Howard Marks Quotes

I like to say, “Experience is what you got when you didn’t get what you wanted.

There are old investors, and there are bold investors, but there are no old bold investors.

He pulls free before we make contact. “A moment, please. Allow me to bask in your devotion.” He’s referring to my ankle tattoo. I blush. “I’ve told you a hundred times. It’s only a set of wings.” “Nonsense.” Morpheus grins. “I know a moth when I see one.” I groan in frustration, and he surrenders, letting me press our markings together. A spark rushes between them, expanding to a firestorm through my veins. His gaze locks on mine, and the bottomless depths flicker—like black clouds alive with lightning. For that instant, I’m bared to the bone. He looks inside my heart; I look inside his. And the similarities there terrify me.

Prices are too high” is far from synonymous with “the next move will be downward.” Things can be overpriced and stay that way for a long time . . . or become far more so.

Investment success doesn’t come from “buying good things,” but rather from “buying things well.

Morpheus’s gaze flashes to mine, then back to the chess piece wrapped in his magic. “Stop crying,” his quirky voice scolds. “Queens don’t cry. I taught you better than that.” I bite my quivering lip, and tiny Alice strokes the caterpillar’s face. “But you’re crying . . .” Morpheus lowers a wing and shades his cheek along with the transparent glimmer of his jeweled markings. “Well”—his shrill voice cracks slightly—“contrary to my preferences for lace and velvet, I’m not the queen. So I can cry all I like.

Being too far ahead of your time is indistinguishable from being wrong.” So

Forgetfulness is the catalytic germ of spontaneous creativity

There’s a big difference between probability and outcome. Probable things fail to happen—and improbable things happen—all the time.” That’s one of the most important things you can know about investment risk.

An I must drink sour ale, I must, but never have I yielded to a man before, and that without would or mark upon my body. Nor, when I bethink me, will I yield now.

Maxim 34: If you're leaving scorch-marks, you need a bigger gun. -The Seventy Maxims of Maximally Effective Mercenaries

We have to practice defensive investing, since many of the outcomes are likely to go against us. It’s more important to ensure survival under negative outcomes than it is to guarantee maximum returns under favorable ones.

Here’s the key to understanding risk: it’s largely a matter of opinion.

A man is a man, no more, no less. The awareness of this fact marks the supreme moment of human dignity.

Warren Buffett tells us, “The less prudence with which others conduct their affairs, the greater the prudence with which we should conduct our own affairs.

What the wise man does in the beginning, the fool does in the end.

Investing is a popularity contest, and the most dangerous thing is to buy something at the peak of its popularity. At that point, all favorable facts and opinions are already factored into its price, and no new buyers are left to emerge.

There's only one way to describe most investors: trend followers.

Voltaire: “The perfect is the enemy of the good.” This

Jeb and Morpheus have landed and are rounding up the toys they marked—the ones that got by me and Mom. Morpheus uses blue magic to walk the zombies like puppets toward Jeb, who then swings a golf club, driving them into a net they’ve propped open. Leave it to guys to make a game out of a life-and-death situation. 

She needs to wake up," said Boots. "Hazard is crying. When does she wake up?" Gregor could not find it within him to give his standard reply. To pretend that in a short time Thalia would be back with them, laughing and happy. And somehow it seemed wrong to try. Boots was getting older. Very soon, she would begin to realize the truth on her own, anyway. "She's not going wake up," he told her. "She's dead." "She doesn't wake up?" said Boots. "No, not this time," said Gregor. "This time, she had to go away." Boots looked around at all their faces, at Hazard crying. "Where did she go?" No one had an answer. "Where is Thalia when she doesn't wake up?" The question hung in the air for an eternity. Finally, it was Howard who spoke up. "Why, she's in your heart, Boots." "My heart?" said Boots, putting both hands on her chest. "Yes. That's where she lives now," said Howard. "She can fly away?" asked Boots, pressing her palms tightly against her heart as if to keep Thalia from escaping. "Oh, no, she will stay there forever," said Howard.

Don't ask what the world needs. Ask what makes you come alive, and go do it. Because what the world needs is people who have come alive. —HOWARD THURMAN

The mark of spiritual maturity is not how much you understand, but how much you use. In the spiritual realm, the opposite of ignorance is not knowledge but obedience.

