Howard Marx's Thoughts On Investing

Howard Marx's Thoughts On Investing

Here's 15 Most Important Points From Howard Marx's Thoughts On Investing

1. deep thinking

In order to make a better profit than others, your thinking skills must also be different.

A better way of thinking needs to be correctly different.

Deep thinking is to predict the wavelength of a decision longer.
What's behind the immediate outcome?

2. Understanding the Efficient Market

In an efficient market, you can't expect more revenue than risk.
However, the market varies in degree of efficiency from time to time.

Features:
1. The price is often wrong
2. Risk-to-risk returns vary from asset to asset
3. Some investors are better than others
4. Inefficient doesn't mean profitable

3. Value

In investment, decisions are not about growth or value.
Investment is about today or tomorrow's value.

The more you try to predict value in the future, the more difficult it is.
You can't make smart investments without a reasonable valuation of your value.

4. the relationship between price and value

Prices and values usually go hand in hand.

Buying a great company at a bad price is a bad investment.
Buying a bad company at a good price is a good investment.

Only in investment, people like it when the 'price' goes up.
5. Understanding Risks

Responding to risks in an investment is an essential factor.

We need to understand, notice when it's high, and know how to control it.

6. Pay attention to the cycle

There are two rules for cycles.
1. Most things have cycles
2. When people forget Rule 1, the best chance comes

The cycle is essentially self-modified.
This helps investors with good attention.

7. the pendulum of attention

The market cycle can be compared to a pendulum.
The clockwork spends the least time in the middle and the most time at both ends.

There are two requirements to see revenue in the cycle.
1. What you notice when you're in a theater company
2. Knowing when to turn around

8. combating negative influence

Greed and fear are the driving forces behind the market.
Value investors want to follow Buffett.

In any case, it is indispensable to know your emotional state clearly at all times for good returns.

Your thoughts are your strongest enemies.

9. Contrarianism

Most investors are trend-followers.
This creates the aforementioned self-enhancing cycle.

So, instead of something as difficult as "buy low, sell high," "buy when people don't like it, sell when they like it" is better.

10. Look for a bargain

The majority of investors start with stocks like Apple and Microsoft.

But cheap and good stocks are in places that people don't see.
Bored small and medium-sized stocks go up to two, three, and ten times.

11. restrained opportunism

The best investors are patient and opportunistic at the same time.
They don't go after the investment.
Study the enterprise, get a sense of intrinsic value.

And wait for the market to sell below that value.
Those who pursue investment always overpay.

12. Know what you don't know

"I don't put you in trouble that you don't know.
The 'things you think you know are." - Mark Twain

Be really honest about what you know.

It doesn't have to be part of every invention.
When it comes to investing, you just need to have your own area.

13. the role of luck

Nasim Talev coined the term "alternative history".

Things can unfold in a variety of ways.
But only one of them will unfold.

The things that seem most likely don't always happen.
Think about this again when you invest.

14. defensive investment

The best money is 'Bok-ri'.
In order for welfare to be successful, you must never change the 'process'.

Focus on avoiding losses rather than chasing big returns.

Always apply a safety margin

15. Organizing everything

The basis of a successful investment is 'value'.

You should always know which assets are worth what.

If you have one, avoid psychological pitfalls and wait for the market to give you a chance.