Howard Marks: The Six Key Principles for Successful Investing

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During his recent interview on the In Good Company Podcast, Howard Marks outlines his six key principles for successful investing.

Here’s an excerpt from the interview:

My philosophy is I guess it’s Oaktree’s philosophy six very simple points.

  1. Number one risk control I believe it’s easy to make money in the market. That’s especially true in the good years and most years are good years. The challenge, the real skill is to make money with the risk under control so that if it turns out to be a bad year instead you won’t do too badly.
  2. Number two is consistency. My clients don’t want results that are all over the lot and at the top one year and at the bottom the next so we try to be just consistently a little bit above the middle. But then thanks to risk control in the really bad years we do bounce up to the top.
  3. Number three I believe there’s such a thing as market efficiency, and we target only the less efficient markets.
  4. Number four high degree of specialization, you can’t be a successful generalist in my opinion, you have to know more than everybody else about a few things.
  5. Number five we don’t rely on macro forecasting to drive our investments.
  6. Number six we don’t expect much from market timing.

So that’s the philosophy.

You can watch the entire interview here:

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