What A 238 Mile Sailboat Race Can Teach About Investing

By Jack M. Forehand —  I have raced sailboats since I was 12 years old. It has always been a passion of mine. The combination of being on the water while doing something competitive at the same time has always been a big draw for me. Over Labor Day weekend, I competed in the Stamford Vineyard Race on a friend’s boat Threebeans. The race includes many exhilarating moments, but also significant down time, and during those down periods, I couldn’t help but think about all the parallels between what it takes to do well in a race like that and […]

Master Investors Marks, Dalio & Gundlach Issue Cautionary Views on Markets

By John P. Reese — The waning days of August leave many parents looking forward to the start of school and many investors bracing for September, the month that is historically the worst of the calendar year for stocks. Add the increasing uncertainty coming out of Washington and stock valuations that look increasingly overheated, and it’s enough for a few prominent investors to warn that a pullback is probably on its way. That may not be a bad thing. The widely watched Dow Jones industrial average has hit more than two dozen record highs this year, blowing past 21,000 in […]

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Investors Who Dare to Be Different Stand a Better Chance for Success

By John P. Reese In 2006, Oaktree Capital co-chairman Howard Marks wrote a memo titled Dare to Be Great in which he delivered a simple but provocative statement about investing: “This just in: you can’t take the same actions as everyone else and expect to outperform.” Being different, he argues, is “absolutely essential if you want a chance at being superior.” Going against the herd, however, runs counter to human nature and can be exceedingly tough for investors. Just ask famed investor James O’Shaughnessy (a market guru who inspired one of the stock screening models I created for Validea) who […]

Howard Marks: It’s Tough to Be Good at Macro Investing

Global macro hedge funds choose positions in various equity, fixed income, currency, commodities and futures markets based primarily on the economic and political views of various countries or their macroeconomic principles. According to last month’s Barron’s, they’ve suffered poor performance of late. Last year, the article notes, the benchmark HFRI Macro Index returned only 1.29%, trailing the overall hedge fund index’s return of 5.51%.”Their relatively good performance amid the financial crisis in 2008 and 2009 helped attract money,” the article says, “but those days are over.” Brian Shapiro, CEO and president of Simplify, a firm that researches hedge funds and […]

Howard Marks on the Post-Election Markets

In last week’s Barron’s, Oaktree Capital’s Howard Marks reflected on the presidential election and offered a wealth of insight regarding both its complexities and its multi-layered and far-reaching implications. With specific regard to the markets, Marks posed the question: “How could the expectation of a Clinton victory make stock prices rise, and then the reality of her defeat make them rise further?” He explained: “The market often fails to act rationally in the short run, primarily because of the role played by people in determining its course.” In his lengthy essay, Marks delved into a range of economic and political […]