In this interview with Guy Spier, Howard Marks reflects on his approach to investing, stressing emotional discipline and statistical thinking. He avoids overexposure to individual investments, ensuring that no single success or failure defines his performance or self-perception.
During crises like the Global Financial Crisis or Long-Term Capital meltdown, Marks faced moments of doubt but stayed focused on long-term decision-making.
He advises investors to view their track record as a collection of decisions rather than being swayed by one outcome. By helping others remain emotionally centered, he underscores that fear is natural, but success in investing comes from acting rationally despite fear.
Here’s an excerpt from the interview:
Marks: I never made individual investments that were so large that their success or failure affected my performance or changed my view of myself.
So I never had the… I mean my moments of trial were you know the Global Financial Crisis, happens the world is going to hell, it there’s some chance it might end tomorrow the world, and and we’ve been investing aggressively.
And we have to ask whether we’re doing the right thing when the market is telling you do the wrong thing that’s as close as I’ve come to those days of reckoning that you describe. But you know when people come to me for advice because life is difficult, or investing life is, you know I try to tell them that nobody gets it right all the time.
You have to look at your track record over a long period of time, over a large number of decisions. No one decision fundamentally changes that you have to you know be kind of a statistician and think of the your experience is a sample.
And it’s a sample. When a statistician does a sample like a poster they’re trying to take a small number of observations from which they can generalize to what’s true about the universe.
So you have to convince people that you know you’re suffering with this today but one bad decision doesn’t mean you’re a failure it doesn’t really change the question of whether you’re a good investor.
I spent a lot of time trying to keep people emotionally centered, because you know responding emotionally to what goes on in the world, and in your life is a big part of being a human.
But in investing it’s highly counterproductive, and you have to try to get people to resist that, and you know I remember a young PM came to me in ’98, today he’s an old PM, and he’s actually retired 26 years later.
But he came to me in ’98 you know uh Long-Term Capital had melted down, we had the ruble devaluation, the South Sea uh Southeast Asia Crisis.
This guy comes to me I think mainly because of Long-Term, he says to me, and he’s a really like intellectual kind of guy, very well anyway, he says to me I think this is it! You know I think I think the world is going to melt down.
I think it’s going to end, I said well tell me why. Goes through his recitation, I said okay I got it now go back to your desk and do your job.
A battlefield hero and again, I do not pretend to be a man at the cloth but… I don’t pretend to be a battlefield hero. A battlefield hero is is not someone who’s unafraid, it’s somebody who’s afraid but does it anyway. That’s what we have to do in our business.
You can watch the entire discussion here:
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