During this discussion at Talks At GS, Howard Marks explains why nothing in the investment business is certain. Here’s an excerpt from the interview:
Marks: I have a lot of respect for Peter Bernstein. First of all it kind of goes without saying but I’ll say it anyway, you can’t succeed if you don’t survive.
And one of my favorite adages is don’t forget the man who was six feet tall who drowned crossing the stream that was five feet deep on average.
Surviving on average is irrelevant, you have to survive every day, which means really that you have to survive on the bad days.
And so that’s why I say you have to arrange your affairs which means you’re financing your capital from your investors whatever it is or your portfolio so that you can survive on the bad days.
So that’s one thing, but humility, it’s all about humility, you have to you know… Dirty Harry said a man has to know his limitations.
Mark Twain said that when you know something for certain you can get into big trouble. It’s absolutely the truth and you know nothing in our business is certain and anybody who’s certain is really missing the point.
You can watch the entire discussion here:
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