Never Say Never Again

I really liked this quote from Howard Marks in today’s Barron’s:

One of the great lessons [of investing] is beware of platitudes, such as "There has never been a national decline in home prices." If you believe that there has never been a national decline in home prices and that there never could be, then you bid home prices up to levels that don’t allow for the risk of widespread losses, because you concluded it could never happen. Then the fact that they are at those new high prices introduces, in itself, the risk of a national home-price decline.

So the actions of people relying on history change history, and that is what people lose track of.


  1. Pin my tail and call me a dokeny, that really helped.