Investing Guide: https://clickhubspot.com/epkr
Episode 841: Sam Parr ( https://x.com/theSamParr ) and Shaan Puri ( https://x.com/ShaanVP ) talk to legendary investor Howard Marks about AI and making decisions in the face of fear and uncertainty.
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Show Notes:
(0:00) AI Hurtles Ahead
(8:26) second level thinking
(10:21) investing through the end of the world
(14:47) raising $11B at a time of crisis
(17:54) investing with fear
(20:22) the key to a successful partnership
(25:01) being a good father
(27:37) only 1 success: to live your life your way
(34:17) Having lunch with Warren Buffett
(37:18) What people don't know about Buffett
(39:37) cigar butt investing
(41:35) recommended reading
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Links:
• AI Hurtles Ahead - https://www.oaktreecapital.com/insights/memo/ai-hurtles-ahead
• A Short History of Financial Euphoria - https://www.amazon.com/History-Financial-Euphoria-Penguin-Business/dp/0140238565
• Fooled by Randomness - https://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219
—
Check Out Sam's Stuff:
• Hampton (joinhampton.com): My community for founders. Average member does $25m/year. Many of the guests are members. Get after it...apply: http://joinhampton.com/mfm
—
Check Out Shaan's Stuff:
• Shaan's weekly email - https://www.shaanpuri.com
• Visit https://www.somewhere.com/mfm to hire worldwide talent like Shaan and get $500 off for being an MFM listener. Hire developers, assistants, marketing pros, sales teams and more for 80% less than US equivalents.
• Mercury - Shaan uses Mercury for banking across all of his companies. you can too: http://mercury.com/
Mercury is a fintech company, not an FDIC-insured bank. Banking services provided by Choice Financial Group, Column, N.A., and Evolve Bank & Trust, Members FDIC
• I run all my newsletters on Beehiiv and you should too + we're giving away $10k to our favorite newsletter, check it out:
beehiiv.com/mfm-challenge
My First Million is a HubSpot Original Podcast // Brought to you by HubSpot Media // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano /
Want to invest like the best? Get Mohnish's investment playbook: https://clickhubspot.com/jbhm
Episode 808: In this special episode, we’re pulling together the most replayed moments from our episodes with value investors like Mohnish Pabrai, Howard Marks and Guy Spier.
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Show Notes:
(0:00) Mohnish Pabrai: How to turn $10K into $1M
(3:56) Howard Marks: The S&P 500
(9:29) Guy Spier: Finite and Infinite Games
(14:47) Mohnish Pabrai: Circle the wagons
(17:58) Howard Marks: Recommended Reading
(23:03) Mohnish Pabrai: The most important thing
(27:16) Howard Marks: “When the time comes to buy, you won’t want to”
(31:17) Guy Spier: Don’t study lottery winners
—
Check Out Sam's Stuff:
• Hampton (joinhampton.com): My community for founders. Average member does $25m/year. Many of the guests are members. Get after it...apply: http://joinhampton.com/mfm
—
Check Out Shaan's Stuff:
• Shaan's weekly email - https://www.shaanpuri.com
• Visit https://www.somewhere.com/mfm to hire worldwide talent like Shaan and get $500 off for being an MFM listener. Hire developers, assistants, marketing pros, sales teams and more for 80% less than US equivalents.
• Mercury - Need a bank for your company? Go check out Mercury (mercury.com). Shaan uses it for all of his companies!
Mercury is a financial technology company, not an FDIC-insured bank. Banking services provided by Choice Financial Group, Column, N.A., and Evolve Bank & Trust, Members FDIC
• I run all my newsletters on Beehiiv and you should too + we're giving away $10k to our favorite newsletter, check it out:
beehiiv.com/mfm-challenge
My First Million is a HubSpot Original Podcast // Brought to you by HubSpot Media // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano /
Want our 9 investment principles playbook? Get it here: https://clickhubspot.com/kcm
Episode 738: Sam Parr ( https://x.com/theSamParr ) and Shaan Puri ( https://x.com/ShaanVP ) talk to Howard Marks about principles of value investing.
—
Show Notes:
(0:00) The S&P 500
(11:48) Legendary memos
(18:45) Investing without emotion
(29:32) You can't raise money in a crisis
(36:05) Recommended Reading
(41:49) Higher than average returns
—
Links:
• Oaktree - https://www.oaktreecapital.com/
• Memos - https://www.oaktreecapital.com/insights/memos
• The Most Important Thing - https://tinyurl.com/47amrzhj
• Mastering The Market Cycle - https://tinyurl.com/mr33mjbr
• Devil Take The Hindmost - https://tinyurl.com/yx9ce7xn
• A Short History of Financial Euphoria - https://tinyurl.com/uavcnunx
• Winning a Loser’s Game - https://tinyurl.com/55ch2rh9
• Mistakes Were Made (But Not By Me) - https://tinyurl.com/yc85ek63
—
Check Out Shaan's Stuff:
• Shaan's weekly email - https://www.shaanpuri.com
• Visit https://www.somewhere.com/mfm to hire worldwide talent like Shaan and get $500 off for being an MFM listener. Hire developers, assistants, marketing pros, sales teams and more for 80% less than US equivalents.
