“Move forward but with caution.” — Howard Marks
Howard Marks (@HowardMarksBook) is co-chairman and co-founder of Oaktree Capital Management, a leading investment firm with more than $125 billion in assets under management. He is the author of the books Mastering the Market Cycle: Getting the Odds on Your Side and The Most Important Thing: Uncommon Sense for the Thoughtful Investor, both critically acclaimed bestsellers.
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 BSEc degree from the Wharton School of the University of Pennsylvania with a major in finance and an MBA in accounting and marketing from the University of Chicago.
Please enjoy!
Listen to the episode on Apple Podcasts, Spotify, Overcast, Stitcher, Castbox, Google Podcasts, or on your favorite podcast platform. You can find the transcript of this episode here. Transcripts of all episodes can be found here.
What was your favorite quote or lesson from this episode? Please let me know in the comments.
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Want to hear Howard’s first time on the show? Check out our 2018 conversation, in which we discuss risk tolerance, patience, cryptocurrency, mental models for investing, superior judgment, getting along with a business partner, and much more.
SELECTED LINKS FROM THE EPISODE
Connect with Howard Marks:
Website | Oaktree Capital Management | Twitter | LinkedIn | Facebook
- Howard Marks — How to Invest with Clear Thinking, The Tim Ferriss Show #338
- Mastering the Market Cycle: Getting the Odds on Your Side by Howard Marks
- The Most Important Thing: Uncommon Sense for the Thoughtful Investor by Howard Marks
- All of Howard Marks’ Memos at Oaktree
- Memo to: Oaktree Clients, Re: You Bet! From: Howard Marks, Oaktree
- Citibank
- The University of Chicago
- What Was the Nifty 50?, Investopedia
- Outliers: The Story of Success by Malcolm Gladwell
- What Does Investment Grade Mean?, Investopedia
- Junk Bond Definition, Investopedia
- Compare: 1918 Spanish Influenza Pandemic Versus COVID-19, Biospace
- What Was the Great Depression?, Investopedia
- Oil Collapse and COVID-19 Create Toxic Geopolitical Stew, The New York Times
- A Guide to COVID-19 Economic Stimulus Relief, CFPB
- Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts by Annie Duke
- Decisions Under Uncertainty: Drilling Decisions By Oil and Gas Operators by C. Jackson Grayson Jr.
- Memo to: Oaktree Clients, Re: Knowledge of the Future From: Howard Marks, Oaktree
- Fed Is ‘Not Going to Run Out of Ammunition,’ Powell Vows, Bloomberg
- Treasury Bills — T-Bills Definition, Investopedia
- Star Wars
- US GDP Declined in First Quarter, With Worse Economy to Come, The New York Times
- 5 Reasons The Market Is Rising While Unemployment Is Skyrocketing, The Motley Fool
- Here’s Why You Really Need a Flu Shot, NPR
- Confirmation Bias in 5 Minutes, Thought Monkey
SHOW NOTES
- Howard opens with the story of arriving at First National Citibank in May of 1968 and how it contrasted with what he then did in 1978. [04:28]
- If Howard were to look at our current circumstances as a game and perhaps compare it to 2008, what are the games we’re looking at now? [12:00]
- How is Howard navigating the unprecedented uncertainties of 2020? [16:39]
- What does Howard think the unintended consequences of instating stimulus packages designed to offset COVID-19-related economic disruption might be, and is this solution better or worse than others we might have tried instead? [25:46]
- How does the Fed’s stimulus strategy affect Howard’s playbook regarding crowded versus uncrowded opportunities? How does he implement defense? [34:16]
- Does Howard believe the Fed is truly operating, as Chair Jay Powell says, with “infinite” ammunition? What does he see as the possible outcomes and probabilities if this kind of spending continues for a long period of time? [44:08]
- If the American economy is on life support, by what metrics could we determine that the patient is ready to be taken off of life support? [46:58]
- What types of questions are the wise asking these days? Are any particular types of thinking or questions present in those people Howard admires as good thinkers right now? [49:40]
- What are some of the higher-signal sources of information that Howard’s paying attention to these days? [55:13]
- What does Howard think people perhaps aren’t thinking about as much as they should? [59:18]
- Parting thoughts. [1:02:10]
Comment Rules: Remember what Fonzie was like? Cool. That's how we're gonna be — cool. Critical is fine, but if you're rude, we'll delete your stuff. Please do not put your URL in the comment text and please use your PERSONAL name or initials and not your business name, as the latter comes off like spam. Have fun and thanks for adding to the conversation! (Thanks to Brian Oberkirch for the inspiration.)
I’ve been listening to old Joe Rogan podcasts. From 7 years ago. Tim predicts a coming pandemic. The best is Tim sounding relaxed and specifically wise. I enjoyed it immensely. https://www.youtube.com/watch?v=rzHVQBtPcDA
Huge Marks fan, always read his publicly released memos. It’s great to have this chance to hear him talk through his thinking on markets, risk, pricing and uncertainty and the current environment. Thank you so much for having him on the podcast just now.
The only reason its the biggiest health crisis in the last hundred years is because governments and the media have convinced everyone it is.
Hey Tim, I love your writings with valuable information. The three ways can be termed as golden ways in the market.
Hey Tim, loved the two questions you asked at the end:
– What would you hope people would think more about ?
– What aren’t people paying enough attention to?
Thank you for doing the work you do! Cheers