The Memo by Howard Marks

In his latest memo, Howard Marks outlines the need to base asset allocation decisions around an established risk target. He describes the fundamental differences between ownership and debt, as well as the importance of finding the combination of the two that gets an investor’s portfolio to the desired position on the risk/return continuum. Finally, he expands on the increased utility of debt investments in today’s portfolios.You can read the memo here (https://www.oaktreecapital.com/docs/default-source/default-document-library/ruminating-on-asset-allocation.pdf?sfvrsn=67775566_2).

In his latest memo, Howard Marks discusses the economic facts of life, as he examines the workings of free markets and what happens when they’re tampered with. He considers what “price-gouging” actually means and how rents should be set. He ultimately argues that the laws of economics shouldn’t be overridden — even when it’s politically advantageous to do so – because of the loss to society.You can read the memo here (https://www.oaktreecapital.com/docs/default-source/memos/shall-we-repeal-the-laws-of-economics.pdf?sfvrsn=ab205566_1).

In this special episode of Behind the Memo, Howard Marks is joined by Morgan Housel, the bestselling author and partner at the Collaborative Fund. They discuss ideas from Howard’s recent memo “The Impact of Debt,” which was inspired by Morgan’s article “How I Think About Debt.” They explore the relationship between leverage and longevity, the nature of risk, and the eternal relevance of Voltaire’s famous saying: “History doesn’t repeat itself. Man always does.”You can listen to or read the Memo here (https://www.oaktreecapital.com/insights/memo-podcast/the-impact-of-debt).

In his latest memo, Howard Marks discusses the reasons for the recent market volatility using one of finance’s classic metaphors: Mr. Market, the figure Benjamin Graham created in 1949 to explain the erratic nature of financial markets. Howard pulls together some of his best writing on investor psychology from the past three decades, adds some of his favorite investing cartoons, and offers a few new observations. He suggests that Mr. Market’s lessons about the behavior of markets are as relevant today as they were 75 years ago.You can read the memo here (https://cnt.oaktreecapital.com/docs/default-source/memos/mr-market-miscalculates.pdf?sfvrsn=ddfe5566_1).

In this episode of Behind the Memo, Howard Marks is joined by two special guests: Oaktree cofounder Bruce Karsh and the chess Grandmaster Maurice Ashley. In a wide-ranging conversation, they discuss Howard’s recent memo "The Indispensability of Risk" as well as the inspiration for that memo: Maurice’s Wall Street Journal article, "Chess Teaches the Power of Sacrifice." They consider the many parallels between chess and investing, including the lesson that not taking enough risk may be one of the riskiest strategies of all.You can read the memo here (https://www.oaktreecapital.com/docs/default-source/memos/the-indispensability-of-risk.pdf?sfvrsn=52b45666_3).

In his latest memo, Howard Marks discusses the importance of avoiding expressions of absolute certainty when operating in fields subject to randomness and human emotion, like politics, economics, and investing. He suggests that it’s better to have humility and acknowledge that the smartest thing to say is often “I don’t know.”You can read the memo here (https://www.oaktreecapital.com/insights/memo/the-folly-of-certainty).

In a special edition of The Insight: Conversations, you’ll hear excerpts from multiple sessions held during Oaktree’s recent biannual client conference.  Oaktree co-chairman Howard Marks does a deep dive into his sea change thesis, members of Oaktree’s Global Credit team examine the most significant trends impacting the high yield bond and leveraged loan markets, and Oaktree’s Opportunistic Credit team explores key themes reshaping today’s restructuring environment.

Oaktree Co-Chairman Howard Marks (https://www.linkedin.com/in/howardmarksbook/) joined the In Good Company podcast with Nicolai Tangen (https://www.linkedin.com/in/nicolai-tangen/).  They discussed Howard's investment philosophy, risk management, and how to determine the quality of a decision.

In his latest memo, Howard Marks examines the relationship between leverage and survivability, taking inspiration from a recent Collaborative Fund post by Morgan Housel. Howard explains why determining the appropriate amount of leverage should be about optimization, not maximization.You can read the memo here (https://www.oaktreecapital.com/insights/memo/the-impact-of-debt).

Where are we in the market cycle? Why is it healthy to be uncertain? And what does it mean to actually “be opportunistic”? In the latest episode of The Insight: Conversations, Howard Marks (Co-Chairman), Armen Panossian (Co-CEO), and David Rosenberg (Head of Liquid Performing Credit) discuss these and other topics from the recently published Performing Credit Quarterly 1Q2024: Unusually Uncertain.

In his latest memo, Howard Marks considers what chess can teach investors about the paradox of risk-taking. Drawing on insights from a recent Wall Street Journal article (https://www.wsj.com/sports/chess-teaches-the-power-of-sacrifice-221db7b7) by chess grandmaster Maurice Ashley, Howard explains why not taking enough risk may be one of the riskiest strategies of all.You can read the memo here (https://www.oaktreecapital.com/insights/memo/the-indispensability-of-risk).

