Howard Marks Letter - Investing without people

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Howard Marks Letter - Investing without people

Post by packer16 » Fri Jun 22, 2018 4:40 pm

Below is a link to an interesting letter by Marks about passive/quant investing: ... ff74a256e4

Buy cheap and something good might happen

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Re: Howard Marks Letter - Investing without people

Post by cinghiale » Sun Jun 24, 2018 1:36 am

Thank you packer16 for posting this.

Marks writes a thoughtful letter, and past threads have highlighted the quality and salience of it. Of particular interest to those who frequent this forum (and who have a significant commitment to passive investing) is Marks’ questioning whether there may be a point where the triumph of passive investing leads to a discontinuation of the very factors (analysis, price discovery, capital allocation) that allow passive approaches to “free ride,” and at that point active management and managers can make a comeback (see page 8 of the essay).

If you give this a read, be sure to keep going to page 14. There, Marks draws some conclusions about each of the three topics covered. (Some readers, thinking Marks has nothing further to say on the matter of passive investing, may stop at page 8.). He is honest enough to recognize that active management has failed to deliver outperformance, and he grudgingly admits that (overly high) fees and expenses weigh heavily in this determination.

Certainly worth reading.
"We don't see things as they are; we see them as we are." Anais Nin | | "Sometimes the first duty of intelligent men is the restatement of the obvious." George Orwell

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