2 Value Investor Perspectives Worth Reading (Howard Marks & Jean Marie Eveillard)

Here are two letters by famous investors that I recommend reading. Both of these papers have been circulating the value investing community and were brought to my attention by Joe Koster.

1. Jean Marie Eveillard’s View On The Economic Crisis (Excerpt Below) – Click Here To Read The Full Paper (As pdf)

Now, this financial crisis was, not to use Nassim Taleb’s metaphor, not a black swan. Nassim Taleb wrote a book, the title of which is The Black Swan, by which he meant something that was unpredictable. Many hundreds of years ago in Europe people believed that there were only white swans because they had never seen a black swan until somebody went to Australia, came back to Europe and said, “Hey, I saw a black swan.” In other words, Nassim Taleb is saying that the mere fact that Europeans had never seen a black swan did not mean necessarily that there was no such thing as a black swan. And yet, almost all professional investors did not see the crisis coming, even though as I said before, it was not an unpredictable event. Because they didn’t see the crisis coming, they said, “Hey, nobody predicted it” or “The only ones who predicted it were people who for decades have been

2. Howard Marks -So Much That’s False and Nutty [in finance] (Excerpt Below) – Click Here To Read The Full Paper (as pdf)

There is so much that’s false and nutty in modern investing practice and modern investment banking.  If you just reduced the nonsense, that’s a goal you should reasonably hope for.  As we look back at the causes of the crisis approaching its second anniversary – and ahead to how investors might conduct themselves better in the future – Buffett’s simple, homespun advice holds the key, as usual.  I agree that investing practice went off the rails in several fundamental ways.  Perhaps this memo can help get it back on.