I’m always fascinated with the way financial pundits discuss their own fallibility and the way they think about the fact that being wrong is an inevitability for anyone venturing guesses about the future. I suppose my interest is a bit like the gleeful enjoyment Hollywood gets out of making films that satire or skewer the movie biz, a tradition dating back decades to the very beginning of Hollywood.
Anyway, Howard Marks closes his latest epic memo (this is my third time linking to it) with a very well-done coda about his own views. It reads like a Pundit’s Prayer of sorts and I wanted to share it with you here…
Before I close, I want to make it abundantly clear that when I call for caution in 2006-07, or active buying in late 2008, or renewed caution in 2012, or a somewhat more aggressive stance here in early 2016, I do it with considerable uncertainty. My conclusions are the result of my reasoning, applied with the benefit of my experience (and collaboration with my Oaktree colleagues), but I never consider them 100% likely to be correct, or even 80%. I think they’re right, of course, but I always make my recommendations with trepidation.
I read the same newspapers as everyone else. I see the same economic data. I’m buffeted by the same market movements. The same factors appeal to my emotions. Maybe I’m a little more confident in my reasoning, and certainly I have more experience than most. But the key is that – for whatever reason – I’m able to stand up to my emotions and follow my conclusions. None of them can be documented or proved. If they could be, most intelligent people would reach the same conclusions, with the same degree of confidence. I tell you this only to communicate my feeling that no one should fear he’s not up to the task just because he’s unsure of his conclusions. These aren’t things about which certainty is attainable.
The whole thing is an important read, find it here:
Latest memo from Howard Marks: On the Couch (Oaktree)
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