In this interview with Kiatnakin Phatra Wealth Management, Howard Marks explains why effective risk control is essential to achieving investment success, summarizing his philosophy as “if we avoid the losers, the winners take care of themselves.”
Rather than seeking extraordinary gains, Marks focuses on maintaining consistent, good-quality investments, aspiring for results that are “always good, sometimes great, never terrible.” He shares an analogy, comparing dining at his favorite Italian restaurant to investing with his firm, Oaktree Capital: both aim for reliable quality.
This disciplined approach to risk control, Marks believes, can yield an impressive track record over time without requiring constant excellence.
Here’s an excerpt from the interview:
Marks: So number one, risk control. Our motto is, if we avoid the losers, the winners take care of themselves. So, you know, we don’t go out hunting for elephants; we just go out—we want to have a large number of good investments.
In fact, the Financial Times has a column on Saturdays called Lunch with the FT, and they took me to lunch in December at my favorite Italian restaurant in New York. And I said to the reporter, “Eating in this restaurant is like investing at Oak Tree: always good, sometimes great, never terrible.”
This is really one way for me to describe my goals. It would be great to say we’re always going to be terrific, but it’s not true—nobody can produce that.
But if you can just do, you don’t even have to be good all the time—good almost all the time, great some of the time, but never terrible. And if you do that for a few decades, you’ll have one of the greatest records in history.
You can watch the entire interview here:
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