From Value Investor Insight: Oaktree Capital Chairman Howard Marks often credits a 1975 article in The Financial Analysts Journal as a key contributor to his investment thinking. In the article, titled “The Loser's Game,” investing legend Charles Ellis argued that increased competition among highly skilled professional investors had turned investing from a Winner's Game, in which the aggressive, deliberate actions of a privileged view could generate consistent outsized returns, to a Loser's Game, where the emphasis must shift toward making fewer mistakes than others. The numbers made a good case for passive investing, he wrote, but citing his own experience and the work of scientist Simon Ramo, historian Admiral Samuel Elliot Morrison and professional golf instructor Tommy Armour, Ellis does offer some specific advice to those determined to try to win the Loser's Game.
http://www.valueinvestorinsight.com/pdfs/TheLosersGame.PDF
For more information - go to Value Investor Insight May 27th 2011.
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