Howard Marks — How to Invest with Clear Thinking (#338)

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“It’s not what you buy; it’s what you pay.” — Howard Marks

Howard Marks (@howardmarksbook) is co-chairman and co-founder of Oaktree Capital Management, a leading investment firm with more than $120 billion in assets. He is the author of the new book Mastering the Market Cycle: Getting the Odds on Your Side, and his previous book on investing, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, was a critically acclaimed bestseller. Warren Buffett has written of Howard Marks: “When I see memos from Howard Marks in my mail, they’re the first thing I open and read. I always learn something.” Marks holds a B.S.Ec. degree from the Wharton School of the University of Pennsylvania with a major in finance and an M.B.A. in accounting and marketing from the University of Chicago.

In this conversation, we discuss:

  • How his firm was poised to capitalize on the bubble in 2008 and put massive amounts of capital to work.
  • His thoughts on understanding market cycles for making better decisions.
  • The three stages of a bull market.
  • Newsletters he reads.
  • Thoughts on Bitcoin and cryptocurrencies.
  • Much, much more…

Studying what Howard says transcends the world of investing—it’s really a study in clearer thinking. I hope you enjoy and learn as much as I did!

Listen to the episode on Apple Podcasts, Spotify, Overcast, or wherever you get your podcasts. You can find the transcript of this episode here. Transcripts of all episodes can be found here.

#338: Howard Marks — How to Master Market Cycles

Want to hear another conversation with an investor whose thoughts transcend finances? Check out my interview with Adam Robinson, who was mentored in chess as a teenager by Bobby Fischer and is now a global macro advisor to the world’s most successful hedge funds and family offices. (Stream below or right-click here to download.)

#219: Lessons from Warren Buffett, Bobby Fischer, and Other Outliers

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QUESTION(S) OF THE DAY: What was your favorite quote or lesson from this episode? Please let me know in the comments.

Scroll below for links and show notes…


  • Connect with Howard Marks:

Website | Oaktree Capital Management | Twitter | LinkedIn | Facebook


  • We kick things off with an A.E. Housman poem. [05:49]
  • What is mujō, and how did it become a part of Howard’s life philosophy? [06:53]
  • According to Howard (and a prominent insurance company): you can’t predict, but you can do this. [09:22]
  • In what ways did Howard’s company prepare for 2008’s bubble to burst when a lot of others were pulling out of the market, and how did he reassure investors eager for a return to take the long view? [11:09]
  • How does someone get the odds on their side, and what did it take to get Howard to turn 20 years of memos into a book? [14:40]
  • Most of us are essentially cautious or essentially aggressive. Is either bias particularly good for choosing when to invest? [18:13]
  • Is it possible to develop stoic resilience in the face of a mercilessly fluctuating market, or is this something with which one is born? [23:06]
  • Howard talks about the synergy of his 31-year partnership with Bruce Karsh and what each brings to the table. [24:35]
  • To what does Howard credit the fact that there have never been any serious arguments over the span of this 31-year partnership? [32:14]
  • Is there a secret formula to getting along with business partners through emotionally trying times? [33:03]
  • How might someone vet a potential partner as a good fit before going into business with them? [34:56]
  • Howard elaborates on why, in addition to an opinion regarding what’s going to happen, people should have a view on the likelihood that their opinion will prove correct. [37:37]
  • According to Henry “Dr. Doom” Kaufman, it’s these two kinds of people who lose a lot of money. [42:36]
  • What reading does Howard recommend for people looking to expand their awareness of limited knowledge? [43:23]
  • Can dumb money become smart money? [47:08]
  • Howard says his life is pretty calm and he tries to keep it that way. But what might disrupt this calm and what would he do to reel things back to reason? [49:02]
  • How does Howard maintain a balance between the confidence of experience and an understanding that all knowledge is incomplete in order to take action? [50:35]
  • The case to be made against stop-loss orders and other templated approaches to investment. [52:50]
  • To Howard, superior judgment outweighs any process or rule. But what is it? [54:27]
  • The one simple question Howard would ask of each investment under consideration. [57:44]
  • It’s not what you buy, it’s what you pay. [58:17]
  • Expressions too absolute to be useful in a world beset by uncertainty and randomness — like the stock market. [1:01:31]
  • How does Howard check the market’s temperature? [1:02:27]
  • The three stages of the bull market (and, conversely, the bear market). [1:05:27]
  • Currently, what has Howard hopeful and what has him worried about the economy? [1:07:17]
  • Why it’s important for people to invest only at a level that makes them comfortable. [1:12:20]
  • The twin risks of investing and the case for finding a comfortable middle. [1:16:26]
  • In what ways does Howard most disagree with Warren Buffett’s style and strategies? [1:18:08]
  • Do the games people play accurately determine their risk tolerance for investing? [1:22:57]
  • Investment misconceptions that prevail and what a lot of otherwise smart people miss about the nature of cycles. [1:26:21]
  • We can’t expect the market — or life in general — to accommodate our needs or desires. Patience is essential. [1:29:20]
  • Lessons Howard learned from financial historian Peter Bernstein. [1:31:21]
  • Newsletters, columnists, economists, or writers who Howard finds himself excited to read these days. [1:35:19]
  • The book Howard is reading now and recommends. [1:38:15]
  • What is Howard’s take on cryptocurrency, and how do we measure its intrinsic value? [1:40:46]
  • Growth or venture investors Howard admires. [1:45:33]
  • Mental models or heuristics that Howard has used in his investing life that are particularly valuable across the board in life. [1:49:11]
  • Final thoughts. [1:51:26]


