“No asset is so good that it can't become a bad investment if bought at too high a price.”
Price Has to Be the Starting Point
From Howard Marks’s July 1, 2003 Oaktree memo The Most Important Thing, which seeded his 2011 book of the same name. The memo collects the precepts that guide Oaktree, each one introduced as “the most important thing.” The first one Marks names is the relationship between price and value: “For a value investor, price has to be the starting point.”
The next sentence in the memo is the mirror: “there are few assets so bad that they can’t be a good investment when bought cheap enough.” Marks names the failure mode the pair is meant to block: across 35 years he had watched investors lose the most by paying prices that assumed perfection, then treating “good company” as if it meant “good investment.”