From $10 to $100… Then Back to $25: Howard Marks’ Early Wake-Up Call | Talks at GS 2022

[Transcript]

KATIE KOCH: I want to just segue to talk about mistakes. So, obviously you've gotten a lot right and we've highlighted all of that. You're also—a one liner, which you're clearly a fan of, I just wanted to share here, "Experience is what you get when you don't get what you want." When have you ever gotten what you didn't want? And what'd that look like for you?

HOWARD MARKS: Well, when I was starting in my career, I'll never forget that I met this guy, and he says, "We're bringing out two—two new stocks tomorrow. They're both little tech stocks." And he says, "And they're both going to double in the first day." I said, "Good, I'll take 100 shares of each." And I called him up the next day. $10 stock. So, I bet 2,000.

So, I called him the next day. I said, "What happened?" He said, "Yeah, they both doubled." I said, "Good. Sell one." He said, "What do you mean? They're going to the moon." I said, "Sell one, and I'll take my money out and we'll let the other ride."

So, I sold one. The other one—40, 60, 80, $100. Stopped trading. And there was something crooked—and when it reopened at 25 or something. You know?

So, I—I learned that there are no sure things. And if something—you know? One of the important parts of being an investor is to be a skeptic. And you know, if somebody comes to you and says, "I've been managing money for 25 years. I've made 11% a year. I've never had a down month," your job is to say, "That's too good to be true, Mr. Madoff." Right? But very few people did.

And so, I learned the importance of skepticism. And the great thing in life is to learn your lessons inexpensively, as I did.

Source: https://www.youtube.com/watch?v=wkJXQ46ma8I&ab_channel=GoldmanSachs

 

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