저자: HowardMarks · 외국인
요약 보기
시장 효율성을 전제로 평균 이상 수익은 어렵다고 설명하며, 매크로 예측은 대부분 무용하고 위험은 '나쁜 결과의 가능성'으로 봐야 한다고 주장. 수익은 기업·산업 등 미시적 지식 우위에서 나오며, 저위험·고수익을 동시에 추구하기는 어렵다고 강조. 특정 자산에 대한 가격 방향 예측 발언은 없음.
다듬은 글
When I was offered the chance to discuss investment philosophy, I said there's no way I'd rather spend my birthday. It starts with a conscious decision as to what you want to accomplish. Now, this may sound easy. Well, we want to have more money rather than less. We want to have a higher return rather than less.
But the starting question for any organization in investing should be will we will we settle for average or do we want to try to be above average? That sounds like an easy one. But you have to recognize that investing, it's extremely easy to be average. You can buy off-the-shelf products that will guarantee you that you'll do average or you can try to be above average, which is extremely difficult.
And there is no sure-fire solution to how to get there. And if you try to be above average, it exposes you to the risk of being below average. The two are inseparable. So, thoughtfully, consciously, intentionally, which is it for you and your organization? Next, you I believe that an organization has to have a creed, a religion, the things it believes in, the things it doesn't believe in, the things it will do, the things it won't do because it doesn't trust them.
And you have to stick to it. And again, it has to be conscious and intentional. We have to make decisions. What will be our intention? What do we believe in? Will we trust macro forecasting or will we abstain from it? Will we How do you think about risk? Will you take a high-risk approach or a low-risk approach?
Which is your route to success? It's not the same for everybody. Um do you believe in the efficient market? This is extremely important. It's the most important concept I took away from my uh graduate uh education at the University of Chicago in the late '60s. Um uh uh Many people understand the concept.
Very few people incorporate it and think about it in their daily lives. These are some of the things that we have to consider. So, let's talk first about the concept of market efficiency. Now, uh the the theory of market efficiency is that there are a lot of people out there and they're all numerate, intelligent, highly motivated, objective, and rational.
And they all want to accomplish the thing you do, which is to end up with more money than you started with. Given the scope of competition, how will you be the one who accomplishes the goal rather than them? Not easily uh thought out. Um now, the the what we call the strong form of the efficient market hypothesis says that due to these circumstances, all information is immediately incorporated into the price of assets.
To the extent that no one person can figure out uh which are the bargains and which are the overpricings. Now, the the really strong form is actually a little different. It says that the prices of assets as a result of this intensive uh process are always right. You can't beat them and so you can't beat the market.
I don't think that's right. I think the prices are not necessarily right. They're just the best that the consensus can do, and it's hard for anyone person to be smarter than the consensus consistently. Two different things, but the um but the bottom line on both is the same. You can't beat the market.
So, the question is, do you accept that? And that that pushes you toward a passive approach uh targeting uh average performance, low cost, low risk, highly likely to succeed to approa- to to accomplish your objective, which is being average, or will you try to be above average in the face of the very strong competition that exists?
Will you endure the costs? Will your pursuit of being above average uh permit you to be exposed to the risk of being below average? And will you engage in this pursuit of superior performance, uh which is not that likely to succeed? Uh you know, the first thing I learned at University of Chicago was that on average, most people do average before fees and below average after fees.
And the thought at the time, 1968, was, "Well, why don't they just buy one share of every stock in the S&P 500?" There was no discussion of index funds or indexation. These had yet to be invented basically by Jack Bogle at Vanguard in '74. But, you can see where the concept went, and uh today most uh mutual fund equity capital is managed passively or through indexation.
So, it it was not irrelevant. It was persuasive. Will you try to be active and be above average, or passive and be average? Do you uh have the uh people in hand who can accomplish it, or the ability to find those people and and hire them as outside managers. Um uh What happens uh at the moment when uh you know uh average performance is X and a few people publish performance which is much better.
