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The future is unknowable

I am sure many of you are getting tired of the news. I know I am. But it turns out that when you’re in a global pandemic and you spend the entirety of your day looking at Zoom — while fidgeting your leg, I might add — there’s only so much else you can talk and write about.

One of the more interesting things you could read is Howard Marks’ memos. Howard is the co-founder of Oaktree Capital Management and, from what I can tell, he’s been writing since 1990. Some years it’s an annual memo and some years — like this year — he writes a bunch more. His most recent is regarding, “Knowledge of the Future.”

If I had to summarize it: The future is unknowable and none of us can say with any certainty what the next quarter or the next year is going to look like. In Howard’s words: “These days everyone has the same data regarding the present and the same ignorance regarding the future.”

Most of the time, he explains, we simply extrapolate from the past and then apply our own biases to come up with a prediction. Howard describes himself as more of a worrier, whereas I would describe myself as more of an optimist. I believe, to a certain extent, in creating self-fulfilling prophecies.

Notwithstanding our inability to predict the future (which isn’t a new phenomenon), I think it’s important to have opinions and take positions. Any decision is better than no decision, right?

For a full archive of Howard Marks’ memos, click here.

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