolio has to be set up to survive on the bad days so you won’t be shaken out of your investments.”
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Riprap
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Re: Howard Marks presentation

Post by Riprap »

I always enjoy listening to Howard Marks. The memos he posts are well worth reading.

https://www.oaktreecapital.com/insights ... arks-memos

He has also written a book that compiles a lot content from the memos he has written over the years.

http://www.amazon.com/Most-Important-Th ... tant+thing
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Re: Howard Marks presentation

Post by pkcrafter »

Thanks, Robert, the presentation is very good. The comparison to playing tennis not to lose (~24 min mark) is very close to the Bogleheads philosophy. Right near the end of the video there is a question about indexing.

Paul
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Re: Howard Marks presentation

Post by nisiprius »

pkcrafter wrote:Thanks, Robert, the presentation is very good. The comparison to playing tennis not to lose (~24 min mark) is very close to the Bogleheads philosophy. Right near the end of the video there is a question about indexing.

Paul
I don't have time to check the presentation but I have to chime in with the observation that if he is talking about playing tennis not to lose, he should probably be crediting Charles D. Ellis. His influential 1975 essay, "The Loser's Game," drew a very specific parallel to tennis and to a study by Dr. Simon Ramo on the game of tennis. Ramo found that a ordinary levels of skill, tennis is "a loser's game," meaning that games are lost, not won. The winner is the player who is most successful at avoiding mistakes. He gave evidence that investing--as practiced by institutional investors in the seventies--also was a loser's game.

Notice that in this sense, a "loser's game" doesn't mean a rigged game in which everyone loses, it means a game in which the best strategy is to focus on avoiding weakness, to avoid losing through mistakes, rather than trying to win through brilliant play.
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Re: Howard Marks presentation

Post by Reb Tevye »

Marks fully credits and extols both Ramo and Ellis.
I think it's a very sensible balanced and ultimately Boglehead-ish talk, and so I bookmarked the video.
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Re: Howard Marks presentation

Post by pkcrafter »

nisiprius wrote:
pkcrafter wrote:Thanks, Robert, the presentation is very good. The comparison to playing tennis not to lose (~24 min mark) is very close to the Bogleheads philosophy. Right near the end of the video there is a question about indexing.

Paul
I don't have time to check the presentation but I have to chime in with the observation that if he is talking about playing tennis not to lose, he should probably be crediting Charles D. Ellis. His influential 1975 essay, "The Loser's Game," drew a very specific parallel to tennis and to a study by Dr. Simon Ramo on the game of tennis. Ramo found that a ordinary levels of skill, tennis is "a loser's game," meaning that games are lost, not won. The winner is the player who is most successful at avoiding mistakes. He gave evidence that investing--as practiced by institutional investors in the seventies--also was a loser's game.

Notice that in this sense, a "loser's game" doesn't mean a rigged game in which everyone loses, it means a game in which the best strategy is to focus on avoiding weakness, to avoid losing through mistakes, rather than trying to win through brilliant play.
Yes, he does credit Ellis.

Paul
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goingup
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Re: Howard Marks presentation

Post by goingup »

Thanks for this post. I enjoyed his presentation. Just reserved his 2011 book,"The Most Important Thing: Uncommon Sense for the Thoughtful Investor", at our library.
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Re: Howard Marks presentation

Post by GreatOdinsRaven »

Robert T, very good talk. Thanks for sharing it. Do you happen to know when he gave it? I think I recall him mentioning 2012 contemporaneously but that might have been the Rob Arnott video someone also posted recently. Might have mentioned 2014. Not sure. Was listening to it on the go and missed that point.
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Re: Howard Marks presentation

Post by JoeAllen »

GreatOdinsRaven wrote:Do you happen to know when he gave it?
Talk was given March 27, 2015 and published to YouTube on March 29, 2015.
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Re: Howard Marks presentation

Post by GreatOdinsRaven »

JoeAllen wrote:
GreatOdinsRaven wrote:Do you happen to know when he gave it?
Talk was given March 27, 2015 and published to YouTube on March 29, 2015.
Thank you very much. I tried looking before posting but the YouTube app on my phone didn't give that info.
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Re: Howard Marks presentation

Post by livesoft »

At the 15 min mark he says something about expected outcomes that made me think of the DCA vs LS decision.

