📖Howard Marks
Stay Within Your Expertise
Stay within your circle of expertise.
The biggest mistakes come from venturing outside your area of expertise. Stick to what you know and do it well.
🏠 Everyday Analogy
📖 Core Interpretation
Howard Marks advocates a repeatable process: define criteria, execute consistently, and review decisions against evidence. Process quality drives outcome consistency.
💎 Key Insight：Knowing your limits prevents costly errors.
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❓ Why It Matters
Without process, there is no reliable feedback loop. Structured execution and review improve decision quality over time.
🎯 How to Practice
Run a decision loop of research, thesis, execution, and post-mortem; document assumptions and update playbooks with evidence, not hindsight bias.
⚠️ Common Pitfalls
Having opinions without execution criteria
Reviewing outcomes but not decisions
Abandoning rules during volatility spikes
📚 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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