Howard Marks : I want to say emphatically, Oliver, there are more than one way to skin the cat. I talk about the things you can’t do. You can’t make macro forecasts repeatedly successfully, you can’t trade algorithmically, so then what’s Stan Druckenmiller doing? What’s Renaissance doing? All the things I say you can’t do, there are people who’ve done them extremely successfully. Trade commodities, who’s Paul Tudor Jones? There are lots of ways to be successful. I always talk about the importance of risk-controlled investing. There are high risk investors who’ve been successful. I think the key is 1) to have an approach, well thought out, built out hopefully over some years or decades. Hold it strongly. As the memo says, be willing and able to hold through the periods when it’s not working because nothing works in every market, nothing works in every state of the cycle and nothing works every year. Even if you’re in an up cycle, it should work, it didn’t work.
I was struck by Barton Biggs’ book, Hedgehogging. He talks about outstanding investors who had terrible periods in the doghouse. If you hold a philosophy strongly and an approach, no approach is going to work all the time and the more strongly you hole your approach, that means the more out of favor you’re going to be in certain times, so it’s extremely important to hold that. A well thought out, valid approach that you’re committed to and can stay with, I think you have to have an approach that fits your personality. I was lucky in ’78, I was asked to start up some bond funds in convertibles and high yield. I’m a conservative investor, it fit me very well to be investing in fixed income. If they would have said to me, “We want you to go out to Silicon Valley and start a venture capital fund. We want you to find Google when it gets invented,” I probably couldn’t have because I’m not a futurist and I’m not a dreamer. I’m probably better at sealing off the downside than finding the upside. Like they say in football, “Is he playing within himself? Is he doing the things he can do?” I think it’s extremely important for an investor, so I think the people we’re talking about are people who have these approaches, strongly held. I think it helps to be highly intelligent. Buffett says, “If you have a 165 IQ, sell 30 points because you don’t need them.” I don’t think that’s true. I think that high intelligence is very important and I think the people that I’ve mentioned are extremely intelligent. Those are some of the criteria for success.