How to Protect Your Portfolio from Big Losses | Howard Marks | Stocks
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Ask me anything about this video:
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Howard Marks mentions the following risks beyond the primary risk of losing money:
- The risk of falling short of one's financial goals or needs.
- The risk of being forced to sell assets at a loss due to downward market fluctuations.
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According to Howard Marks, the primary source of risk in the stock market is not the market's components themselves (stocks, exchanges, or companies), but rather the behavior of investors. Prudent investor behavior mitigates risk, while panicked selling increases it.
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The key takeaway from Warren Buffett's quote is that the less prudent other investors behave, the more prudent one must be in managing one's own investments. Essentially, it emphasizes the importance of counter-cyclical investing – acting cautiously when others are reckless.