And your bosses say, "Who's the idiot who signed on for average performance?" Um so these are questions, but it's very fundamental to the selection of an investment approach to understand and reflect the concept of market efficiency. The next is coming where is knowing where uh returns come from. Um you can have an average portfolio and do average, or you can say, "Well, this is a company that I think is going to deliver positive news which is unanticipated by others." Positive surprises.
And if you can uh figure out which ones will deliver positive surprises, you can overweight your portfolio uh toward those, and then when the news comes out and it conforms with your view, uh everybody else says, "Oh, I wish I had more." They go out and buy it. That forces the price up. You are an above average performer.
So that's the route. How uh regularly can it be accomplished? That's the question. If you think different from others, you have what we call a deviant perception, deviate perception. How often will you be right as opposed to the consensus being right and you being wrong? Um uh This is uh at the heart of things.
Again, you're up against intelligent competition. And uh you know, when I started my career at a large and bureaucratic institution, uh in the equity department, people would ask, "Well, what do you think you can make for us?" And the answer was 12%. "Well, how do you arrive at 12?" Well, the S&P 500 does 10 on average, has done at that point in time for 60 years.
So, if you can get 10 without any effort, you should be able to get, well, let's say two per 20% better with a little elbow grease. In other words, 12. But what if all the elbow grease in the world doesn't accomplish anything because the market's efficient and you can't get an advantage? Uh, then it's not only a waste of effort, but it's a waste of management fees.
Uh, that and of course management fees are the only certainty in the investing world. Now, another important question is, will you bet on macro forecasts? Everybody makes macro forecasts. And yet I don't believe that they are of any use. That's a mild exaggeration, but not so great. Um, the truth of the matter is that uh, most of the time things continue as they are.
So, a forecast of extrapolation is correct most of the time. And most people share that view. Most people expect extrapolation. Extrapolation of the recent trends, the long-term trends, is incorporated in security prices. So, when the extrapolation turns out to be correct, it's not a profitable expectation because everybody else had it as well.
It was in the price you paid. The forecasts that are very profitable are the ones that call for um, uh, radical deviation from trend, radical deviation from extrapolation. These are very significant when you make them and they're right. The trouble is they're not right very often. Because most of the time things are extrapolated.
And so we have forecasts of extrapolation which are usually correct but not profitable. And forecasts of devia- uh deviation from trend which are potentially very profitable but not often correct. I take that and analysis to mean macro forecasting doesn't work. And uh one of when we started Oaktree 29 years ago this month, uh we sat down and we wrote out the things we had been doing cuz we had the benefit of having worked together for 9 years already on average.
And uh we have a very simple investment philosophy of six points which governs everything we do. And number five says that our actions are not driven by macro forecasts. We are bottom-up investors selecting individual individual companies. Not top-down selecting uh markets and countries. So that's a different.
We think we can get an uh an advantage. By the way, where does outperformance come from? In short, it comes from having a a knowledge advantage. And you have to know something better than most other people to to outperform. Uh just trying is not going to help you if you don't know something they don't know.
So um we think we can get a knowledge advantage in studying the micro, companies, industries, and securities, not the macro, countries, markets, and rates, for example. So, you know, we borrow that from our approach. I One of my heroes is John Kenneth Galbraith who said we have two kinds of forecasters, the ones you don't know and the ones who don't know they don't know.
And I've known for decades that I don't know. So I think we have an advantage in that. And then uh that kind of sounds like forecasting macro forecasting is unavail- unavailing, but the truth is that it can be worse than neutral in its effect. It can be damaging in its effect. And I quote the American humorist and novelist Mark Twain who said, "It ain't what you don't know that gets you into trouble.
It's what you know for certain that just ain't true." No sentence that starts with I don't know but or I could be wrong but ever got anybody into trouble. The ones that get you into trouble are the ones that say, "I'm sure that such and such." Because if you believe something strongly and you bet on it heavily and you're wrong, that's how you get into big trouble.
