Howard Marks' New Memo: Risk Revisited ~ market folly

Thursday, September 4, 2014

Howard Marks' New Memo: Risk Revisited

Oaktree Capital's Chairman Howard Marks is out with his latest memo entitled 'Risk Revisited.'  Warren Buffett has said he always looks forward to reading Marks' memos and if that's not enough of an endorsement, we don't know what is.

In his latest piece, Marks draws attention to a few key points he wants to make:

1.  "The future should be viewed not as a fixed outcome that's destined to happen and capable of being predicted, but as a range of possibilities and, hopefully on the basis of insight into their respective likelihoods, as a probability of distributions."

2. "Risk means more things can happen than will happen."

3.  "Knowing the probabilities doesn't mean you know what's going to happen."

4.  "Even though many things can happen, only one will."

His memo then goes on to outline all the various types of risks and we recommend you read it in its entirety as it is quite thorough.

He ends his latest missive by noting that investing can be like playing offense and defense and that today he's paying more attention to loss prevention than the pursuit of gain.

Embedded below is Howard Marks' latest memo, 'Risk Revisited':

You can download a .pdf here.

For more investing wisdom from this manager, be sure to check out Marks' book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor.

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