Marks uses a probability metaphor: investment outcomes are like drawing one ticket from many possible outcomes in a bowl.
“the outcome of pulling a ticket from the bowl, the outcome of which investment performance will occur, never amounts to one ticket picked from among many.”
Marks says even when he thinks he is right on market calls he assumes probability is only eighty-twenty.
“But, you know, in the investment business, even when you're even when you think you're right, you shouldn't assume that it's more than $80.20.”
Crisis psychology collapses the distinction between what's possible and what's probable.
“During the crisis, any optimistic scenario was dismissed as naive. Everything bad seemed possible, and therefore probable. The distinction between possibility and probability vanished. That’s the real psychological poison in markets.”