Words to Start the Week (April 22, 2025)
Nuggets from past notes
“A company either generates cash or it doesn't, regardless of how compelling the story. Financial statements reveal truths that even the most charismatic management teams cannot talk their way around.”
“There’s an old story about a group of blind men walking down the road in India who come upon an elephant. Each one touches a different part of the elephant – the trunk, the leg, the tail or the ear – and comes up with a different explanation of what he’d encountered – a tree, a reed, a palm leaf – based on the small part to which he was exposed. We are those blind men. Even if we have a good understanding of the events we witness, we don’t easily gain the overall view needed to put them together. Up to the time we see the whole in action, our knowledge is limited to the parts we’ve touched…. Up close, the blind man may mistake the elephant’s leg for a tree – and the shortsighted investor may think an uptrend (or a downtrend) will go on forever. But if we step back and view the long sweep of history, we should be able to bear in mind that the long-term cycle repeats and understand where we stand in it.”
- Howard Marks (The Long View)
“Learn from those who have more years of experience. You have no idea how many hours a day I spent on the phone — like a sponge —learning about finance from those with 15, 20, 25, 30 years of experience.”
“You don’t choose your passions—your passions choose you. And you’ll notice your passions because they’ll be the things you read about when nobody is watching.”
“Live within your income and save so you can invest. Learn what you need to learn. Stay rational and just allocate your capital to its highest and best uses. If you do those things, you are almost certain to do well. And if you don’t do them, you’re going to need a lot of luck. And you don’t want to need a lot of luck. You want to go into a game where you’re very likely to win without having any unusual luck.”