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Howard Marks: Don’t stand in the Path Of An Oncoming Freight Train

In a recent interview at Chicago Booth, Howard Marks discussed how human emotions often drive investors to make poor decisions, such as buying at market highs during booms and selling at lows during downturns.

He stressed the importance of adopting a contrarian mindset, resisting emotional impulses, and, at times, acting against the crowd. However, Marks cautioned that simply opposing the majority is not enough; investors must carefully analyze market dynamics before making decisions.

Drawing from his book The Most Important Thing, which includes insights from investors like Joel Greenblatt, Marks emphasized the value of recognizing emotional biases and embracing a counter-cyclical approach. This strategy, he explained, can lead to more successful investment outcomes over the long term.

My friend Joe Greenblatt, who was one of the great equity investors of all time, inserted in the section on contrarianism that “just because five other people won’t stand in the path of an oncoming freight train doesn’t mean you should.”

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The above has been prepared by Børsgade ApS for information purposes and cannot be regarded as a solicitation or recommendation to buy or sell any security. Nor can the information etc. be regarded as recommendations or advice of a legal, accounting or tax nature. Børsgade cannot be held liable for losses caused by customers’/users’ actions – or lack thereof – based on the information in the above. We have made every effort to ensure that the information in the above is complete and accurate, but cannot guarantee this and accept no liability for errors or omissions.

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