Warren Buffett V/s. Howard Marks & Cyprus

March 21, 2013

Warren Buffett V/s. Howard Marks & Cyprus

Greetings from Hitesh! In last article we discussed the plight of Mr.Rakesh in current market and we had given you 31 investment ideas for your analysis. Looking at his loss of around Rs.1500 Crs., many had suggested to go for a Bank Deposits instead of Shares.

So, Today I have taken the discussion on Equity V/s. Debt and to represent each group, I have taken two leaders of each group. Both have been in their game longer than I’ve been alive.

Mr.Warren Buffett:-

He is a hero for Equity group. He has over 70 years of impeccable track record (he started investing at 11 years). He represents Berkshire Group which has a market cap of USD 252 bln. He himself has a net worth of USD 53.5 bln as per the latest Frobes list.   

Mr.Howard Marks:-

He is co-founder and chairman of Oaktree Capital Management. His company manages USD 77 billion of funds, mainly in on the rough-and-tumble world of distressed corporate debt. He has also got a track record of double digit return in DEBT. His personal net worth is USD 1.4 Bln.

Cyprus:-

It’s a European island nation with population of around 1 million. Recently the country has come out with a proposal to TAX the deposits in the bank to partly fund a bailout. Currently all the banks are closed there and they will open in Next week when they may come out with revised proposals.

We have following points to bring to your Notice:-

In uncertain and unpredictable world scenario, Mr.Warren is making money from Stocks, Mr.Howard Marks is making money from Debt. There is nothing sure shot in this world. As Mr. Howard said “Risk Control is the best way to loss avoidance, Risk Avoidance is likely to lead to RETURN AVOIDANCE, also.”

Those who thought that by investing in Bank Deposits they are avoiding total risk……and getting only gain……they must keep the example of Cyprus in Mind. If you consider Cyprus is a non-possibility, do not be happy, Inflation will do it without your knowledge.

My Personal Call:-

There are 3 important elements of success in any area…..they are Vision, Guts and Skill. We can support you with Vision and Skill, provided you show the guts.

As Mr.Marks has said…

“When things are going well and prices are high, investors rush to buy, forgetting all prudence. Then when there’s chaos all around and assets are on the bargain counter, they lose all the willingness to bear risk and rush to sell…..this is the real time to buy.”

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Live With Passion, Invest with Passion.

Hitesh Parikh.