Covering up with one of his wings, I surround myself with the scent of licorice and honey. “You want to hold me while I sleep. You want to watch my face as I dream like you never have—from the outside.” He traces my eye markings with an elegant fingertip. “That will be my memory to cling to, until you’re mine forever at last, both in waking hours and sleep. The question is, do you trust me enough to give me that? To rest in my arms tonight?” I hold his soft palm against my cheek. “Will you sing me my lullaby?” He weaves his fingers through my hair and presses my forehead to his. “Forever and always,” he whispers. As he hums the tune that has been inside my mind and heart all my life, I close the waterfall canopy, cocooning us within our own frozen pocket of time.

Here is an appropriate use of the exclamation mark: The last thing he expected when the elevator door opened was the snarling tiger that leapt at him. "Ahhhhh!" ... In almost all situations that do not involve immediate physical danger or great surprise, you should think twice before using an exclamation mark. If you have thought twice and the exclamation mark is still there, think about it three times, or however many times it takes until you delete it.

Everything you needed to know in the years leading up to the crash could be discerned through awareness of what was going on in the present.

Risk means uncertainty about which outcome will occur and about the possibility of loss when the unfavorable ones do.

The biggest investing errors come not from factors that are informational or analytical, but from those that are psychological. Investor

people should like something less when its price rises, but in investing they often like it more.

Why is dissatisfaction taken to be a mark of failing powers and patience, when it might just as easily be understood as a proper judgment on a foolish world?

She looked as though everything that she didn't like had happened to her.

Skepticism and pessimism aren’t synonymous. Skepticism calls for pessimism when optimism is excessive. But it also calls for optimism when pessimism is excessive.

There’s only one way to describe most investors: trend followers. Superior investors are the exact opposite. Superior investing, as I hope I’ve convinced you by now, requires second-level thinking—a way of thinking that’s different from that of others, more complex and more insightful.

the three stages of a bull market”: the first stage, when only a few unusually perceptive people believe things will get better, the second stage, when most investors realize that improvement is actually taking place, and the third stage, when everyone concludes things will get better forever.

The most dangerous thing is to buy something at the peak of its popularity. At that point, all favourable facts and opinions are already factored into its price and no new buyers are left to emerge

It is widely believed that the snails did not even know they overthrew the shiners, so nonexistent was the resistance," said Howard.

An accurate estimate of intrinsic value is the essential foundation for steady, unemotional and potentially profitable investing.

There’s a big difference between probability and outcome. Probable things fail to happen—and improbable things happen—all the time.” That

There are three ingredients for success—aggressiveness, timing and skill—and if you have enough aggressiveness at the right time, you don’t need that much skill.

In investing, there is nothing that always works, since the environment is always changing, and investors’ efforts to respond to the environment cause it to change further

History doesn’t repeat itself, but it does rhyme.

As Sir John Templeton put it, “To buy when others are despondently selling and sell when others are greedily buying requires the greatest fortitude and pays the greatest reward.

The superior investor is mature, rational, analytical, objective and unemotional.

It’s frightening to think that you might not know something, but more frightening to think that, by and large, the world is run by people who have faith that they know exactly what’s going on.

While waiting for promised blessings, one should not mark time, for to fail to move forward is to some degree a retrogression. Be anxiously engaged in good causes, including your own development.

I crumple, my palm skating along the tree’s frozen face as I plop to the ground. “Alyssa?” Morpheus crouches beside me in an instant. He catches my chin and forces me to look at him. “Are you feeling anemic again?” I struggle to breathe. It grates inside my chest, like inhaling angry bees. Blood creeps into my throat and gags me. Morpheus’s jeweled markings flash through an anxious kaleidoscope of colors.

As I’ve indicated earlier, the riskiest thing in the world is the belief that there’s no risk. By the same token, the safest (and most rewarding) time to buy usually comes when everyone is convinced there’s no hope.

It follows from the above that risk is high when investors feel risk is low. And risk compensation is at a minimum just when risk is at a maximum (meaning risk compensation is most needed). So much for the rational investor!

