MY FIRST MILLION · EXTRACTED

Howard Marks Warning: Why I'm Getting Out Now

The legendary investor's full framework for knowing when to sell, when to hold, and how to think about risk when everyone else has stopped.

▶794K views on YouTubePreview, 1 of 5 tactics free

With Howard Marks

"The biggest investment errors are not made by people who analyze incorrectly. They're made by people who forget that the cycle exists."
Howard Marks, on the episode

Howard Marks co-founded Oaktree Capital Management, which manages over $170 billion. He's been writing investment memos since 1990. Warren Buffett reads them the day they come out. When Marks says he's getting cautious, it means something. Sam and Shaan sat down with him to extract the complete mental framework behind the call, and what it means for anyone trying to build real wealth in a market that's had a very long run.

Tactic 01

Howard Marks, My First Million

You Can't Predict the Market. You Can Know Where You Are.

The play

Check sentiment and deal activity around you to gauge where the market currently stands.

Howard Marks says

We never know where we're going, but we sure as hell ought to know where we are. Are the TV shows about investing popular or unpopular? If an investor goes to a cocktail party, is he mobbed or shunned? When nobody's afraid, unwise deals can get done easily. Where we stand in the cycle determines what probably is going to happen and how likely it is, and understanding that can improve the odds.

Try this

Today, check simple sentiment signals around you, like how eager people are to do deals or talk about investing, to gauge where the market stands.

3 free unlocks

Tactic 03

The Cycle Always Returns to the Mean

Howard Marks says

Historically, if you bought the S&P when the PE ratio was 23, in every case, with no exceptions, the…

Episode quotes and Try this

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Tactic 04

Being Too Early Is Indistinguishable from Being Wrong

Tactic 05

Great Investing Is Boring

Tactic 06

Being Too Cautious Is Also a Risk

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MY FIRST MILLION, extracted by Podex