A Sea Change Is Happening: What Worked Then, Won’t Work Now w/ Howard Marks (TIP545)
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- เผยแพร่เมื่อ 15 พ.ค. 2024
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My guest today is illustrious Howard Marks, founder of Oaktree Capital which oversees $140B in AUM. Howard has become an investing legend through his consistent performance, his focus on contrarian assets and of course his memos. He is also known for his focus on risk management, and his approach to investing emphasizes the importance of understanding and managing risk in order to generate long-term returns.
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IN THIS EPISODE YOU’LL LEARN:
0:00:00 - Intro
0:00:37- His prediction that the financial markets are entering a Sea Change, the third such event he has seen in his over 50 year career.
0:10:56 - Why this Sea Change differs from normal market cyclicality
0:19:00 - How a more moderate interest rate environment affects global debt and his risk assessments
0:33:05 - How studies of Japan influenced his investing philosophies
0:42:14 - His thoughts on A.I., Bitcoin, Japan, and China
0:54:12 - And some personal insights as well
- Howard Marks Memos: www.oaktreecapital.com/insights
🖊️ Access the transcript and learn more about the guest here: www.theinvestorspodcast.com/e...
📖 BOOKS MENTIONED:
- Mastering the Market Cycle by Howard Marks: amzn.to/3KMohau
- The Most Important Thing by Howard Marks: amzn.to/3nWHltv
- Mistakes Were Made by Carol Tavris: amzn.to/40ZcxH9
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@@passiveaction Hi, this interview was recorded on April 6, 2023. Hope this helps!
4
Can you please bring Li Lu or Stanley Druckenmiller on the show. It's been quite a long time since they've given public interviews
If anyone has their contact info, we'd be happy to reach out and invite them. 🙂
Highly doubt Li Lu is willing to talk in podcasts. He seems very private.
Being able to listen to a man of Marks' professional knowledge of markets and economics is pure gold. I'm a 52 y.o. chef / restaurateur who worked and saved my way to a fortune. Howard Marks crystallizes what I feel to be true in the world today vis a vis economics, debt and asset prices. Things are crazy now, IMHO. Any monkey with a credit card and a loan can buy stuff now and that has pushed up prices of everything.
As Howard Marks says " I find it too good to be true , that we have a credit card that we never have to pay the balance on."
Howard is very careful to say anything sounding like a prediction which makes it a bit puzzling that he seems to accept the credit that he “accurately predicted” all these previous cycles. He is obviously a very successful investor who hasn’t blown up the accounts under his management but I’d say this is more reflective of prudence and good judgement than great skill in prediction.
👆 I have a friend who is a competitive chess player. I used to ask him how he seemed to know where I was going to move.
He said he just tries to put himself is the best position possible given what’s known at the time. He doesn’t try to guess what will happen in the future.
The most successful ppl have a process in place to keep themselves from overthinking it.
@@TheGbelcher That feels like a very misleading answer, considering in chess an extremely key element is to literally calculate explicit variations where you examine the outcome of given sequences of moves. Ie, a central element is tinking "What if I do this, they should respond with this, but then I can just do that which means they have to do that and that looks good for me".
So whilst he's not technically "guessing what you'll do", he is estimating what your best responses are and making sure that the move is the best possible considering your best responses. The difference is almost just semantics.
That is very different than a truly random game like investing where whatever you are playing against may not have a "best move".
This was a brilliant interview full of wisdom. This interview has a "time capsule" quality to it. 50 or 100 years from now the brilliance of the insights shared by Howard Marks will most certainly stand the test of time. Full marks to the interviewer as well who had clearly done his homework and was well prepared to ask excellent questions that elicited the brilliant responses from Mr. Marks.
Thank you so much for the kind words, Doug!
And something that I note to be very rare: the interviewer has the good judgement to allow the guest to speak without interuption and at length.
This allows the guest to follow his line of thought and is therefore very enlightening. It is rare to see these days where so much is churned out to cater for short attention spans.
I very much appreciate this, thank you.
And what a brilliant guest!!
The ease and inexpensiveness of getting an interview with one of the greatest is a sea change for sure. Thank you.
I am wondering if people even realize that the oak tree capital stock investors have not made any capital gain over decades. Buffet talks with great track record while some other big mouth talks all the time with no performance.
@@Edward-np4ih Not really. +600% in 10Y vs +30% of Ray Dalio’s) , whose popularity and accuracy oppose each other.
I never tire of listening to Howard Mark's, such a wealth of wisdom.
Excellent interview...what a cogent and balanced analysis, backed up with data and facts, that was!
What an excellent interview, thank you for providing great content 👏 👍
Great interview. Thanks for allowing your guest to speak without any interruptions. 👍👍👍
Thank you Mr Marks to share your wisdom and to be so patient with your listerns. Thanks guys for another great episode.
