Investors' real job

Here's a statement many investors will find provocative: Making money is not an investment manager's real job. Anyone can make money because, most of the time, markets go up. Investors and investment managers' real job is risk control. This was what Howard Marks said at a conference a few years ago. Marks, whom I have quoted earlier in these pages, is a successful fund manager and a respected writer on investing. His widely-read memos are so valued that even Warren Buffett has said that he considers them essential reading. Incidentally, in the same speech, Marks also said, "Our business is full of people who got famous by being right once in a row," but I'll write about that some other time. What's more, what is true for investment managers is just as true for individual investors. The current state of all equity-based investments in India is a perfect example. Pretty