Speaker
Howard Marks
Appearances over time
1 episodes
Episodes
1
Podcasts
Quotes & moments
Howard Marks argues AI's autonomy — the ability to receive a task and figure out how to do it without instruction — is unique among all technological innovations in history.
Before the 2008 crisis, the largest distressed debt fund in history was Oaktree's 2002 fund at $2.5 billion.
Oaktree raised an $11 billion distressed debt fund in 2007–2008 before the crisis hit, the largest of its kind at the time.
After Lehman Brothers collapsed, Oaktree's Bruce Karsh invested an average of $450 million per week for 15 weeks — $7 billion in a single quarter.
Howard Marks and Bruce Karsh have been partners at Oaktree for 39 years as of the episode, and Marks says they have never had a fight.
Howard Marks admitted he made major life decisions haphazardly and without intention for his first 49 years, only beginning to live consciously when he co-founded Oaktree around 1995.
Warren Buffett sent Howard Marks a note in 2009 saying he should write a book and promised a blurb — directly causing Marks to write 'The Most Important Thing' years ahead of his planned retirement.
Howard Marks says second-level thinking — having a variant perception from the market consensus and betting on it correctly — is more innate than teachable, similar to how you can't coach height in basketball.
In a memo titled 'Taking the Temperature,' Howard Marks reviewed his five major macro investment calls over 26 years and found every single one was made with some level of doubt.
Charlie Munger's greatest contribution to Berkshire Hathaway was convincing Warren Buffett to stop buying cheap, low-quality companies ('cigar butts') and instead buy great companies at a good price.
Oaktree was founded in 1988, giving Marks and Karsh 20 years of track record and relationships to draw on when raising the $11B fund in 2007–2008.
Howard Marks quoted Mark Twain: 'It ain't what you don't know that gets you into trouble. It's what you know for certain that just ain't true.'
Howard Marks observed that the rise of index investing exposed most active equity managers as underperformers who couldn't beat the averages.
Unusually, Oaktree made their next fund smaller after a great-performing fund, because strong results meant assets had appreciated and future opportunities were less attractive.
Every prior technology — railroads, computers, the internet — was a tool to speed up productivity. AI is the first technology with autonomy: you give it a job and don't tell it how, and it figures it out. That single quality changes everything.
After Marks sent Buffett a memo that mentioned him, Buffett replied saying he should write a book and offered to provide a blurb. That single note moved up Marks' planned book by decades — and 'The Most Important Thing' was the result.
Warren Buffett used to buy cheap, low-quality companies just because they were cheap — cigar butts with a few puffs left. Charlie Munger convinced him to abandon that strategy and buy great companies at good prices instead. That shift is credited as Munger's single greatest contribution.
AI will expose investors whose talents don't match their claims, just as indexation did to most active managers. But there will always be novel situations with no historical data to train on — and that's where human judgment with 'hair on its neck' still matters.
Second-level thinking means seeing something different from the consensus — a variant perception — and being right about it. You can teach someone why it matters, but you can't teach them how to have it. It's like insight: either you have it, or you don't.
When Lehman collapsed, there was no data, no historical analogy — only supposition. Oaktree's logic was simple: if the financial world ends, nothing matters. If it doesn't, and you don't invest, you failed your mandate. Bruce Karsh deployed $450M a week for 15 weeks.
Most investment firm partnerships collapse because cowboys and chickens end up together and tear each other apart in different market conditions. Howard Marks and Bruce Karsh have been partners 39 years because they share values, have complementary skills, and genuinely appreciate what the other does.
Howard Marks wrote a skeptical AI memo in December, then rewrote it entirely in February after his son Andrew — a VC working with AI daily — told him too much had changed. This is second-level thinking applied to your own beliefs: get new facts, update your view.
A Wall Street therapist once said his patients' problems were inversely proportional to the support they got from their fathers. Marks says too many successful men feel compelled to assert superiority over their sons — and deliberately chose never to be that kind of father.
Howard Marks admits he stumbled into every major career decision — Citibank, bonds, California — through luck and haphazard drift, not intention. He only began living deliberately at roughly 49 when he co-founded Oaktree. The lesson: it's never too late to start.
John Kenneth Galbraith's 'A Short History of Financial Euphoria' is Marks' most influential book recommendation. It explains the recurring psychological weakness that causes financial booms and busts — and Marks was lucky enough to meet Galbraith himself.
You can't raise money during a crisis because the news is too terrible. Oaktree raised $11B before the 2008 crash by pointing to real flaws in the market, twenty years of track record, and a counterintuitive habit: shrinking their next fund after a great return.
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- Business 77%
- Society & Culture 15%
- Technology 8%
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