Howard Marks: Philosophies on Investing

Howard Marks, co-founder and co-chairman of Oaktree Capital Management and author of The Most Important Thing: Uncommon Sense for the Thoughtful Investor, discusses his investment philosophy and cyclicality in markets.

On taking an alternative approach to achieve success in investing: “One of the most important things [to investment success] is second-level thinking. If you think the same as everybody else, you’re going to take the same actions as everybody else. And if you take the same actions as everybody else, you’re going to perform the same as everybody else. You have to do different things and think differently from the norm – that’s second-level thinking.”

On being an even-keeled investor: “If your emotions make you the victim of cycles, then you’ll end up buying here when you’re feeling good, selling here when you’re feeling bad…Even if you are successful in the long run, you’re subject to vagaries in the short run. Emotion plus short run vagaries will turn it into a disaster.”