Expensive illogicalities and inefficiencies do not worry the monsters of American bureaucracy, and the taxpayers are enthusiastic and eager to spend fortunes in the name of fighting crime. Prison places cost the US taxpayer more than university places. The American belief that prisons are the best way to combat crime has led to an incarceration rate that is at least five times that of almost any industrialised nation. Overcrowding is endemic. Conditions are appalling, varying from windowless, sensory-deprived isolation to barren futile brutality.

Once in a while, however, the future turns out to be very different from the past. It’s at these times that accurate forecasts would be of great value. It’s also at these times that forecasts are least likely to be correct. Some forecasters may turn out to be correct at these pivotal moments, suggesting that it’s possible to correctly

If one is approached with a deal predicated on cycles having ceased to occur, remember that invariably that’s a losing bet.

•Scepticism and pessimism aren’t synonymous. Scepticism calls for pessimism when optimism is excessive. But it also calls for optimism when pessimism is excessive.

when risk bearing doesn’t work, it really doesn’t work, and people are reminded what risk’s all about.

Patient opportunism, buttressed by a contrarian attitude and a strong balance sheet, can yield amazing profits during meltdowns.

Will Rogers said, “You’ve got to go out on a limb sometimes because that’s where the fruit is.” None of us is in this business to make 4 percent.

Experience is what you got when you didn’t get what you wanted.

It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.

Being too far ahead of your time is indistinguishable from being wrong.

Here’s the key to understanding risk: it’s largely a matter of opinion. It’s hard to be definitive about risk, even after the fact. You

I’m convinced that no idea can be any better than the action taken on it,

Never forget the six-foot-tall man who drowned crossing the stream that was five feet deep on average.

He stretches languorously under me, and the silvery scar on his abdomen catches the light, that telltale mark from Sister Two when he fought her inside Butterfly Threads just weeks ago. When he almost died to help me and Jeb escape. But I didn’t let him die, because I couldn’t imagine a world without him. I can’t imagine a future without him, either. Not anymore.

He had a week’s growth of a beard on his face and round wire-rimmed glasses on. This was what he pictured a film director to look like—a cross between Ron Howard and Steven Spielberg.

Every once in a while, an up-or-down-leg goes on for a long time and/or to a great extreme and people start to say "this time it's different." They cite the changes in geopolitics, institutions, technology or behaviour that have rendered the "old rules" obsolete. They make investment decisions that extrapolate the recent trend. And then it turns out that the old rules still apply and the cycle resumes. In the end, trees don't grow to the sky, and few things go to zero.

SETH KLARMAN: Most of these characteristics are not permanent. Something broadly accepted can become controversial or even taboo. Information can become more or less available. Thus, an asset class deemed close to efficient at one point may become quite inefficient at another. European

Buying something for less than its value. In my opinion, this is what it’s all about—the most dependable way to make money. Buying at a discount from intrinsic value and having the asset’s price move toward its value doesn’t require serendipity; it just requires that market participants wake up to reality. When the market’s functioning properly, value exerts a magnetic pull on price.

The fact that your brain becomes more risk seeking in bull markets and more conservative in bear markets means that you are neurologically predisposed to violate the first rule of investing, “buy low and sell high.” Our flawed brain leads us to subjectively experience low levels of risk when risk is actually quite high, a concept that Howard Marks refers to as the “perversity of risk.

Like so many other things in the investment world that might be tried on the basis of certitude and precision, waiting for the bottom to start buying is a great example of folly. So if targeting the bottom is wrong, when should you buy? The answer’s simple: when price is below intrinsic value.

Selling for more than your asset’s worth. Everyone hopes a buyer will come along who’s willing to overpay for what they have for sale. But certainly the hoped-for arrival of this sucker can’t be counted on. Unlike having an underpriced asset move to its fair value, expecting appreciation on the part of a fairly priced or overpriced asset requires irrationality on the part of buyers that absolutely cannot be considered dependable.

If everyone likes it, it's probably because it has been doing well. Most people seem to think that outstanding performance to dates presages outstanding future performance. Actually, it's more likely that outstanding future performance to date has borrowed from the future and thus presages subpar performance from her on out.

