By
Borsgade
In his recent memo, Howard Marks explores the concept of “Mr. Market,” a metaphor introduced by Benjamin Graham to describe the stock market’s erratic behavior. Marks discusses the market’s tendency to miscalculate asset values due to emotional swings between optimism and pessimism.
He reflects on the recent weeks market volatility, including the large drop in Japan, highlighting how psychological factors, rather than fundamental changes, often drive price fluctuations. Howard emphasizes the importance of rational analysis over emotional reactions in investment decisions and advises investors to capitalize on market miscalculations by buying undervalued assets and selling overvalued ones, rather than being swayed by the market’s irrational behavior.
Here are the key takeaways:
See Mr. Market’s overreactions for what they are and accommodate him, selling to him when he’s eager to buy regardless of how high the price is, and buying from him when he desperately wants out.
Share the news
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.
Readers are advised that investing may involve a risk of loss that cannot be determined in advance, and that past performance and price development cannot be used as a reliable indicator of future performance and price development. For further information please contact info@borsgade.dk
In this interview with Jason Zweig, the editor of the 75th anniversary edition of Benjamin Graham’s classic book ‘The Intelligent Investor’, he discusses Graham’s timeless principles for successful investing.
In a recent interview, François Rochon discusses his approach to identifying exceptional businesses by combining quantitative and qualitative analysis. He starts by examining historical performance metrics such as return on capital, profit margins, debt levels, and the quality of earnings to identify strong companies.
In a recent interview, Cliff Asness delves into the complexities and prospects of rational investing, especially during times of significant market inefficiency
In his latest article, Michael Mauboussin presents a collection of their most interesting and controversial charts and insights from their reseach.
