market folly

Oaktree Capital's chairman Howard Marks is out with his latest memo entitled, "Getting Lucky."  It's an interesting missive in which he delves into the role of luck in investing.

Marks writes, "Investment success isn't just a question of whether the investor put together the 'right' portfolio, but also whether it encountered a beneficial environment.  Thus being successful requires a significant degree of luck.  No one gets it right every time.  (That's why even the best investors diversify, hedge and/or limit their use of leverage.)  But the skillful investor is right more often, over a long period of time, than an assumption of randomness would permit.  We say about such investors, 'it can't be luck.'"

Remember, this is a letter that even Warren Buffett regularly reads so you're in good company.

Embedded below is Howard Marks' "Getting Lucky" memo:




You can download a .pdf copy here.

If you missed it, be sure to check out Marks' memo from last month: The Race Is On.