Love is neither a conditional business nor an ever-fixed mark arrangement. People always know somewhere inside them if they are not loved. No gestures, talk, conciliation, pronouncements can prevail over that deep instinctual knowledge.

The key turning point in my investment management career came when I concluded that because the notion of market efficiency has relevance, I should limit my efforts to relatively inefficient markets where hard work and skill would pay off best.

If your behavior is conventional, you’re likely to get conventional results—either good or bad. Only if your behavior is unconventional is your performance likely to be unconventional, and only if your judgments are superior is your performance likely to be above average.

The correctness of a decision can’t be judged from the outcome. Nevertheless, that's how people assess it. A good decision is one that’s optimal at the time it’s made, when the future is by definition unknown. Thus, correct decisions are often unsuccessful, and vice versa.

He spins us both, wrapping us in his wings until I’m dazed and giggling. “I wanted to lift you above me and swing you in circles until we were both dizzy and laughing,” he murmurs against my neck as we tumble to the ground, trapped beneath his tented wings. My body aches on impact—but it’s a delicious ache. I can hardly breathe with the weight of his ribs covering mine, with the scent of his tobacco surrounding me, smothering and intoxicating. The curve of his smiling mouth glides along my collarbone and I gasp at the velvety sensation. I force his head up so I can look at him . . . break the spell. He slips the bejeweled headband from my hair, sweeping stray strands from my face. The slickness of his gloves grazes my eye markings. “I wanted to kiss your lips and share your breath,” he says softly as he leans close.

Charlie Munger gave me a great quotation on this subject, from Demosthenes: “Nothing is easier than self-deceit. For what each man wishes, that he also believes to be true.” The belief that some fundamental limiter is no longer valid—and thus historic notions of fair value no longer matter—is invariably at the core of every bubble and consequent crash. In fiction, willing suspension of disbelief adds to our enjoyment.

Nothing less than a great daring in the face of overwhelming odds can achieve the inner security in which fear cannot possibly survive. It is true that a man cannot be serene unless he possesses something about which to be serene. Here we reach the high-water mark of prophetic religion, and it is of the essence of the religion of Jesus of Nazareth. Of course God cares for the grass of the field, which lives a day and is no more, or the sparrow that falls unnoticed by the wayside. He also holds the stars in their appointed places, leaves his mark in every living thing. And he cares for me! To be assured of this becomes the answer to the threat of violence—yea, to violence itself. To the degree to which a man knows this, he is unconquerable from within and without.

Most people strive to adjust their portfolios based on what they think lies ahead. At the same time, however, most people would admit forward visibility just isn't that great. That's why I make the case for responding to the current realities and their implications, as opposed to expecting the future to be made clear.

The desire for more, the fear of missing out, the tendency to compare against others, the influence of the crowd and the dream of the sure thing—these factors are near universal. Thus they have a profound collective impact on most investors and most markets. The result is mistakes, and those mistakes are frequent, widespread and recurring.

A Philippine-brothel-owning member of the House of Lords was staying at the house of a Spanish Chief Inspector of Police. The Lord was being watched by an American CIA operative who was staying at the house of an English convicted sex offender. The CIA operative was sharing accommodation with an IRA terrorist. The IRA terrorist was discussing a Moroccan hashish deal with a Georgian pilot of Colombia's Medellín Cartel. Organising these scenarios was an ex-MI6 agent, currently supervising the sale of thirty tons of Thai weed in Canada and at whose house could be found Pakistan's major supplier of hashish. Attempting to understand the scenarios was a solitary DEA agent. The stage was set for something.

Risk is incredibly important to investors. It’s also ephemeral and unmeasurable. All of this makes it very hard to recognize, especially when emotions are running high. But recognize it we must.

An accurate opinion on valuation, loosely held, will be of limited help. An incorrect opinion on valuation, strongly held, is far worse. This one statement shows how hard it is to get it all right.

