Howard Marks: Cash is a BAD INVESTMENT

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01. Howard marks a seasoned investment Guru known for his astute understanding of market dynamics with over two decades of insightful experience Marx has navigated the complex world of Finance with unparalleled wisdom given that you now you know that oak tree is now 120 billion and I understand you know not all pools of money are the same realistically given the size of that tanker how much time would you really need to meaningfully adjust the portfolio well first of all I appreciate your use of the word adjust because a lot of people who are less astute than you would say how much would how how long would it take to go to cash and the answer is going to cash we don't go to cash and go into Cash almost under almost all circumstances is stupid because uh among other things when you go to cash you have to be right right away because if you go to cash and and prices start keep going up for a while as they invariably will and and and returns continue to be positive you fall so far behind by being in cash that you may even jeopardize your business to stay in business and you'll certainly jeopardize a lot of your client accounts so uh but you use the term adjust portfolios and you know we if you read the book as I hope you will you'll see that we don't think about when is the turn going to come or when is the bottom going to come and in fact when is one of the words I reject in our business because we sometimes have an idea what's going to happen and we never know when Howard marks emphasizes the importance of not attempting to time the market and highlights that going to cash can be detrimental due to potential missed opportunities instead He suggests suggesting portfolios as needed without trying to predict Market terms the turns in that matter you see the market is a little bit volatile I mean the economy is a little bit volatility sometimes it's up three and sometimes it's up one and sometimes it's down one company profits are more volatile because companies are leveraged operating in financial but market prices do this because they're driven by people by people's Emotion by what we call human nature and um so to to figure out when things are going to happen you would have to be able to predict emotion which is impossible and so we don't ever think about when at Oak Tree we think and and one of one of my mottos is we never know where we're going but we're sure as hell ought to know where we are what's going on around us what does that imply about the future and if we conclude that the present developments justify a more defensive position then there's no time like the president so we start and we do what we can and hopefully we do enough before the stuff hits the fan and you talked about you know sort of the pain associated with going to cash and then if you engage in abstention and the market keeps going up then obviously you underperform and let's point out the most important one of the most important attitudes in investing that being too far ahead of your time is indistinguishable from being wrong absolutely early is wrong sure um but along those lines um has that changed over the course of the last you know again call it 25 years no no because in order to predict and work toward and game for a relative return now now not only do you have to know what's going to happen but you have to know how other people are going to behave in response to what's going to happen and you have to set your game for that so again it sounds maybe impractical all we try to do is the right thing if if if if prices are too high if risks are too high if interest rates are too low then we if if the if the economy seems to be getting old then we try to reduce our risk in the ever-changing landscape of investment Howard marks stands as a steadfast advocate of making informed decisions rather than predicting the unpredictable his philosophy emphasizes adapting portfolios to prevailing circumstances rather than feudally seeking the perfect timing reinforcing the Timeless truth that being too early is often akin to being wrong