Howard Marks

And you can read them all one at a time in order.

And the only thing I can promise you is the price is right because they're all free.

When did you start writing the memos?

In 1990.

That's a good story, by the way.

You should tell that one.

Yeah, I'll tell that story.

And it bears a little bit on what we're talking about here.

But in 1990, I went to visit a client in the Midwest who told me that the pension fund he ran for 14 years was between the 27th percentile and the 47th percentile every year for 14 years.

So if you say to somebody, well, for 14 years, it ranged each year between 27 and 47, what do you think they did for the whole period?

You would say, well, probably about 37, right?

And the answer is fourth.

That pension fund was in the fourth percentile of all pension funds for the 14 years.

Why?

Because some of the other people shoot themselves in the foot.

So that was a lesson in consistency.

And then right around the same time, there was a deep value firm in New York and they invested very heavily in the banks that year and the banks did horribly.

So the president comes out and he says, well, obviously, if you want to be in the top 5% of money managers, you have to be willing to be in the bottom 5%.

And the dichotomy between the implications of those two stories really caused me to write the first memo, the juxtaposition.

My clients don't hire me to be in the top 5%.