It is no secret that Wall Street has , shall we say, exposed its seamier side during the last two bear markets. From Bernie Madoff and Alan Stanford, Enron accounting to off balance sheet vehicles for banks, we have seen some things we were never intended to. But now we know and hopefully all of us are a little bit wiser for it.
Alan Marks is a veteran portfolio manager with Oaktree Capital Management, L.P. He recently penned a memo to his clients about the recent lunacy. Drawing upon Warren Buffet's latest address to Berkshire Hathaway shareholders and Buffet's comment on modern times:
There's so much that's false and nutty about modern investment banking. If you just got rid of the nonsense, that would be a goal to shoot for.
For the next 15 pages Howard writes about what happened, why, and some things to think about for next time. It's a great read, very informative, sometimes humorous and sometimes a head-shaker(at modern financial practices). The missive sums up most of what I believe about what has taken place and sound investment practices, and I have a hard time pointing to any one place where I would have put it much differently. You'll find many of these same ideas exposed in different forms as this blog evolves. I give it to you here via the fantastic blog Zero Hedge. Click here and enjoy.
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