The Tim Ferriss Show is one of the most popular podcasts in the world with more than 900 million downloads. It has been selected for "Best of Apple Podcasts" three times, it is often the #1 interview podcast across all of Apple Podcasts, and it's been ranked #1 out of 400,000+ podcasts on many occasions. To listen to any of the past episodes for free, check out this page.

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20 Replies to “Howard Marks — How to Invest with Clear Thinking (#338)”

  1. If you only take away one thing it is this:

    Income producing assets (businesses & real estate etc) have intrinic value, non income producing assets (currencies, commodities & gold etc) don’t.

    Don’t over think it.

    If the asset doesn’t produce positive cash flows avoid it.

    1. Not really. If you were holding real estate in 2008 you would have lost your ass. If you were holding gold you would have done quite well. Gold definitely has a place in your portfolio as a chaos hedge and I guarantee you that hedge funds invest in gold with appropriate percentages.

  2. Great interview. I’m getting his book for sure. (I think when he talks about FAANG stocks, he meant to say Apple instead of Google 0:59m). This one and the Ray Dalio podcast are essential for value investors.

  3. King Timothy,

    What a wonderful interviewer you have become. Thanks for this one my friend. Not only was it a great listen, but one to be revisited many times over.



  4. “It’s not what you buy, it’s what you pay” . My favorite quote from this podcast. Everything can be a good investment or good deal if you paid the right price.

  5. Another great interview Tim! I would love to see you interviewing Don Greene, a sports psychologist professor at The Julliard School of Music. He’s trained all the best athletes and musicians around the globe to perform their best under pressure.


  6. Hi Tim,

    Great content, thanks for doing it! In the latest email I’ve noticed you added Latvia to your visit list. There is one small country just next to it – Lithuania. It has great old town architecture and few more great places. If you plan to be around, let me know, I can share some ideas or show around.


  7. What an extraordinary opportunity to listen to a 30 year vet impart his sage wisdom. Tim, your questioning was so intuitive – you really brought your intelligence to this interview. Definitely don’t ask a bull what second-level thinking is; you need to ask a Bear!

  8. Such a good episode and so many analogies in investing that can be applied to life in general. PS Random segway but would be awesome to have Trevor Noah on the show 🙂

  9. Hello Tim,

    I appreciate your work and i am your big fan of your work as well.

    I have one request, can you please call Akshay Kumar (Bollywood Actor) on your podcast?

    Would be great to hear him and eventually you can gather more peoples from India on your website and after all it would be more beneficial for you as well.

    Have a good one today,


    1. Wow! He just said that making the most money and acting with integrity are conflicting values! Something to think about 26:51 . So how to make the most money WITH integrity?

  10. I didn’t expect to be interested in this episode but it turns out to be one of my favorites, I enjoyed it so much I purchased his book and I’m loving the insights