Howard Marks - How To Handle The Market Crash

With all the uncertainty around COVID 19 and fear, nobody really knows what next is going to happen. There is pessimism all across the board. However, we'll overcome the virus, through a combination of:

Medicines
Vaccines
Social distancing
Masks
Testing
Isolation
Herd immunity, etc.

Patience is the hardest virtue to master. Given the virus being contained, businesses coming back to normalcy will not happen overnight. Do not buy currently if you do not have the patience to see this through. Maybe this is the time to relook at your financial plan and asset allocation.

History teaches us many things. The only consistency is just how inconsistent it is from one decade to the next. World economies have seen it all and come back from the brink every time.

Just for your reference below are the Wikipedia links on the list of stock market crashes and bear markets:

Global Stock Market Crash

India Stock Market Crash

Amidst all these bull and bear markets India's Sensex made returns of whooping ~15% per annum for the last 41 years i.e. 294 times money which has been made as on 31st March 2020.

Date	Value
01-Apr-79 - (Start date)	100
31-Mar-20	29,468
Return per annum for the last 41 years	~15%

Legendary investor Howard Marks's approach to investing when people started talking end of the world in 2008-2009.

The only thing we have to fear is fear itself.

Howard Marks asked two questions:

Will the financial world end? - It doesn't end.

Should we buy or not? - If we invest and financial markets end, it doesn't matter anyway. But, if it doesn't end, we didn't do our job.

The analysis was rather simple that we'd to buy. It almost didn't matter what you did as long as you bought. It was a point in time where you don't need conservatism, caution, risk control, discipline, patience, selectivity. All that you need is money and nerve to invest.

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Thank you very much for your time!

With respect,

Aaditya Chhajed

CA, CFA(US) All Levels Cleared, MCom

chhajedaaditya@gmail.com

+91-9404055222.

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Disclaimers :

Investors should seek the advice of their financial advisor prior to making any investment decision based on this report or for any necessary explanation of its contents. Future estimates mentioned herein are personal opinions and views of the author. This post is not a recommendation to buy or sell securities.

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Aaditya Chhajed, CA, CFA

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