Weekend Reads for Investors: Diverge From the Herd

Oaktree Capital’s founder and chairman Howard Marks publishes periodic memos that are widely considered “must reads” for those in the investment industry, and his latest missive should be no exception. In “Dare to be Great II,” Marks’s follow-up to a piece penned in 2006, he shares his principles for investing success; they are remarkably simple and can be summed up in two questions he poses, “Are you willing to be different, and are you willing to be wrong?”

According to Marks, success in active investing naturally requires a certain degree of financial acumen. He asks, “Why should superior profits be available to the novice, the untutored or the lazy?” But the attributes that separate the great investors from the ordinary ones include the courage to avoid the herd and the intestinal fortitude to stick with their convictions, even if it means looking bad for a spell. It’s great advice, and Marks’ memo is a worthwhile investment of your time.

Below are some other articles and videos that caught my eye in recent weeks that may be of interest to you.

Economic Front

• The latest US jobs report prompted Robert Shiller to tweet, “no recession for years to come,” eliciting a quick challenge from a dissenter. (Mish’s Global Economic Trend Analysis)
• Federal Reserve Bank of Dallas president Richard Fisher warned of the perils of forward guidance and “the ghost of irrational exuberance.” (Federal Reserve Bank of Dallas)

Strategic Thinking

• Wintergreen Fund’s David Winters is no index hugger. (WealthTrack)
• Jeremy Grantham and others on the risks and opportunities of climate change. (Institutional Investor)
• AllianceBernstein puts risk parity under the microscope. (Context)
• Jim Chanos on the Sotheby’s indicator. (CNBC)
• GMO says dynamic asset allocation is essential to achieving retirement goals. (GMO, PDF)
• Upcoming webinar on introducing illiquid investments to total portfolio management and ERM. (PRMIA)

High Profiles

• “Pimco’s Bill Gross Picks Up the Pieces” (Bloomberg Businessweek)
• Has Warren Buffett lost his mojo? (The New York Times) Or is the New York Times dead wrong about Buffett? (Insider Monkey)
• “Inside Sequoia Capital: Silicon Valley’s Innovation Factory” (Forbes)
• Michael Lewis discusses Flash Boys with Charlie Rose. (Charlie Rose, video)

Corporate Spending

• Companies have lousy timing when it comes to share repurchases. (Fortune)
• The stage may be set for capital spending to finally accelerate. (Sober Look)
• Do stock buybacks create or destroy value? (Institutional Investor)

Activists Angle

• With an appeal to Sotheby’s shareholders, Third Point’s Dan Loeb tries to “reinvigorate” its board. And in response, Sotheby’s has filed a detailed defense with the SEC. (US Securities and Exchange Commission)
• Taming the “fringe minority” of activist investors. (New York Times)

Good Governance

• There’s a sweet spot when it comes to board turnover. (Harvard Business Review)
• How concerned would investors be about the rising popularity of dual-class shares? (Market Integrity Insights)

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

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