In his latest memo titled – Thinking About Macro, Howard Marks provides his thoughts on macro-investing, inflation, the Fed, and gold. On the subject of macro forecasters he says:
That brings me to the subject of forecasters’ track records, or rather the lack thereof. Back in the 1970s, an elder told me, an economist is a portfolio manager who never marks to market,” and that description still seems highly appropriate. Have you ever heard an economist or macro strategist say, “I think there’ll be a recession soon (and xx% of my recession predictions have turned out to be right within a year)”?
Would anyone invest with an investment manager who didn’t publish a track record? Why follow macro forecasters who don’t disclose theirs?
Finally, I want to point out that the same comments apply to most investors. You rarely hear them say they have no idea what the macro future holds or beg off from expressing opinions. One of the most important requirements for success in investing is self-assessment. What are your strengths and weaknesses? If you invest on the basis of your macro views, how often have they helped? Is it something you should keep doing or discontinue?
You can read the entire memo here:
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