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Printed every Howard Marks letter
Sudden cash
At 28 or 29, he made more than a million dollars for the first time and realized he did not know what to do with it. He had no background in investing, but he knew that he did not know, and that awareness was the one thing he had going for him. The question he started from was how people actually make money.
The reading
He printed every Berkshire Hathaway letter and every Howard Marks letter. Whenever a concept did not make sense, he stopped and highlighted it, and he did not move on until he had mastered it. He read five or six hours a day, and for about a year, figuring out what to do with the money was his full-time job.
Making it his own
Then he studied John Malone and the other outsiders. Each of those investors looks at the world a little differently, and he resonated with a lot of what each of them did, but not all of it. You have to study the people who've done it before you in order to make your own music, so he took bits and pieces of Berkshire, Howard Marks, and the entrepreneurial spirit of Malone and Teledyne's Henry Singleton, and made them his own.
Why do investors read Berkshire's letters?
Warren Buffett has written to Berkshire Hathaway shareholders every year since taking control in 1965, in plain language about mistakes as well as successes. The company posts the letters going back to 1977 on its website. Their candor and explanations of reasoning have made them a popular text for self-taught investors. In 1997, Lawrence Cunningham assembled excerpts by topic in The Essays of Warren Buffett.
How did Howard Marks's memos become famous?
Howard Marks, who co-founded Oaktree Capital Management in 1995, has been writing investment memos since 1990. They discuss market cycles, risk, and the psychology of investors, and Oaktree posts them publicly. Many of the ideas were collected in his 2011 book The Most Important Thing.
Why do investors study Teledyne's Henry Singleton?
William Thorndike's 2012 book The Outsiders profiles eight chief executives, John Malone and Henry Singleton among them, who ran their companies in unconventional ways and beat the market. Singleton's Teledyne bought back a large share of its own stock over the 1970s, at a time when few companies did. Malone built the cable company TCI through aggressive use of debt and acquisitions. Thorndike's subtitle calls their approach radically rational.
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