One of the important things that I remember them drilling into our heads in business school was about how to write a business memo. This might not seem like a big deal, but it is. Emails, decks, and recommendations are ubiquitous in business.

I remember three main points.

One, use clear and concise writing. If you can use fewer words, do that. Two, be decisive. In fact, they used to tell us that being decisively wrong was always better than being vaguely correct. And three, be as quantitative as possible.

If you can replace words with numbers, you should do that. For example, instead of saying that something recently increased significantly, it is far more effective to say that something increased by 27% over the last 18 days.

I was reminded of this earlier today when I came across this:

Reading Howard Marks' investment memos is up there with reading Paul Graham's essays. You just need to do it. Howard's latest is about "taking the temperature" of the market and I think you'll find the lessons invaluable for everything from equities to residential real estate.

Here's an excerpt that I liked:

We don’t say, “It’s cheap today, but it’ll be cheaper in six months, so we’ll wait.” If it’s cheap, we buy. If it gets cheaper and we conclude the thesis is still intact, we buy more. We’re much more afraid of missing a bargain-priced opportunity than we are of starting to buy a good thing too early. No one really knows whether something will get cheaper in the days and weeks ahead – that’s a matter of predicting investor psychology, which is somewhere between challenging and impossible. We feel we’re much more likely to correctly gauge the value of individual assets.

These are investing words to live by. Avoid your own emotionality and value the asset. If it's not cheap, don't buy it. If it's cheap, buy it. Then take a long-term view. It all sounds simple enough, but it's clearly not so easy. And that's why we have extreme highs and extreme lows in the market.

Eighteen months ago, everyone wanted to buy residential real estate. Today, prices are lower, but fewer people want to buy residential real estate. Part of this is obviously because of interest rates. But part of it is also just because of emotion.

I know that this is supposed to be a blog about building cities, but it's also a blog about real estate and I have heard that people sometimes do things like invest in real estate. So here is a terrific memo by Howard Marks (of Oaktree Capital Management) about when to sell assets (and when not to sell assets). His overarching argument is that, most of the time, staying invested is ultimately the most important thing. But that it can be difficult to do.

Here's an excerpt:

When you find an investment with the potential to compound over a long period, one of the hardest things is to be patient and maintain your position as long as doing so is warranted based on the prospective return and risk. Investors can easily be moved to sell by news, emotion, the fact that they’ve made a lot of money to date, or the excitement of a new, seemingly more promising idea.

Howard is talking about the stock market and his words of advice are particularly important in that context given how easy it is to be a "trader." I can, so maybe I should. But the same lessons hold true for real estate, even though it is a less liquid asset. A lot of wealth has been generated over the years by those who simply bought well and held for the long term. One good decision and patience can go a long way.