Garpal Gumnut
Ross Island Hotel
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- 2 January 2006
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“As such, it seems to me that the potential for further gains from things turning out better than expected, or valuations continuing to expand doesn’t fully compensate for the risk of decline from events disappointing or multiples contracting,” Marks says.
“In other words, the fundamental outlook may be positive on balance, but with listed security prices where they are, the odds aren’t in investors’ favour.”
Of course that should be Oaktree not Oakridge.Howard Marks is a very well respected investor, adviser and fund manager. He is associated with Oakridge which he founded.
His advice in the latest memo is not good for those piling in to the market at present. It applies as much to Australia as to the US markets.
He makes sense. Many of his thoughts and conclusions have been discussed on ASF since March 2020. It's good to have it all in one document.
https://www.oaktreecapital.com/insights/howard-marks-memos/
gg
Howard Marks is a very well respected investor, adviser and fund manager. He is associated with Oakridge which he founded.
His advice in the latest memo is not good for those piling in to the market at present. It applies as much to Australia as to the US markets.
He makes sense.
I saw that.- and now, suiting the times, he is saying macro events, short-term performance and even volatility shouldn’t matter to most investors, but focus on fundamentals such as earnings potential, and buy stocks and bonds that look cheap relative to this.
Howard Marks’ 10 elements for investors
- Forget the short run – only the long run matters.
- Decide whether you believe in market efficiency. If so, is your market sufficiently inefficient to permit outperformance, and are you up to the task of exploiting it?
- Does your investment style match your personality? Do you tend more towards aggressiveness or defensiveness? Will you try to find more and bigger winners, or focus on avoiding losers, or both? (Hint: “both” is much harder to achieve than one or the other.)
- Think of your normal balance between aggressiveness and defensiveness based on your financial position, needs, aspirations, and ability to live with fluctuations. Will you vary this balance depending on what happens in the market?
- Adopt a healthy attitude towards return and risk. Understand that higher returns are usually accompanied by increased risk, while avoiding risk usually leads to avoiding return as well.
- Insist on an adequate margin of safety, or the ability to weather periods when things go less well than you expected.
- Stop trying to predict the macro; study the micro like mad in order to know your subject better than others. Understand that you can expect to succeed only if you have a knowledge advantage, and be realistic about whether you have it or not.
- Recognise that psychology swings much more than fundamentals, and usually in the wrong direction or at the wrong time. Understand the importance of resisting those swings and profiting if you can by being counter-cyclical and contrarian.
- Study conditions in the investment environment – especially investor behaviour – and consider where things stand in terms of the cycle. Where the market stands in its cycle will strongly influence whether the odds are in your favour or against you.
- Buy debt when you like the yield, not for trading purposes. In other words, buy 9 per cent bonds if you think the yield compensates you for the risk, and you’ll be happy with 9 per cent. Don’t buy 9 per cent bonds expecting to make 11 per cent thanks to price appreciation resulting from declining interest rates.
WHOOPS !!!Howard Marks is a very well respected investor, adviser and fund manager. He is associated with Oakridge which he founded.
His advice in the latest memo is not good for those piling in to the market at present. It applies as much to Australia as to the US markets.
He makes sense. Many of his thoughts and conclusions have been discussed on ASF since March 2020. It's good to have it all in one document.
https://www.oaktreecapital.com/insights/howard-marks-memos/
gg
to that i would reply , today i bought my first ( small ) parcel of BEAR this cycle ( am NOT considering BBUS .. yet )Marks says overvaluation is impossible to prove and there’s nothing to suggest a correction is imminent.
Don't you think likely pending interest rate cuts in US and also Aus are bullish for the markets? More easily accessible credit for investors and also the businesses they invest in. More atrocious interest offerings for the debt free with cash in the bank leading them to increase risk by deploying more funds in the markets. I appreciate the foil to all that is that presumably the expected interest rate cuts are already more or less baked into stock market prices.i would veer towards more 'defensive stocks ' but i consider ( most of ) them over-valued as well OR have unacceptable levels of debt
so far all i can find worthy ( of buying ) are a few unloved value stocks having a rough time
bullish yes , IF you discount the extra risk you are taking on , ( TINA has been the word for a few years now )Don't you think likely pending interest rate cuts in US and also Aus are bullish for the markets? More easily accessible credit for investors and also the businesses they invest in. More atrocious interest offerings for the debt free with cash in the bank leading them to increase risk by deploying more funds in the markets. I appreciate the foil to all that is that presumably the expected interest rate cuts are already more or less baked into stock market prices.
REP imo is a decent prospect for a turnaround chart:of those top ten holdings only REP ( No. 10 ) is close to target range to buy more
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