"You may not do the highest expected value course of action because ...."

And then later with the talk of tennis and avoiding unforced errors ... LS could result in an unforced error while DCA is less likely to do so. DCA is defensive.
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Re: Howard Marks presentation

Post by GreatOdinsRaven »

livesoft wrote:At the 15 min mark he says something about expected outcomes that made me think of the DCA vs LS decision.

"You may not do the highest expected value course of action because ...."

And then later with the talk of tennis and avoiding unforced errors ... LS could result in an unforced error while DCA is less likely to do so. DCA is defensive.
I liked his comment about DCA being defensive. It's potentially avoiding unforced errors.

I think I've let Howard Marks and Rob Arnott get into my head, though. I watched the Rob Arnott lecture video RobertT posted recently viewtopic.php?f=10&t=192728. It was very interesting. Compelling even. Said a lot of the same things Howard Marks says about valuations and reaching for yield, low expected future returns etc. Made me want to change my plan, become a contrarian as Arnott suggested and overweight EM, etc. So I reacted by doing nothing. But that's not saying I feel good about the next few years. His comments about US equity valuations, bond yields and appealing international valuations are stuck in my head. I'd like to think that a tactical AA would work, but golly that's just not who I am. Perhaps to my own detriment.

I keep circling back to Howard Marks and his statement, "Over-priced is not the same thing as going down tomorrow." How true- possibly. Perhaps even probably. I hope. But in my heart I know valuations matter.
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Re: Howard Marks presentation

Post by livesoft »

GreatOdinsRaven wrote:I liked his [livesoft's] comment about DCA being defensive. It's potentially avoiding unforced errors.
For others reading this thread, just to be clear: H. Marks did not mention DCA nor LS in this talk.
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Re: Howard Marks presentation

Post by GreatOdinsRaven »

livesoft wrote:
GreatOdinsRaven wrote:I liked his [livesoft's] comment about DCA being defensive. It's potentially avoiding unforced errors.
For others reading this thread, just to be clear: H. Marks did not mention DCA nor LS in this talk.
I wasn't clear. Thanks for clarifying. Howard Marks does say that "over priced isn't the same thing as going down tomorrow." In my mind I made the jump to its application to DCA and LS investing because that's on my mind these days.
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Re: Howard Marks presentation

Post by tetractys »

Near the end H.M said about general investors behavior resulting from the "race to the bottom" (competitive yields), "they're going for risky investments, and they're doing it mindlessly." Here I think we agree it's not a good idea to chase yield.

Interesting — Tet
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Re: Howard Marks presentation

Post by Toons »

Your portfolio has to be set up to survive on the bad days so you won’t be shaken out of your investments.”

Exactly.
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Re: Howard Marks presentation

Post by GreatOdinsRaven »

tetractys wrote:Near the end H.M said about general investors behavior resulting from the "race to the bottom" (competitive yields), "they're going for risky investments, and they're doing it mindlessly." Here I think we agree it's not a good idea to chase yield.

Interesting — Tet
It's actually that comment that made me ask when the lecture took place. I was wondering if he's been saying it for a while or if it was a recent comment. Not that it's necessarily actionable- just curious.
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Re: Howard Marks presentation

Post by tetractys »

JoeAllen wrote:Talk was given March 27, 2015 and published to YouTube on March 29, 2015.
HM also talked some about indexing or passive investing. Important, and as we here are well aware, he emphasized that indexing removes the tracking risk, but certainly not the asset risk. Bogleheads definitely diversify risk

Good video, Thanks -- Tet
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Re: Howard Marks presentation

Post by matjen »

Wonderful video that covers a fair amount of ground. Thank you for posting Robert T.
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Re: Howard Marks presentation

Post by Sconie »

Excellent! Thank you OP!
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Re: Howard Marks presentation

Post by tetractys »

Now I'm going to read HM's book, and some of the books he mentioned as his biggest influences:

Howard Marks. The Most Important Thing; Uncommon Sense for Thoughtful Investors

Charles D. Ellis. Winning the Loser's Game; Timeless Strategies for Successful Investing

Taleb, Nassim Nicholas. Fooled by Randomness; The Hidden Role of Chance in Life and in the Markets

Wish me good reading, Tet
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