The more I think about it, the bottom line is clear:
- The world is an uncertain place
- Its more uncertain today than at any other time in our lifetimes
- Few people know what the future holds much better than others
- And yet, investing deals entirely with the future, meaning investors cant avoid making decisions about it
- Confidence is indispensable in investing, but too much of it can be lethal
- The bigger the topic (world, economy, markets, currencies and rates), the less possible it is to achieve superior knowledge
- Even our decisions about smaller things (companies, industries and securities) have to be conditioned on assumptions regarding the bigger things, so they, too, are uncertain
- The ability to deal intelligently with uncertainty is one of the most important skills
- In doing so, we should understand the limitations on our foresights and whether a given forecast is more or less dependable than most
- Anyone who fails to do so is probably riding for a fall.
(Howard Marks, Memo, Uncertainty 11 May 2020)
Howard Stanley Marks (born April 23, 1946) is an American investor and writer. He is the co-founder and co-chairman of Oaktree Capital Management, the largest investor in distressed securities worldwide. In 2020, with a net worth of $2.1 billion, Marks was ranked No. 391 on the Forbes 400 rankings of the wealthiest
