Foreword
This is a quick note, which tends to be just off the cuff thoughts/ideas that look at current market situations, and to try to encourage some discussions.
If you read my blog often enough, you’ll realize that I spend a lot of time saying “I don’t know”, and, perhaps more disappointingly, not giving any stock tips, suggesting that more people should be wary of risky assets, and droning on about how conservative I am in my portfolio.
As usual, a reminder that I am not a financial professional by training — I am a software engineer by training, and by trade. The following is based on my personal understanding, which is gained through self-study and working in finance for a few years.
If you find anything that you feel is incorrect, please feel free to leave a comment, and discuss your thoughts.
Howard Marks
Howard Marks gave a very insightful lecture in 2019 that reveals all stock market secrets. It is long, and to be blunt, Marks is not the most enchanting orator.
But if you are willing to invest an hour listening to this legend of financial markets, I think you’ll be well rewarded for it.
Some choice quotes:
The challenge is to make money at the same time as you control risk.
And a portfolio with the opportunity to make money, but with the risk under control, is in my opinion, the mark of a professional investor.The 3 stages of the bull market:
The first stage, when only a few exceptionally bright people understand there could be improvement.
The second stage, when most people understand, that improvement is actually taking place.
And the third stage, when everybody believes that things will get better forever.
So, if you buy in the first stage, when most people don’t see a better future, when there’s very little optimism included in asset prices, you get a bargain, and you can make a lot of money.
If you buy in the second stage, when everybody understands that improvement is taking place, you don’t get a bargain, you do OK, you follow the cycle, you buy in at a fair level.
But if you buy in the third stage, when everybody thinks things will get better forever, and when asset prices reflect a great deal of optimism, you pay high prices, which sets you up for substantial losses.The interesting thing about investing, is it’s not what you do, it’s when you do it.
Howard Marks, https://www.youtube.com/watch?v=18iIq4U4N5c
It’s not what you buy, it’s when you buy it, under what conditions, and at what prices.
So, the key to investing, is not buying good things, it’s buying things well.
Janky Thoughts 