I came to understand what "you can't judge a good decision by its outcome" meant in my own way before I knew how to say it so succinctly. It all stems from life being unfair and how risk doesn't care about how prepare you are or not. On average risk hurts the right people, but there will always be victims of risk who got burned for reasons outside their control.
First interview I 've seen from this interviewer, usually its been Stig but I have to say you did a great job interviewing one of the best money managers of all time. You got out some great answers for him, touched current topics and more general concepts. Loved it!
Glad you enjoyed the interview, Tamim!
Every financial advisor should listen to this talk. Brilliant 👏 thank you!
This is so thought provoking interview. So good that it also have show how good is the interviewer. Great jobs Trey.
So glad you liked the episode!
Brilliant interview. It’s fascinating listening to Howard and understanding his perspective on things. I liked his views on interest rates remaining close to 0% for 8 years.
Really a great conversation, appreciate Howard taking the time to distill his earned wisdom Trey did a great job with this interview.
Thank you so much, Matt!
Phenomenal interview. Thank you both!
Thanks so much for tuning in!
Always ask, "Which policy decisions will produce the greatest power and wealth for the decision makers and their cronies?"
*The goal of all governments and all banking systems is to privatize profits and socialize losses. Always has been, always will be.*
“Lots of good years, maybe an occasional great year, but hopefully not a terrible one.” That’s pretty much a great investment plan.
🌟🌟Great Marks 🌟🌟
Mr Howard Marks is the one of the best. I've read to books from him and a few memos. Other great billionaires for your videos might be, Jeremy Grantham, Seth Kralman and Stanley Druckenmiller.
I like Mr Mark’s View on being a patient investor, it reminded me that Japan has such a long commitment to yield curve control.
Spot on with his analysis of the current national debt. We don't know when or how the impact will hit us, but we 100% know this monetary policy will absolutely crush us in the end. It's too good to be true on an individual level, it is the same on a national level.
Thanks for bringing Howard Marks to us. I always enjoyed his interviews. Ton of wisdom on market behavior
Thanks so much for watching!
This is a true gem of an interview! 👌Good job Trey! Keep it up and thank you!
Why was it. Gem? Guy just seemed to be a establishment talking point
Thoroughly enjoyed the quality of the investment wisdom. Thank you very much.
" You can't tell the quality of a decision from the outcome." -Howard Marks.
It's true...AI doesn't have instinct/intuition...or "gut feeling".
All the more reason to keep your microbiome healthy and your chakras humming! 😊
Excellent interview!
Fantastic guest accompanied by a great interviewer.
The flow of good conceptual questions followed by thoughtful and sincere answers from a Mr Marks, that brings intelligence, experience, common sense mixed with the taste of a good person. Very Enjoyable meeting. Thank you!
Glad you enjoyed it!🙌
Thankyou 🙏
You’re welcome!
Great book to refer to !
David Marks is the legend for me 14 year old BB rock star
I am Howard too ! But I don’t make stupid predictions !
You are a great host....one of the few who can shut up and let the guest talk!
I admire you for adopting a simple lifestyle
Incredible to watch 15 years later. Prters such a legend, he should have been in the big short.
Absolutely brilliant.
Thank you so much for tuning in!
When you have a genius talking, don't interrupt him. Impressed on you letting him talk. Drives me nuts when people interrupt.
Huuge follower of Howard Marks. Thanks for this treat! 👍
Cheers!
What a treat. Thank you!
Our pleasure, Eric!
THANK YOU.
Over the course of this year I have easily seen more than a hundred investment talks. I can definitely say that this is one of the best five I have seen so far.
Thank you so much for the kind words, David!
Can you possibly share the other 4?
@@MrsGG-id1os I would recommend the interviews to Ted Weschler, Todd Combs, Charlie Munger and one of the many talks of Monish Pabrai (I could not choose a single one but all). Those may be the other four.
Excellent
Thank you sharing your many years of experience.
Thanks so much for watching!
Thank you for the interview, it’s a pleasure to listen to it.
Thank you for watching, Amir!
This interview was so good. Mr. Marks is full of wisdom whilst being extremely humble. Thanks so much!
Our pleasure!
Amazing interview, thank you!👏👏👏
Glad you liked it, Eduardo!
Thank you so much Trey! this is a treasure
Glad you found it valuable!
What well of knowledge
Great teacher & tutorials, clear, simple w expertise!
Many thanks!
Great interview.
Thank you so much for tuning in, Joseph!
Thanks a ton, guys
A few people will always have access to non-public information giving them an edge.
Thank you for this interview. Could you ask M. Howrd Marks if he would buy gold and silver that W. Buffett avoids? Thank you again!
Didn't Buffet acquire a billion dollar position in silver? I'll have to check if he still has it... Edit: he bought it in '98 nice return there...
