By
Borsgade
In a recent interview with Barron’s, Howard Marks reflects on his early career in finance, recalling how banks in the 1970s invested heavily in the “Nifty Fifty” — a group of America’s fastest-growing companies, considered unbeatable regardless of their valuation.
However, despite the strength of these companies, investors who held onto their stocks for five years saw losses exceeding 90% due to overpaying. Howard underscores that while the quality of an asset becomes more important over time, price remains a crucial factor.
He cautions that owning a great asset doesn’t guarantee a great investment; success hinges on paying the right price. According to Marks, the key is not just buying good companies but buying them at the right price.
It’s not what you buy; it’s what you pay that determines a good investment. Now, the longer your time horizon, the quality of the thing you buy matters more and the price you paid matters a bit less.
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