Howard Marks: The Cardinal Sin Of Investing

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In his recent Oakmark Insights Live interview, Howard Marks discussed the cardinal sin of investing. Here’s an excerpt from the interview:

Marks: I really believe, and I’ve said a million times Anna, that getting out at the bottom, and failing to get in, as you say, is the cardinal sin in investing.

Which is worse, to buy high, or to sell low?

If you buy high, you’ll have some regret. They’ll be a downward fluctuation, you’ll kick yourself for a while but, there is this positive underlying trend which means that the economy will move up over time and the markets will move up over time.

But if you sell at the bottom, fail to get back in, you will miss the recovery and you miss the long-term trend. And you know we really have to take advantage of the long-term trend. That’s the main job of the investor.

Not jumping around from one security to another, or getting in and getting out. The main purpose of the investor should be to enjoy the long-term benefits. Any active steps to improve upon returns, that’s just embroidery around the edges.

You can watch the entire discussion here:

Howard Marks – Insights Live: Which Way Now?

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