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Howard Marks on what matters in investing (and what doesn’t)

Marks is renowned for finding deep value and price distortions in the financial markets

Mumbai / November 24, 2022 / 08:51 AM IST

Howard Marks, co-founder of the US-based hedge fund Oaktree Capital and one of the most celebrated investors of recent times, believes that in the world of investing what really matters is the performance of one’s holdings over a five-year or 10-year period.

“I think most people would be more successful if they focused less on the short run or macro trends and, instead, worked hard to gain superior insight concerning the outlook for fundamentals over multi-year periods in the future,” Marks said in the latest edition of his periodical memo.

The veteran asset manager and author said that investment professionals should focus on the study of the earnings potential of a company, buying companies at attractive prices relative to their potential, hold onto investments as long as the earnings potential is attractive, and make changes to investment only when things cannot be reconfirmed.

“Don’t mess it up by over-trading. Think of buying and selling as an expense item, not a profit center. Investors should find a way to keep their hands off their portfolios most of the time,” he argued.