The following brief points are like magic moccasins. They guarantee safe guidance through the forest of people. To walk safely, wear them! 1. The most persuasive power you have toward others is a mature self. 2. The mark of greatness is to be superior without feeling superior. 3. "The consciousness of being loved softens the keenest pang." (Joseph Addison) 4. The turning point in all your exterior relations comes when you start changing your inner self. 5. Strong people attract the weak. 6. Possessiveness and dependency are not states of love. 7. Your own level of being attracts the kind of people who enter your life. 8. "He is happy as well as great who needs neither to obey nor command in order to be something." (Goethe) 9. Your True Self cannot be afraid of anyone. 10. You break the cord of painful thought toward another person by snipping the connection within your own mind. 11. It is very painful to pretend to be someone. 12. Any sincere effort at bettering your human relations returns a reward. 13. Don't drain your energy by thinking negatively toward people who harm you. 14. You get along with others to the exact degree that you get along with yourself. 15. A real person stands out like a human being among statues.

It's worth noting that the assumption that something can't happen has the potential to make it happen, since people who believe it can't happen will engage in risky behaviour, and thus alter the environment.

In good years, defensive investors have to be content with the knowledge that their gains, although perhaps less than maximal, were achieved with risk protection in place, even though it turned out not to be needed.

In bubbles, infatuation with market momentum takes over from any notion of value and fair price, and greed (plus the pain of standing by as others make seemingly easy money) neutralises any prudence that might otherwise hold sway.

Although the guilty verdict surprised few, the size of the resulting fine stunned the company and the country. For each of the 1,462 carloads of oil that had enjoyed an illegal rebate, Landis levied the highest possible fine, $20,000, generating a spectacular cumulative total of $29,240,000. Commenting on the hefty charge, Mark Twain drolly remarked that the sum evoked the bride’s proverbial astonishment on the morning after her wedding: “I expected it but didn’t suppose it would be so big.

They were the children of the Jackie Robinson elite, whose parents rose up out of the ghettos, and the sharecropping fields, went out into the suburbs, only to find that they carried the mark with them and could not escape. Even when they succeeded, as so many of them did, they were singled out, made examples of, transfigured into parables of diversity. They were symbols and markers, never children or young adults. And so they come to Howard to be normal—and even more, to see how broad the black normal really is.

If you've settled on the value approach to investing and come up with an intrinsic value for a security or asset, the next important thing is to hold it firmly. That's because in the world of investing, being correct about something isn't at all synonymous with being proved correct right away.

When private bands of fanatics commit atrocities we call them "terrorists," which they are, and have no trouble dismissing their reasons. But when governments do the same, and on a much larger scale, the word "terrorism" is not used, and we consider it a sign of our democracy that the acts become subject to debate. If the word "terrorism" has a useful meaning (and I believe it does, because it marks off an act as intolerable, since it involves the indiscriminate use of violence against human beings for some political purpose), then it applies exactly to the bombings of Hiroshima and Nagasaki.

little known and not fully understood; fundamentally questionable on the surface; controversial, unseemly or scary; deemed inappropriate for “respectable” portfolios; unappreciated, unpopular and unloved; trailing a record of poor returns; and recently the subject of disinvestment, not accumulation.

My intruder leaned into the dim light, revealing a face both beautiful and terrifying. He wasn’t human. No, he was far too perfect and mystical for that. Markings, resembling tattoos, flashed with jeweled colors beneath his dark, fathomless eyes. His blue hair swayed, out of sync with the wind gushing through my window.

Risk arises as investor behaviour alters the market. Investors bid up assets, accelerating into the present appreciation that otherwise would have occurred in the future, and thus lowering prospective returns. The ultimate irony lies in the fact that the reward for taking incremental risk shrinks as more people move to take it.

This paradox exists because most investors think quality, as opposed to price, is the determinant of whether something's risky. But high quality assets can be risky, and low quality assets can be safe. It's just a matter of the price paid for them...Elevated popular opinion, then, isn't just the source of low return potential, but also of high risk.

As the war went on, opposition grew. The American Peace Society printed a newspaper, the Advocate of Peace, which published poems, speeches, petitions, sermons against the war, and eyewitness accounts of the degradation of army life and the horrors of battle. The abolitionists, speaking through William Lloyd Garrison’s Liberator, denounced the war as one “of aggression, of invasion, of conquest, and rapine—marked by ruffianism, perfidy, and every other feature of national depravity . . . ” Considering the strenuous efforts of the nation’s leaders to build patriotic support, the amount of open dissent and criticism was remarkable. Antiwar meetings took place in spite of attacks by patriotic mobs.

