#1
Stay Within Your Expertise
"The biggest mistakes come from venturing outside your area of expertise. Stick to what you know and do it well."
Stay within your circle of expertise.
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Howard Marks⭕ Circle of Competence
Howard Marks's Circle of Competence Rules
Howard Stanley Marks (born April 23, 1946) is an American investor and writer. He is the co-founder and co-chairman of Oaktree Capital Management, one of the world's largest investors in distressed securities with over $150 billion in assets under management. Marks is renowned for his insightful memos to clients, which have been published since 1990 and are widely read in...
3 principles·Circle of Competence
3 Key Circle of Competence Principles
#2
Know the Limits of Knowledge
"The most important thing is knowing what you don't know. Acknowledging your ignorance is the beginning of wisdom in investing."
Acknowledge what you don't know.
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Knowing What You Don't Know
"The greatest investing advantage is humility - knowing what you don't know and acting accordingly."
Knowing the limits of your knowledge creates competitive advantage
Read Full Analysis →Frequently Asked Questions
What are Howard Marks's key circle of competence principles?
Howard Marks has 3 key principles on circle of competence. The most important one is "Stay Within Your Expertise" — The biggest mistakes come from venturing outside your area of expertise.
How does Howard Marks apply circle of competence in practice?
Howard Marks applies circle of competence through several key principles including "Stay Within Your Expertise" and "Know the Limits of Knowledge". These principles guide practical investment decisions and have been tested across decades of market cycles.
What makes Howard Marks's approach to circle of competence unique?
Howard Marks's approach to circle of competence is distinguished by a focus on long-term thinking and fundamental analysis. With 3 specific principles in this area, Howard Marks provides a comprehensive framework that investors at any level can study and apply to improve their decision-making.
