Howard Marks

A private investment company located in Geelong, Victoria

Safe as Houses?

“Australian house prices will fall 40%” said Steven Keen. So confident in his prediction – was the economist from Western Sydney –he agreed to a bet. The opponent? An interest rate strategist from Macquarie, named Rory Robertson. The stakes? An unaided walk from Parliament House to the summit of Mt Kosciusko. It was September 2008. Lehman Brothers had just failed and the world was at panic stations. Australian house prices would dip 5.5 percent, but then begin their decade-long march…

A Wealth Management Playbook

There is no such thing as one superior investment strategy – neither active nor passive. But, this begs the question: how, then, should an investor to choose between them? In short, it depends on your circle of competency. Up now is part three of a four-part dissertation on active vs. passive. In it, I outline a framework for choosing an investment method that is best suited to your needs and abilities. It begins with a brief survey of asset classes,…

Are Index Funds Creating a Bubble?

A seismic shift of capital - from active to passive - has eviscerated financial markets. The trend is no more obvious than in a widespread uptake of Exchange Traded Funds (ETF). The topic for consideration is whether ETFs make financial markets more or less efficient. Do they improve our ability to access market returns, or encourage undue risky behaviour? Perhaps, even, a new financial bubble? To jump to the punch line, ETFs are less a cause of irrational exuberance, than a…

A Dynamic Theory of Financial Markets

How often have you asked yourself: is it worth me holding onto these Telstra shares my parents gave me? Is there a better option to earning such a paltry return on my savings? Does anyone know a good fund manager? Or what the hell are people talking about when they refer to “index funds” and “ETFs”? These questions are not only common, but reflect a deeper tension in wealth management. Whether you should be an active or passive manager of…