Part 2/8:
Marks emphasizes that the primary role of a professional investor is risk control rather than merely making money. The market typically trends upward, thus generating profits can often feel easy. However, the real skill lies in crafting a portfolio that can generate returns while keeping risks under control.
In Marks’ perspective, risk management involves understanding that no one can reliably predict the future. Investors must acknowledge their limitations and refrain from claiming certainty about market conditions. This approach aligns with the thoughts of economists and educators like John Kenneth Galbraith and Amos Tversky, who elucidate a distinction between genuine knowledge and what people simply believe they know.