📖Howard Marks
Quality vs Price Balance
Balance quality assessment with price discipline.
The biggest investing errors come not from factors that are informational or analytical, but from those that are psychological. Buying quality without regard to price is as dangerous as buying price without regard to quality.
🏠 Everyday Analogy
📖 Core Interpretation
In Quality vs Price Balance, Howard Marks focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves.
💎 Key Insight：Neither quality nor price alone determines investment success.
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❓ Why It Matters
Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong.
🎯 How to Practice
Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside.
⚠️ Common Pitfalls
Confusing a low price with true cheapness
Using one metric without business context
Overly optimistic assumptions that erase margin of safety
📚 Case Studies
1
Avoiding Dot-Com Bubble Excess (2000)
Marks emphasized valuation discipline and skepticism toward profitless tech stocks, steering Oaktree away from speculative internet names at bubble peak.
✨ Outcome：Avoided large losses when the bubble burst, preserving capital and enabling later investment in discounted quality companies.
2
Pre-Crisis Credit Caution (2007)
Seeing aggressive lending, weak covenants, and tight spreads, Marks reduced exposure to risky credit and raised cash before the 2008 global financial crisis.
✨ Outcome：Portfolio suffered less drawdown than peers, retained liquidity, and deployed capital into distressed debt at attractive returns post-crisis.
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