In his recent interview with Bloomberg, Howard Marks explained why investors should ignore macro forecasts. Here’s an excerpt from the interview:
Marks: Yes it does but I don’t think there’s anything to be known on that subject [macro forecasts] and I’m sure we don’t know it.
And another tenet of our investment philosophy, they’re only six, we’re going to touch on two today, is that our investment decisions are not based on macro forecasts.
Macro forecasts are very important. The only problem is they’re rarely right, and more importantly any one forecaster is rarely right more often than the others. So we don’t make our decisions on that basis.
We are what’s called bottom-up investors. We invest on the basis of micro not macro. Companies, industries, securities, and we feel there through hard work and skill we can get an edge.
You can watch the entire discussion here:
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