To illustrate the marked atmospheric contrast between the two cities, the writer Frank Carpenter observed that in New York, “a streetcar will not wait for you if you are not just at its stopping point. It goes on and you must stand there until the next car comes along. In Washington people a block away signal the cars by waving their hands or their umbrellas. Then they walk to the car at a leisurely pace, while the drivers wait patiently and the horses rest.” While the capital might lack “the spirit of intense energy” that animated New York, Carpenter concluded that Washington, with its broad, clean streets and fine marble buildings (and its shanties generally hidden from view), offered “the pleasanter place in which to live.

We conclude that most of the time, the future will look a lot like the past, with both up cycles and down cycles. There is a right time to argue that things will be better, and that's when the market is on its backside and everyone is selling things at giveaway prices. It's dangerous when the market's at record levels to reach for a positive rationalisation that has never held true in the past.

“Is Jeb alive?” I ask Morpheus. White bleeds into his jeweled markings—the color of indifference. “I didn’t kill him, if that’s what you’re implying.” “You know it’s not. Could you for once just give me a straight answer?” He gazes up at the smoky gray sky. “Your mortal is alive and well. In fact, you will no doubt be seeing him very soon.” Relieved tears spring into my eyes. “So, that means you know where he is?” Is it possible Morpheus took Jeb under his wings after all? Dad stops stuffing the fabric in the bag, as if waiting to hear the answer. Appraising his cane, Morpheus growls. “I do know where he is.” Before I can respond, he lifts his eyes to mine, jewels now bordering on emerald green. “I suppose I should be grateful his name wasn’t the first thing that came out of your mouth.”

My passionate interest in social justice and social responsibility has always stood in curious contrast to a marked lack of desire for direct association with men and women. I am a horse for single harness, not cut out for tandem or team work....Such isolation is sometimes bitter but I do not regret being cut off from the understanding and sympathy of other men....I am compensated for it in being rendered independent of the customs, opinions and prejudices of others and am not tempted to rest my piece of mind upon such shifting foundations.

Can you send stuff out from Nepal by air, John?’ ‘Ooh! No. No. I can’t do anything like that. No. No. No. Now, I know a man. He knows a man who might know.’ ‘How much would it cost?’ ‘Well, money is the thing, and they always do things for a fair and honest price, I promise you.’ ‘What’s a fair price, John?’ ‘You will tell me, I’m quite sure.’ ‘What will you want out of it, John?’ ‘If I help you do business, I’m sure you will give me a drink.’ ‘A drink?’ ‘Yes. If a man does something for you, you give him a drink. Please, if everything goes well, give me a drink.’ ‘Can you check that the quality will be all right?’ ‘I only smoke Tom Thumb, but I know a man who has a knife.’ I took this as a yes. ‘Can you make it smell-proof?’ ‘Not if God made it smell.’ ‘Do you know a man who can?’ ‘No. But if you do, let him come and do it, or give me instructions.’ ‘How much can they send?’ ‘I should think it depends on when you want to do it by.’ ‘Well, John, the Americans will want to do a ton as soon as possible.’ ‘Now I was in America once, and the thing is that Americans will always want more, and there is no end to their madness. Lovely people, for sure, but you have to keep them in line. When my visa ran out, the Immigration asked me why I wanted to extend it, and I said it was because I hadn’t run out of money. He stamped it and said, “Have a nice day.” So, if the Americans ask for a ton tomorrow, say you will do half a ton when Wales win the Triple Crown. That will deal with their madness, and everyone can get on with their lives. It saves all that tidding.’ ‘Tidding?’ ‘Talking Imaginary Deals.’ Accurately conveying the contents of my conversation with Old John to Ernie wasn’t easy. I told Ernie hashish could be exported from Nepal for about the same price as Robert Crimball charged in Bangkok, but 500 kilos was the most they could do at one time, and someone would have to be sent out to ensure the consignment was smell-proof. Ernie sent his right-hand man, Tom Sunde, with money, instructions, and smell-proof know-how. Tom came to London first before going to Kathmandu to meet Old John. He had been authorised by Ernie to keep nothing from me regarding the intricacies of the New York scam.