In his 2020 memo You Bet!, Howard Marks explained what it means to “think in bets,” as he discussed the many parallels between investing and games of chance. Now you can listen to You Bet!, the first release from The Memo by Howard Marks: The Archive. We’ve received many requests for an audio library of the memos that Howard Marks has published over the last 34 years, so we’re going to begin building this archive by releasing audio versions of some of Howard’s most popular memos.To hear more about Howard’s thoughts on this memo, listen to his conversation with former professional poker player and best-selling author Annie Duke, whose 2018 book Thinking in Bets was the inspiration for the memo. This special episode (https://www.oaktreecapital.com/insights/insight-podcast/market-commentary/the-insight-conversations-special-episode-with-annie-duke-and-howard-marks) of the The Insight: Conversations with Howard and Annie was released in December 2023.

In this special episode of Behind the Memo, Howard Marks is joined by journalist and financial historian Edward Chancellor to discuss ideas from Howard’s recent memo, Easy Money, which was inspired by Edward’s book, The Price of Time: The Real Story of Interest. They explore the history of interest rates, the profound impact they’ve had on financial markets, and the potential dangers of keeping them too low.You can listen to "Easy Money" in the prior episode in this feed.

In his latest memo, Howard Marks considers what financial history can teach us about periods of easy money, the impact they have on investor behavior, and what happens when they end. He analyzes macroeconomic trends using insights from Edward Chancellor’s latest book The Price of Time: The Real Story of Interest to argue that we’re unlikely to soon see the return of the permissive investment climate that prevailed in recent decades.The memo is read by LJ Ganser.You can read the memo here (https://www.oaktreecapital.com/insights/memo/easy-money).

What is a “normal” investment environment? What might a recession in 2024 mean for liquid credit? What’s happening in life sciences lending today? Find out by listening to the latest episode of The Insight: Conversations with Howard Marks (Co-Chairman), David Rosenberg (Co-Portfolio Manager, Global Credit), and Aman Kumar (Co-Portfolio Manager, Life Sciences Lending). They discuss topics from the December edition of The Roundup: Top Takeaways from Oaktree’s Quarterly Letters and consider what investors should focus on as we enter 2024 – and what remains unknowable.

Special guest Annie Duke (former professional poker player, best-selling author) joins Howard Marks to discuss ideas from her book Thinking in Bets and Howard’s memo You Bet!  They explore luck, decision quality, uncertainty, and more in this special episode of The Insight: Conversations.

Howard Marks (Co-Chairman) and Armen Panossian (Head of Performing Credit) discuss topics related to Howard’s latest memo, Further Thoughts on Sea Change, and Oaktree’s recently published Performing Credit Quarterly 3Q2023 in this crossover episode of The Insight: Conversations and Behind the Memo. They consider the implications of the potential sea change reshaping the investment environment, the tail risks building in today’s markets, and what it means to be in a full return world.

In his latest memo, Howard Marks provides a follow-up to Sea Change (https://www.oaktreecapital.com/insights/memo/sea-change), his thought-provoking memo published in December 2022. He argues that the trends he highlighted in the original memo collectively represent a sweeping alteration of the investment environment that calls for significant capital reallocation. Further Thoughts on Sea Change was originally sent exclusively to Oaktree clients on May 30, 2023. All market data cited in this memo is as of May 30, 2023.The memo is read by LJ Ganser.You can read the memo here (https://www.oaktreecapital.com/docs/default-source/memos/further-thoughts-on-sea-change3dda4540-569f-4415-9a5b-004fbabf06d4.pdf?sfvrsn=c3cc5166_3).

How have credit investors been successfully navigating the volatile interest rate environment?  Which sectors currently look attractive to opportunistic credit investors?  What are some of the major misconceptions about today’s commercial real estate market?  In this episode of The Insight: Conversations, Wayne Dahl (Assistant Portfolio Manager, Global Credit), Robert O’Leary (Portfolio Manager, Global Opportunities), and Mark Jacobs (Co-Portfolio Manager, Real Estate Income) discuss topics from the September edition of The Roundup: Top Takeaways from Oaktree’s Quarterly Letters (https://www.oaktreecapital.com/insights/insight-commentary/market-commentary/the-roundup-top-takeaways-from-oaktrees-quarterly-letters-september-2023-edition) and explain what it means to be in a credit picker’s market.

In the latest episode of Behind the Memo, Howard discusses his recent memo: Fewer Losers, or More Winners?  He details the inspiration for the memo and explains why investors – like tennis players – need to consider their skill level, aspirations, and risk tolerance when asking themselves a fundamental question: Should I go for more winners, or try to avoid the losers?You can listen to Fewer Losers, or More Winners? in the prior episode or read it here (https://www.oaktreecapital.com/insights/memo/fewer-losers-or-more-winners).