Howard Marks — How to Invest with Clear Thinking (#338)

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[05:49] We kick things off with an A.E. Housman poem.

[06:53] What is mujō, and how did it become a part of Howard’s life philosophy?

[09:22] According to Howard (and a prominent insurance company): you can’t predict, but you can do this.

[11:09] In what ways did Howard’s company prepare for 2008’s bubble to burst when a lot of others were pulling out of the market, and how did he reassure investors eager for a return to take the long view?

[14:40] How does someone get the odds on their side, and what did it take to get Howard to turn 20 years of memos into a book?

[18:13] Most of us are essentially cautious or essentially aggressive. Is either bias particularly good for choosing when to invest?

[23:06] Is it possible to develop stoic resilience in the face of a mercilessly fluctuating market, or is this something with which one is born?

[24:35] Howard talks about the synergy of his 31-year partnership with Bruce Karsh and what each brings to the table.

[32:14] To what does Howard credit the fact that there have never been any serious arguments over the span of this 31-year partnership?

[33:03] Is there a secret formula to getting along with business partners through emotionally trying times?

[34:56] How might someone vet a potential partner as a good fit before going into business with them?

[37:37] Howard elaborates on why, in addition to an opinion regarding what’s going to happen, people should have a view on the likelihood that their opinion will prove correct.

[42:36] According to Henry “Dr. Doom” Kaufman, it’s these two kinds of people who lose a lot of money.

[43:23] What reading does Howard recommend for people looking to expand their awareness of limited knowledge?

[47:08] Can dumb money become smart money?

[49:02] Howard says his life is pretty calm and he tries to keep it that way. But what might disrupt this calm and what would he do to reel things back to reason?

[50:35] How does Howard maintain a balance between the confidence of experience and an understanding that all knowledge is incomplete in order to take action?

[52:50] The case to be made against stop-loss orders and other templated approaches to investment.

[54:27] To Howard, superior judgment outweighs any process or rule. But what is it?

[57:44] The one simple question Howard would ask of each investment under consideration.

[58:17] It’s not what you buy, it’s what you pay.

[1:01:31] Expressions too absolute to be useful in a world beset by uncertainty and randomness — like the stock market.

[1:02:27] How does Howard check the market’s temperature?

[1:05:27] The three stages of the bull market (and, conversely, the bear market).

[1:07:17] Currently, what has Howard hopeful and what has him worried about the economy?

[1:12:20] Why it’s important for people to invest only at a level that makes them comfortable.

[1:16:26] The twin risks of investing and the case for finding a comfortable middle.

[1:18:08] In what ways does Howard most disagree with Warren Buffett’s style and strategies?

[1:22:57] Do the games people play accurately determine their risk tolerance for investing?

[1:26:21] Investment misconceptions that prevail and what a lot of otherwise smart people miss about the nature of cycles.

[1:29:20] We can’t expect the market — or life in general — to accommodate our needs or desires. Patience is essential.

[1:31:21] Lessons Howard learned from financial historian Peter Bernstein.

[1:35:19] Newsletters, columnists, economists, or writers who Howard finds himself excited to read these days.

[1:38:15] The book Howard is reading now and recommends.

[1:40:46] What is Howard’s take on cryptocurrency, and how do we measure its intrinsic value?

[1:45:33] Growth or venture investors Howard admires.

[1:49:11] Mental models or heuristics that Howard has used in his investing life that are particularly valuable across the board in life.

[1:51:26] Final thoughts.