Marks advocates cutting off the bottom tail rather than shooting for the top tail to achieve best long-term performance.
“Approach is very simple, cut off the bottom tail. That's what this guy in the Midwest did.”
Marks quotes Buffett: when others act less prudently, we must act more prudently in our own affairs.
“Buffett says most things best. He says, the less prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own affairs.”
Marks explains crisis investing requires pre-raised capital, nerve to deploy it, and clean portfolio to act.
“Nobody will give you money to invest during a crisis. We had pre raised it. And you have to have the nerve to spend it.”
Marks says investors must prepare for less optimistic times even while optimism drives markets higher.
“And part of that means with everything you do, some part of your body has to be saying, yes, but how do we prepare for less optimistic times?”