Archive for October, 2011

Sunday, 16th October 2011

Howard Marks Investing Ideas, part 4

Written by George Traganidas Topics: Stock Investing, Wealth Building

The “know” and “don’t know” schools

The “I know” school people believe they can discern what the future holds, and in their world investing is a simple matter:

  • First you decide what the economy is going to do in the period under consideration.
  • Then you figure out what the impact will be on interest rates.
  • From this you infer how the securities markets will perform.
  • You choose the industries that will do best in that environment.
  • You make judgments about how the industries’ companies will fare in terms of profits.
  • Based on all of this information, you pick stocks that are bound to appreciate.[…]

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Sunday, 16th October 2011

Howard Marks Investing Ideas, part 3

Written by George Traganidas Topics: Stock Investing, Wealth Building

Performance

A bit above average performance is not that bad if you can consistently do it for many years. You do not need to swing for the fences in order to achieve long term gain. If you are willing to take huge bets on assets to gain the spectacular results you should be ready to fail some times and then have huge losses. That will give you an average return over the years, unless of course you can be right about the future most of the times. Not an easy task to accomplish.[…]

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Sunday, 16th October 2011

Howard Marks Investing Ideas, part 2

Written by George Traganidas Topics: Stock Investing, Wealth Building

Telling the future

Making market forecasts on a consistent basis is not an easy thing. Many people try and none succeed on it. If you are always crying ‘wolf’ then at some point you will be right, but that does not tell us about your ability to forecast market movements. A useful market forecast is only useful if it is in contrary to popular belief. If everyone predicts it then this is already reflected in the price of assets. […]

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Sunday, 16th October 2011

Howard Marks Investing Ideas, part 1

Written by George Traganidas Topics: Stock Investing, Wealth Building

When the world’s self-made billionaires speak it is good to listen. Then when you find out who they follow on a regular basis, maybe you should look at them too. This is how I learned about Howard Marks. Howard is the chairman of Oaktree since 1995. His approach to money management is based on a simple motto: “if we avoid the losers, the winners will take care of themselves”. His memos to clients are a must read for investors. Here are some pieces of advice taken directly from his memos.[…]

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