I’m lucky to have received many gifts of investment insight early in my career. Perhaps foremost among them is one I picked up in New York about 40 years ago, at a lunch meeting of what we called the Third Thursday Group. It concerned the three stages of a bull market:
- the first, when only a few especially insightful people suspect improvement might occur,
- the second, when most people accept that improvement is actually taking place, and
- the third, when everyone concludes that things are sure to improve forever.
Between the first stage and the last, nothing has to have changed in terms of fundamentals. The difference lies in the perspective investors are bringing to their decisions. But clearly, it’s great to be a buyer in the first stage and essential not to be in the last.
(Hat Tip: Ramarao Venkatesh)
One of the most famous investors in the world has starting buying into India .
At the end of the third quarter (i.e. 30 Sept,2015), his legendary fund had assets under management of $100.2 Billion
In the third quarter, he bought 601,246 shares of iShares MSCI India ETF, a 0.4% portfolio weight. The position is now valued at $16.35 Million
He also purchased 470,200 shares of Infosys Ltd., a 0.21% portfolio weight. The share price averaged $17.The position is now valued $ 7.57 Million
The investor?Howard Marks of Oaktree Capital
Are we doomed to repeat our mistakes?
The bottom line is that even though knowing financial history is important, requiring people to study it won’t make a big difference, because they’ll ignore its lessons. There’s a very strong tendency for people to believe in things which, if true, would make them rich. Demosthenes said, “For that a man wishes, he generally believes to be true” Just like in the movies, where they show a person in a dilemma to have an angel on one side and a devil on the other, in the case of investing, investors have prudence and memory on one shoulder and greed on the other. Most of the time greed wins. –said Howard Marks
Latest Memo from Howard Marks of Oaktree Capital