Howard Marks at UCLA

[simoan]

I don't have much time for the vast majority of market commentators etc. but one of the few I listen to with interest is Howard Marks. IMHO his memos are required reading for all investors and his book "The Most Important Thing" is one of the few must have investment books. He was recently interviewed at UCLA as part of the launch of his new book on market cycles, and it is essential viewing, especially the section from 20-30 minutes if you only have limited time.

https://www.youtube.com/watch?v=6ATUoZ6qjpI

All the best, Si

[TahiPanasDua]

A most interesting and level-headed discussion with sane truths always worth revisiting. There was nothing particularly new but maybe that was an important message in itself.

I had the feeling that strategies might change a tad for investors who have the luxury of envisioning greater time spans than the parameters of 5 years or so he sets out at the beginning. Especially so if a very long term investor feels he has the resources to weather most ups and downs and has wide diversification etc. and, like so many on this forum, is concentrated on income not prices.

TP2

[simoan]

A most interesting and level-headed discussion with sane truths always worth revisiting. There was nothing particularly new but maybe that was an important message in itself.

No, there's nothing new if you have read his work and are familiar with his thoughts. I only posted it because there may be people that are not familiar with him and the section I highlighted contains some very wise advice. There are not many people that Warren Buffett and Terry Smith listen to. IMHO you cannot listen to such advice regularly enough because no matter how disciplined you try to be, it's surprising how often you forget, such is human nature and the dangers of "recency bias".

I had the feeling that strategies might change a tad for investors who have the luxury of envisioning greater time spans than the parameters of 5 years or so he sets out at the beginning. Especially so if a very long term investor feels he has the resources to weather most ups and downs and has wide diversification etc. and, like so many on this forum, is concentrated on income not prices.

TP2

If you listen right to the end of the Q&A he does actually answer a question on this i.e. if you have the mentality and timescale to ride out market cycles, then LTBH is not a bad approach. Of course, the reason most people on this forum are interested mainly in income and taking a more defensive approach is because of their age. However, from what I've read the past 20 years or so, I don't believe most people properly understand risk adjusted returns, and I would include myself in that up to 2007-09. That was one hell of a lesson! If you concentrate too much on income and completely ignore capital you will likely end up buying a good few Carillions and see a decrease in both - the best approach IMHO probably lies somewhere in between.

All the best, Si

[andyalan10]

Yes he said in answer to a question at the end "Long term buy and hold is better than what most people do, which is buy high and sell low", but from his remarks within the main body of the discussion I don't think he would advocate that as the best approach. Specifically he said "I wouldn't have written the book if I didn't think you should adjust your approach through the cycle".

He does go into more detail by listing different ways one can vary the "aggressiveness" of a portfolio without moving into cash by, for example, choosing companies in defensive sectors, using or not using leverage, favouring large companies rather than small etc. So I would surmise that he would support a strategy of being fully invested throughout, but not necessarily a simple LTBH approach.

The biggest takeaway for me was:- choose your position on the risk:return scale between 0 (treasuries) and 100 (all equities, possibly with leverage) according to you psyche, your age, your resources and needs etc. and then consider whether you should vary that number up or down depending on the point in the cycle that you believe we are at.

Andy