Howard Marks, Co-Founder & Co-Chairman, Oaktree Capital Management
I’ll admit I was late to the cult of Howard Marks.
Despite covering financial and business news for many years, his was a name I vaguely knew but never focused on unlike other more obvious influential billionaire types like Warren Buffett and Carl Icahn.
John O’Connell, Chairman and CEO of Davis Rea Investment Counsel, sparked my interest in Marks, a specialist in distressed debt, by telling me he’s read his ‘memos’ for years. Memos? What are these?
I then discovered a 30-year archive of Marks’ memos. Clear-eyed, thoughtful and practical dissertations on investing that he makes available for free on the Oaktree Capital Management website.
(You may know that Brookfield Asset Management bought a 62% stake in Oaktree in 2019.)
Buffett famously said of the memos by Marks:
“When I see memos from Howard Marks in my mail, they’re the first thing I open and read. I always learn something, and that goes double for his books.”
Marks has written a handful of books including 2011’s The Most Important Thing: Uncommon Sense for the Thoughtful Investor.
Just to clarify, our name Uncommon Sense Investor is not a direct rip-off of that title. I’m told an advertising agency came up with our moniker several years ago with no knowledge of Marks’ use of the phrase. Honestly.
My point here, and I do have one, is that with an average annual return since 1995 of about 19% for his clients such as pension funds and private equity, Marks is always worth paying attention to.
Some of Marks’ investment words to live by include:
- The ways for investors’ to get advantage are through better inferring the consequences implied by current company data, managing the psychology of investing, and assessing the present stage of the business/market cycle.
- It’s important for investors to admit what they don’t know instead of believing something is certain.
- Aim for a high batting average over home runs.
His latest memo takes a detailed look at the positive and negative factors currently facing investors and concludes that the positives are largely being favoured and the negatives mostly ignored.
In Marks’ words: “…with listed security prices where they are, the odds aren’t in investors’ favour.”
If you enjoy podcasts, do yourself a favour and listen to the interview Marks conducted with Tim Ferriss. Marks’ opening story about his first job on Wall Street in 1968 and what happened to the flavour of the day Nifty 50 stocks is worth hearing in and of itself.