Howard Marks

It's easy to diverge from the thinking of the consensus, not always easy to diverge correctly, but that's what a superior investor has to do.

You might call it second level thinking, variant perception, knowledge advantage, insight, context, judgment, but it's an intangible.

People say to me, can you teach somebody to be a second level thinker?

And I said, I don't know.

It's kind of like asking the basketball coach to coach height.

All his efforts won't make his players any taller.

Some people get it, some don't.

You know, back when I was an analyst in the early 70s, I followed Xerox.

And one of the portfolio managers said to me, who's the best Wall Street analyst on Xerox?

Sell side.

And I said, well, the one who agrees with me most is so-and-so.

Isn't that our definition of who's the smartest?

No, but the truth is we look for smart people.

We look for what Nancy, my wife, calls smart eyes, exceptional people who get things maybe a little better than others, who understand what's important and what's not.

who can go beyond the readily available quantitative information.

And look, it's very simple.

Like with oil, the cure for low oil prices is low oil prices.

Some people get that intuitively.

Some people don't understand it.

You have to get the people who get it intuitively.