Wednesday, June 20, 2012

Howard Marks Oaktree Capital: It's all a Big Mistake

Howard Marks' latest memo: "It's all a Big Mistake" is an excellent read on the psychology of investor sentiment, the tendency to overshoot, or to improperly incorporate information into investment decisions.  Marks expands on a few points as to why investors tend to not buy assets that are cheap - or at least not enough of them:
  • Bias or Close-mindedness
  • Capital Rigidity
  • Psychological Excesses
  • Herd behavior
The link above is to Oaktree's secure website where the memo can be read in full or downloaded.   Marks is a excellent writer who possesses great skill and clarity in his memos which are sought out and read by his investing peers.  His recent book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor (Columbia Business School Publishing)is an excellent read that channels a clairvoyance nearly on par with Mr. Buffett.

"Active Management has to be seen as the search for mistakes."
-Howard Marks

FYI - I added a couple books to the "Worthwhile Investment Reading" page:

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