So, will you bet on macro forecasting? This, in my opinion, is a critical and and overarching decision. I wrote a memo a year and a half ago. I think it was October of '22 entitled The Illusion of Knowledge. And it's it's basically a rant against uh macro forecasting starting with a macro for a famous quote in each section and uh I I think it's it's extremely important to decide will you or won't you start from a top-down macro forecast.
And most people do. Many people know they don't work. They do it anyway. And one of the I quote somebody in there as saying that most people couldn't get out of bed in the morning if they admitted how uncertain the the future is. Uh and so, I believe that macro forecasting, in my view, often takes the form of uh can I say organized religion.
It gives something to believe in to dispel uh the great uncertainty uh present in the world they live in. Um and uh you know, I I believe that uh very few people have the ability to do it in a superior fashion. Now, the next question is how you will you and your organization think about risk. What is risk?
Um, you know, in in all the uh formula uh mathematical work in investment business, people use variability of results as the measure of risk. I don't think that's the real risk. I think the real risk is the risk of bad outcomes. Uh, but um the trouble with my form of risk is it's not measurable. You can't measure what the probability of bad outcomes is in the future.
You can't even measure what the probability of bad outcomes was in the past. You can only measure what happened, which is a subset of what could have happened. I On the last slide, I I had a quote from Elroy Dimson, who was a professor professor at the London Business School. He said, "Risk means more things can happen than will happen." The conventional view of risk is shown in this graphic here.
You have uh return on the vertical axis, risk on the horizontal axis, and a line that slopes up to the right. And mathematicians call this positive correlation. If one goes up, the other goes up. Most practitioners take this to mean that riskier assets have higher returns. There's something wrong with that formulation.
If riskier assets could be counted on to have higher returns, by definition, they wouldn't be risky. So, the the way I look at it is more like this. I take these little bell-shaped curves. I superimpose them on the same line. It's the same underlying line. But now, as you move from left to right, not only does the expected return increase, but the range of possible outcomes gets wider, and the bad outcomes become worse.
That, I think, is risk. That is what people should concern themselves, not the possibility that their return streams will be lumpy. Buffett said, "I'd rather have a lumpy 15 than a smooth 12." And uh I think that makes a lot of sense. So, I think the most important job of the professional investor is to manage risk.
And we have to assess it and manage it even though we do it from a bottom-up micro level, not top-down. But I think that you have to constantly work with risk, but you have to never assume as Mark Twain cautions that you know it for certain. We never know what is going to happen. And the events show that in the world.
We never know how the market will react to what happens in the short run. And if you want proof of those two statements, take a look at the US presidential election of 2016. Everybody was confident of two things. Hillary would win, 80% probable, and if by some quirk of fate Trump won, the market would collapse.
Instead, Trump won and the market went up for 14 months. 30%. So, we don't know and we don't ever assume that our intellectual process permits us to get the risk under control. And then lastly, you have to accept that it's very hard to have both superior returns and low risk. A high degree of safety.
Taking Going for superior returns means means taking some risk. You have to either bet on riskier companies, riskier propositions, things that are considered unpopular and out of favor, and things that if you're wrong will result in your being below average. Yet, and you have to figure out for yourself what your approach is.
That I'm a tennis player and last summer while watching the tennis tournaments, especially Wimbledon, Um, I wrote a memo entitled Fewer Losers or More Winners. You have to have an approach, in my opinion, which will organize your pursuit of superior returns, and there's really two ways to do it. You have to either have more of the things that do above average or less than the less of the things that do below average.
There is no alternative. Of course, you could do both. I think for most people, given their mentality, one or the other is more likely. The the the conservative person can, in theory, have fewer of the things that do poorly. The skilled aggressive person can, in theory, have more of the things that do well.
Each person has to understand their own mentality, what's possible for them, and thus their pursuit will what their pursuit will be. And these things, in my opinion, taken together, are examples of the elements that combine to produce an investment philosophy. And we've done it at Oaktree. Everybody knows where we stand. Everybody is pulling together in the same direction. Thank you very much.
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