Howard Marks: The Right Way To Think About Stocks

Johnny HopkinsHoward MarksLeave a Comment

During this interview with BNN Bloomberg, Howard Marks discussed the right way to think about stocks. Here’s am excerpt from the interview:

Marks: Well it doesn’t matter when the escalator is on the way up but when it stops going up, or when it goes down, and you have to say well am I going to hold it, or am I going to sell out. Am I going to take my loss. It helps to have some understanding of what you say, why do we buy stocks?

The fact that we believe they’ll go up is not enough.

The question is what makes us think they’ll go up? Why would a stock go up? And the answer is you should think of a stock as owning a piece of a company that you would like to own for a long time.

Not for trade. Not because you think it’s going up tomorrow. But because you think it has a good future and if people buy for that reason and you know with a solid foundation of belief, when times get tough and prices go down maybe they have enough confidence to hold on, and hold through the dip.

The economies, like Canada’s, like the US, have a positive underlying trend you want to participate in. Corporations have a positive underlying trend and you want to get on those trends and stay with them for the long term.

Not jump in, jump out, jump in, jump out based on what the people on TV say in the morning.

You can watch the entire discussion here:

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