• Mercury - Need a bank for your company? Go check out Mercury (mercury.com). Shaan uses it for all of his companies!
Mercury is a financial technology company, not an FDIC-insured bank. Banking services provided by Choice Financial Group, Column, N.A., and Evolve Bank & Trust, Members FDIC.
—
Check Out Sam's Stuff:
• Hampton - https://www.joinhampton.com/
• Ideation Bootcamp - https://www.ideationbootcamp.co/
• Copy That - https://copythat.com
• Hampton Wealth Survey - https://joinhampton.com/wealth
• Sam’s List - http://samslist.co/
My First Million is a HubSpot Original Podcast // Brought to you by HubSpot Media // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano
The run-up in Big Tech stocks and all the hype over AI has put a bunch of investors on "bubble watch." One of those is Howard Marks, the co-founder and co-chair of Oaktree Capital Management. Howard is one of the most famous credit investors in the world, but he has experience in stock market bubbles too. Back in early 2000 — right before the Nasdaq peaked — he pointed out the frothiness in equities in a famous note titled "Bubble.com." So how does he actually spot a market bubble? How does a bubble differ from a bull run? And what is he seeing right now? We chat with Howard about all these things, including his experiences both in 2000 and during the 2008 subprime crisis.
Read More: Can Howard Marks Spot a Stock Bubble Twice?
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When it comes to credit investing (or really any investing), there's an analytic art in deciding the right price to pay for a security. But often that's only part of the challenge. First you need someone to want to sell it to you. In something like public-market equity, this usually isn't hard. Liquidity is deep, and the "ask" price is well known. In something like private credit, it's much trickier. Someone has to sell you the deal. Someone has to call you about it and tell you about it. So how do you get the call? And how do you know when to say yes? On this episode, we speak with Milwood Hobbs, the Managing Director and Head of Sourcing & Origination at Oaktree. Prior to this role, he was at Goldman Sachs, also in leveraged finance origination and sales. So he's been involved in numerous credit deals in his career. On this episode, he talks us through his role, what's involved in it, how he gets offered deals, and how he determines what opportunities are better or worse.
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See omnystudio.com/listener for privacy information.
This week, the Fed cut benchmark rates by 50 basis points. Lower financing costs should be a relief for companies that need to borrow in the form of bonds or loans. But, the weird thing about the previous few years of high rates and high inflation is how much corporate credit has defied expectations. While defaults increased slightly, there wasn’t a huge wave of bankruptcies. And most companies haven’t really had trouble finding financing, with a smorgasbord of options available to them — including from the booming private credit market. So what happens now that the Fed is lowering rates? In this episode, we speak with Danielle Poli, co-portfolio manager of Oaktree’s Diversified Income Fund and a founding member of the firm’s investment committee, about how she sees the next leg of the credit cycle unfolding, and how she decides between a multitude of potential investments in the space.
Related Links:
The Black Hole of Private Credit That’s Swallowing the Economy
The Hottest Way for Banks to Get Risk Off Their Balance Sheets
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Today, we have a special two-part episode on private credit. In 2023, the global private credit market topped $2.1 trillion in assets and committed capital. Rather than making blanket statements like private credit is an emerging bubble, we wanted to explore the various segments of private credit and ask simple questions like “Where is this growth coming from?”, take a closer look at supply and demand, and capture some of the nuance that is so important to any analysis of these emerging markets.
To start, we use the lens of a successful fund manager in the space, Armen Panossian, the co-CEO of Oaktree. Beyond Howard Mark's famous memos, Oaktree is a $192 billion asset manager known for its long history in credit. We hope these conversations give you a better sense of what's happening in the private credit ecosystem, the difference between strategies and wrappers, the demand for private credit solutions, how regulations have impacted this market, and much more. Please enjoy this breakdown on private credit.
