STREET DOGS
MICHEL PIREU: Intelligent speculator vs conventional investor
From Howard Marks at Inside Investing:The word "speculation" is commonly applied to risky investments. And the word "risky" is usually used by the masses to describe investments in assets of low quality or uncertain outlook.On the other hand, "safe investment" is commonly associated with assets of high quality and/or those with a positive outlook. However, because of these desirable characteristics, so-called "safe investments" usually sell at high prices. And high prices have the potential to turn high-quality assets into risky investments.The more insightful investor knows that "high quality" and "favourable outlook" are in no way synonymous with "good investment" and certainly not with "safe investment". Rather than quality, the greatest determinant of a safe investment is cheapness. Buying high-quality assets at high prices can be risky.Low-quality speculations are usually looked down upon. But widespread derision usually results in low prices, which can make for high return pot...
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