“You can’t predict, [but] you can prepare.” Howard Marks

Howard Marks is a renowned investor and co-founder of Oaktree Capital Management, a leading investment firm specializing in alternative investments. He is widely respected for his deep understanding of market cycles, risk management, and value investing. Marks is also known for his insightful investment memos, sharing his views on market conditions, investment strategies, and economic trends. His writings and teachings have made him a highly influential figure in finance and investment.

Howard Marks' statement, "You can't predict, [but] you can prepare," emphasizes the inherent uncertainty in investing and the importance of being ready for various possible outcomes. Here's a breakdown of what he means:

1. Unpredictability of Markets: Marks acknowledges that financial markets and economic conditions are inherently unpredictable. Despite thorough analysis and forecasting, it's only possible to foresee some future events and their impacts on investments.
2. Importance of Preparation: Since prediction is unreliable, the focus should be on preparation. This involves having a robust investment strategy, risk management, and flexibility to adapt to changing conditions.
3. Risk Management: Preparation includes understanding and managing risks. Investors should diversify their portfolios, maintain liquidity, and be ready to take advantage of opportunities or mitigate losses when unexpected events occur.
4. Long-term Perspective: Preparing also means having a long-term perspective rather than trying to time the market. Investors should be patient and disciplined, sticking to their investment principles even during volatile periods.

By highlighting preparation over prediction, Marks advises investors to build resilience and adaptability into their investment approach, ensuring they can navigate uncertainty effectively.

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