📖Howard Marks
Selectivity Over Volume
Quality of stock picks matters more than quantity.
Be highly selective. It's better to make a few excellent investments than many mediocre ones. The quality of your picks matters more than the quantity.
🏠 Everyday Analogy
📖 Core Interpretation
Howard Marks emphasizes durable business quality over short-term noise. A strong model, real competitive edge, and disciplined capital allocation matter more than quarterly excitement.
💎 Key Insight：Selectivity leads to superior portfolio quality.
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❓ Why It Matters
Without business-quality filters, investors drift toward stories rather than economics. Durable cash generation is what supports long-term valuation.
🎯 How to Practice
Use a checklist covering moat, management, unit economics, and capital allocation; track long-term cash generation instead of quarter-to-quarter noise.
⚠️ Common Pitfalls
Buying narratives instead of cash-generating economics
Overreacting to short-term operating noise
Ignoring management quality and capital allocation
📚 Case Studies
1
Subprime Mortgage Crisis (2007)
Investors relied on historical housing data and ratings, underestimating correlations and nationwide price declines. Structured products hid real credit risk.
✨ Outcome：Massive write-downs and market crash; investors learned to question models, ratings, and their own ignorance about tail risks.
2
Dot-Com Bubble Valuation Discipline (2000)
Tech stocks soared on eyeballs, not earnings. First-level thinkers chased momentum. Second-level analysis flagged unsustainable valuations and weak business models.
✨ Outcome：Avoided overpriced dot-coms, held quality cash-generative firms, and preserved capital when the bubble burst.
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