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For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes
(00:00:00) - Welcome to Business Breakdowns
(00:06:32) - Deep Dive into Private Credit: A Growing Market
(00:08:47) - Exploring the Dynamics of Supply and Demand in Private Credit
(00:11:38) - The Evolution of Private Credit Since the Global Financial Crisis
(00:15:58) - The Role of Private Equity and Banks in Private Credit
(00:19:33) - Building a Sustainable Advantage in Private Credit Strategies
(00:24:02) - Innovative Financing: The Case of Life Sciences Lending
(00:27:53) - Identifying New Opportunities: Infrastructure Lending and Rescue Financing
(00:30:40) - The Importance of Fund Size in Private Credit Strategies
(00:33:02) - Oaktree's Approach to Private Credit Products
(00:36:55) - Investment Strategy and Allocation Across Funds
(00:39:42) - Risk Management and Restructuring Expertise in Private Credit
(00:42:19) - Navigating the Secondary Market for Private Loans
(00:44:06) - Evolving Landscape of the Distressed Debt Market
(00:47:43) - Impact of COVID on Private Credit Valuations
(00:51:46) - Oaktree and Brookfield: A Strategic Partnership
(00:53:33) - Future Considerations: Rates, Elections, and Economic Implications
In theory, the Federal Reserve operates by tightening the supply of credit. Or at least making it more close. Yet so far, despite the rate hikes, the economy has remained resilient. And credit spreads have remained surprisingly tight. So what's going on? Where are the risks? Why are some pockets of the credit markets showing weakness, while others are rock solid? On this episode of the podcast, which was recorded live at the Future Proof conference in Huntington Beach, California, we speak with Wayne Dahl, a managing director and investment risk officer at Oaktree Capital Management, to get a broader lay of the land.
See omnystudio.com/listener for privacy information.
My guest today is Howard Marks, co-founder of Oaktree Capital, a leading investment manager, and one of the world’s largest distressed debt investors. In our conversation, we discuss takeaways from the market selloff and rapid recovery in 2020, the importance of assessing both quantitative and qualitative factors in markets, and the benefits Howard has realized from a career of writing. I hope you enjoy this great conversation with Howard Marks.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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Show Notes
[00:03:40] - [First question] - Ideas he has that he feels will stand the test of time
[00:04:39] - Defining the difference between risk and uncertainty and a frame of mind to have around uncertainty as an investor
[00:05:31] - Equity and debt investing as the businesses of what could go right or wrong
[00:07:01] - How exciting equity up runs can lead to analytical blindspots
[00:09:10] - Ways in which the last 18 months stacked up against his market experience
[00:11:57] - Ways we can change our model of the world going forward to avoid a crisis
[00:15:04] - Why psychology is important to consider over data during market extremes
[00:17:46] - Reflections and lessons from discussing the concept of value with his son
[00:27:33] - Spirited disagreements he and his son continue to have about markets
[00:31:46] - What he’s learned about writing well and the utility of doing so
[00:40:39] - Lessons that are better experienced in investing than reading about them
[00:43:35] - Daring to be great and the willingness to be wrong, alone or different
[00:50:24] - Embracing mystery and the joys it can bring
[00:53:28] - The kindest thing anyone has ever done for him
Howard Marks is co-chairman and co-founder of Oaktree Capital Management, a leading investment firm with more than $120 billion in assets. Prior to founding Oaktree, Howard spent 10 years at The TCW Group, where he was responsible for investments in distressed debt, high yield bonds, and convertible securities. Howard has also written two books, most recently Mastering the Market Cycle: Getting the Odds on Your Side, and it was Warren Buffet who said, "When I see memos from Howard Marks in my mail, they're the first thing I open and read. I always learn something."
Bill Gurley is a General Partner @ Benchmark Capital, one of the most successful funds of the last decade with a portfolio including the likes of Uber, Twitter, Dropbox, WeWork, Snapchat, StitchFix, eBay and many many more. As for Bill, widely recognised as one of the greats of our time having worked with the likes of GrubHub, NextDoor, Uber, OpenTable, Stitch Fix and Zillow. Prior to Benchmark, Bill was a partner with Hummer Winblad Venture Partners. Before entering venture, Bill spent four years on Wall Street as a top-ranked research analyst, including three years at CS First Boston.
In Today's Episode You Will Learn:
1.) In March Ray Dalio stated we would be entering a "global recession", how do Howard and Bill feel about this statement? How does today's environment remind Howard and Bill of 2010/11? What is similar? What is different? How does Bill think about investing through cycles?
2.) How does Bill think about investing through cycles? What have Bill's lessons been from seeing many venture vintages on LP performance across cycles? How does Howard think about investing through cycles from a distressed debt perspective? What have his lessons been from Oaktree's performance over the years?
3.) Do Howard and Bill agree we will not see interest rates go anywhere for the next 3-5 years? What is the impact of this sustained low-interest rate environment? What could be done that would see interest rates increase in the future? How does Bill believe this will impact the supply of LP dollars in venture?
