In this interview with TV Tokyo, Howard Marks explains why investors who can control their emotions benefit from market swings. Here’s an excerpt from the interview:
Marks: Einstein said that the definition of insanity is doing the same thing over and over and expecting different results.
And if a forecaster has been making forecasts for a long time and has rarely been right you should stop listening to the forecast.
If a Central Bank has been targeting an inflation level for many years and has not produced it you should understand that these things are not controllable.
Host: The FED has taken a lot of investors into the wrong directions but it may be good for the investors who are all wrong together, and actually it’s in a sense that they were not the only ones who lost. But at the same time this kind of a situation did provide you the good investment opportunity for you?
Marks: Well basically what you’re saying is that misery loves company and that’s an old saying. Of course people regret being wrong but they feel better about it if everyone’s wrong, which most people have been.
I would say that anytime there are expectations which don’t come true the market is likely to have a very strong reaction and those of us who didn’t follow that expectation ,and who have our emotions under control, have the possibility of profiting from those swings.
You can watch the entire discussion here:
https://youtu.be/nlauQjDx5GM?t=230
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