Latest memo from Howard Marks: Something of Value

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not related to Howard but just what my thinking process and had experienced.

Many years ago, I was hosting a dinner for my Japanese Colleagues that we talked about the zig-sawing stock market.  I says something like Pendulum aka what's go down must go up.

Well, I think I'm not experience enough (at that time). My friend show me the following picture - Japanese stock market chart:
[Image: Japan-Nikkei-Return-Since-1980.png]

From 1980 to 2015 - nope - didn't recover.

What about now? Does it recovered? 
For those who wanted to know, check today:

What ever go up will go down?
What ever go down will go up?

I read a lot of financial blogs and a very common reflection is:
1) Sell to early
2) Sell to late

For 1), the stock was going up and then beyond the valuation metrics and so the valuebuddy will sell. Guess what, they always regret because the stock that they sold usually zoom to the moon.

For 2), exactly opposite, our valuebddy will hold on dearly to the stock until it zoom to the moon and still holding. Then, needless to say, the stock dropped back to the normal valuation price. What a waste!  Undecided

This is very common - for a simple reason - none of us could accurately predict the peak of a stock price - nobody could.

I like what Tan Chong Koay says:
Trying to buy a share at the lowest price and sell at the highest is unrealistic.

Very few, if not none, knows the lowest point. Buying near the lows is the best you can do.

Gratitude!  Heart

Wish our valuebuddies a fruitful and fun investing journey ahead.
Some insights from Howard Marks. The last section talks about the US CRE (commercial real estate) and it seems like everyone is waiting for the US CRE "train wreck". Blackstone has even closed a 30.4billion global real estate PE fund last week, waiting to exploit the coming train wreck.

Since markets are reflexive, there will probably not be as much opportunities as everyone will like in the coming years. But banks are going to be cautious about refinancing (although they don't have much choices), bargaining power is with the tenants due to customer behavior changes, and interest rates will probably stay higher for some time - all these surely doesn't sound good for the locally listed US office REITs....

Lessons from Silicon Valley Bank

Combine developments like these with the reality that (a) interest rates are no longer declining or near zero; (b) the Fed can’t be as accommodative as it was in the last few crises, because of today’s elevated inflation; and © negative developments are popping up in portfolios, and I think the case made in my previous memo, Sea Change (December 2022), has been bolstered.

The easy-money environment of the last few years has been blamed for – among other things – the difficulties at SVB and its peers. Their failure is likely to bring stricter scrutiny to banking, meaning things are unlikely to be as easy in the period ahead. And to paraphrase Warren Buffett, now that the tide has gone out a bit, we’ve caught a glimpse of some who were swimming naked near shore. The remaining questions are, how many more are out there, and will the tide go out far enough to expose them?

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