4.) How do Bill and Howard evaluate the state of the public markets today? Why does Howard believe that FOMO has really taken effect? How does Bill think about network effects and the laws of compounding with regards to public companies?
5.) Do Howard and Bill agree we are seeing a retreat from globalisation? What are the core impacts of this retreat? Why is Bill so concerned about "regulatory capture"? Why does Bill fear that today, "Washington is for sale"? What would he like to see change?
Item's Mentioned In Today's Episode
Howard's Favourite Book: Across That Bridge: A Vision for Change and the Future of America
Bill's Favourite Book: How Innovation Works
As always you can follow Harry and The Twenty Minute VC on Twitter here!
Likewise, you can follow Harry on Instagram here for all things 20VC.
Howard Marks is the Co-Founder and Co-Chairman of Oaktree Capital Management, a leading investment firm with more than $120 billion in assets. Prior to founding Oaktree, Howard spent 10 years at The TCW Group, where he was responsible for investments in distressed debt, high yield bonds, and convertible securities. Previously, Howard was with Citicorp for 16 years, where he served as Vice President and senior portfolio manager in charge of convertible and high yield securities. Howard has also written two books, most recently Mastering the Market Cycle: Getting the Odds on Your Side, and it was Warren Buffet who said, "When I see memos from Howard Marks in my mail, they're the first thing I open and read. I always learn something."
In Today's Episode You Will Learn:
1.) How Howard first made his way into the world of finance over 50 years ago? How did not getting an investment banking job change the course of Howard's life?
2.) What does Howard believe is the fundamental economic crisis occurring today? How does Howard expect liquidity availability to change over the next few years? What analogies of prior downturns and recessions can we look to learn from? How does this downturn differ and align to prior recessions and downturns? What policies would Howard like to see governments enact to prevent the worst-case scenario?
3.) In conditions of such uncertainty, how does Howard think about how to manage and move forward with such volatility? What are Howard's frameworks and mechanisms to analyse crises events like this? Taking the analysis one level further, how bad does Howard believe this could get? If short of The Great Depression, are there scenarios that could lead there? What are the leading signals?
4.) Being proactive, how does today's situation change the mentality and activity at Oaktree? Why does Howard not agree with the notion of "the falling knife"? How does Howard think about market bottoms? How does Howard determine the right insertion point? Why does Howard believe the best investors are unemotional? How can one manage the psychology of catching a falling knife that falls further?
5.) What advice would Howard give to the may millions of working professionals today that have never seen a recession in their professional career? What makes Howard the most nervous when he looks at and assess the landscape today? What does Howard believe is the biggest misconception people believe with regards to the current economic crisis?
Items Mentioned In Today's Show:
Howard's Fave Book: Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
As always you can follow Harry, The Twenty Minute VC and Howard on Twitter here!
Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.
Howard Marks is co-chairman and co-founder of Oaktree Capital Management, a leading investment firm with more than $120 billion in assets. Prior to founding Oaktree, Howard spent 10 years at The TCW Group, where he was responsible for investments in distressed debt, high yield bonds, and convertible securities. Previously, Howard was with Citicorp for 16 years, where he served as Vice President and senior portfolio manager in charge of convertible and high yield securities. Howard has also written two books, most recently Mastering the Market Cycle: Getting the Odds on Your Side, and it was Warren Buffet who said, "When I see memos from Howard Marks in my mail, they're the first thing I open and read. I always learn something."
In Today's Episode You Will Learn:
1.) How Howard first made his way into the world of finance over 50 years ago? How did not getting an investment banking job change the course of Howard's life?
2.) Where does Howard think we are in the cycle today? What leads his thinking here? What is it crucial for all investors to remember at any point in the cycle? From a risk distribution and diversification perspective, does Howard believe now is a better or worse time to increase risk?
3.) Having worked through and been at the forefront of some of the most significant downturns of financial markets, what have been Howard's biggest learnings from seeing the booms and busts? How did it impact his investment mindset? At a point in 2008, Oaktree were deploying $600M per week for 15 weeks running, so how does Howard think about when is the right time to be aggressive vs when to pullback?
4.) How does Howard think about and assess his own price sensitivity? If there is one thing Howard wants to know to determine the right price, what is it? How does Howard believe we are seeing pro-risk mindsets alter investors attitude to price? How does Howard think about his right vs wrong and consensus vs non-consensus matrix?
5.) Howard and his Partner, Bruce have a very special relationship, what have they done to foster a relationship of radical intellectual honesty and that environment of safety? What are some things Howard will say to his team to encourage productive disagreement? What to Howard is the most important skill an investor can have is?
Items Mentioned In Today's Show:
Howard's Fave Book: Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
As always you can follow Harry, The Twenty Minute VC and Howard on Twitter here!
Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.
