Howard Marks' Shipping Loss

Andrew Wilkinson shares a story about blindly following a famous investor's moves and losing money.

"I read Howard Marks' book - he's a famous billionaire investor, value investor, specializes in distressed debt. I read his book and thought 'wow this guy is amazing, what a great investor.' I realized there are ways to see what they were buying, so you can find out what all your favorite investors buy in the stock market.

I thought 'I totally trust this guy, I read his book, it's incredible' so I'm going to buy into this weird Greek shipping company that he just bought $50 million of equity in. I put like $100 into it and it goes out of business.

What I didn't understand was two things: One, he has thousands of positions, or at least 100, and for him it's just a tiny little roulette chip. Two, he's a distressed debt investor, so he might buy the equity but he's mostly focused on the debt and expecting it to go out of business. I actually screwed myself by not understanding it and just blindly going along with it. I've made that same mistake hundreds of times."