Bloomberg Radio interviews Howard Marks from Oaktree Capital Group

And these are some of the things that he said:

1. Trading and investing are two different things:

I hate the word trade. Trading and investing are two different things. To me, trading connotes doing things in the short term to try and make a profit based on the events of today or tomorrow.

Investing is a much more worthwhile pursuit. It means putting out your money in a way that will work for you in the long run. We talk about whether investing is easy or hard. It depends on what you want to accomplish. Getting average results is incredibly easy. Getting above-average results is incredibly hard.

If the average investor thinks they can easily go out and get above-average results, they’re going to do the wrong things. They’re going to spend money on commissions and fees. They’re probably going to invest with emotion and get into trouble.

2. Don’t try to be cute; just hold it:

The things that most people do to improve on the situation in the short run usually make it worse. That’s what gets people to buy when they’re excited and sell when they’re depressed – to buy when things are high and sell when they’re low. Buy it and hold it. It’s impossible to do the right thing at the right time. And if you can’t time things, then efforts to do so can only screw it up.

3. Don’t follow emotions:

The main mistake people make, be they individuals or professionals, is they allow themselves to be effected by emotion. Emotion is the enemy.

Longer form here.


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