@@DiakronYT I was not aware that he has ever acquired silver. But in 2020 if I remember correctly , he bought Barrick Gold but liquidated all his holdings within three months!!! Thanks for your time.
You're doing great work. Glad i found your podcast.
Welcome aboard!
Great interview. Love the risk management questions. Maybe next time only show the person who’s talking on screen?
Good great points of views interesting
Great interview
Glad you enjoyed it!
A lot of time tested wisdom here.
Thanks so much for watching, Mark!
seems like with infinite variables in the global economy... control of the money supply is the paramount lever of change.
So ... This episode teaches me to understand behavior
Great insites. : )
He explained Soros's Theory of Reflexivity at 2:40
Ty team we study billionaires👏
I like Howard, not only is he very smart, he looks very presidential too. Too bad we don't have a President like Howard Marks.
Howard Marks has a special brain.
Thank you both! 👏
Our pleasure!
Brilliant man great show!
Thank you so much!
Never heard of him but I'll listen anyway.
thx
I'm a capitalist who also believes in fair market capitalism. All the money pouring into the pockets of Congress to change laws/regulations that only help...say...hedge fund managers or specific corporate verticals. Most business owners and/or investors don't have the resources to buy politicians.
Really great interview! Howard Marks is just a fountain of knowledge, but like he said at the end, its really the great questions that make this interview exceptional. My highest praise!
Glad you enjoyed it! Thank you so much.
"Two reasons people sell because they go up or because they go down" - third reason - my opinion - majority of non-billionaires sell because they have to/need money.
Wonderful discussion! Thanks so much for this.
Yeah, it's very perplexing to me how the stock market hasn't figured this out yet. We are literally only 12% off the mother of all FED induced liquidity bubbles, which saw the market increase 7 fold in the 12 years from 09'-2021. Now with monetary policy EXACTLY opposite, balance sheet being reduced, the buying of mortgage backed securities and bonds being reversed, and markets somehow see this environment as bullish....honestly, i cannot figure out what buyers of equities here are thinking.
Just recency effect, I guess!
excellent interview.
glad you liked it!
Please keep cherishing the wisdoms.
"If your home buys less stuff when you sell it than when you bought it, you lost purchasing power regardless of whether or not the price went up." -- George Gammon
"You don't fix a solvency problem with liquidity." -- Mark Yusko
Insurance companies will be the next shoe to drop, because they are very risk averse. They invest their premiums in commercial real estate and government bonds. AIG 2.0 is coming.
Great
From how market is developing, it looks like we will get into stagflation soon, what can we do to adjust if stagflation do happen?
When something is "uninvestable", there are opportunity in it.
In electronics we call it a relaxation oscillator. A lot of biological systems do the same thing.
His talk about risk reminding me of poker
What a swell guy! Marks really comes down to us. Hurrah for our capitalist heroes!
I once wrote a memo about that.
I was wondering about that too XD, but it all made sense when he said this at ~1:07:14 in the video:
"And you know, if you just say the words, you can gloss over the weaknesses in your argument.
But if you have to either write ’em down or create a graph which shows how things work,
then I think you’re called to a higher standard."
It's good to content on uncertainty, the unknown is something everyone struggle with. “Believe those who are seeking the truth; doubt those who find it” - Andre Gide, a sharp contrast with people displaying apparent overconfidence with statements such as "Only I can fix it". People may seek out the appearance of certainty in an uncertain world but this certainty being projected is just an illusion. “The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence.” ― Charles Bukowski
Howard is second only to Buffett in terms of investing wisdom.
So much brilliance here
So glad to hear that!
Always boss. Apreciate. But i would like he will return now and telll us wich part of the cycle are we today LoLLLLLL
Great interview. Marks is a great mentor for investors. And he admits that some decisions turn out to be pure luck. But I guess as he works hard, he also gets lucky often
Luck is the residue of hard work.
I believe that he has managed to get Howard Marks on 😂 Amazing
You cannot tell a decision from its outcome
Howard is super smart, and wise and has a very interesting thesis here and I think is probably right on the sea change.
It's painful to hear even someone as sophisticated as him so bastardize and misrepresent MMT by completely ignoring that MMT does not suggest you can print as much money as you want without consequence but rather that you have no financial consequence instead you have an inflationary consequence, which is the key focus on MMT guidance. "Forget about what you can afford, there's no limit on what you can afford. Instead focus on what inflation consequences you will create because that's the real limit"
does 0dte options have anything to do with what is happening in the markets?
Not the economy, but market moves could be amplified in the short run…
lived in china a few years,,loved this talk,,will look for your email
Intellectual humility and bravery accommodates that truth is constant under all terms and conditions. Our opinions may waver like shifting sands. The perfect perpendicular is truth. This is a human factor, not religious or cultural.
I Watch and read a lot about anything that has to do with investing and this is hands down one of the best and most interesting interviews I’ve seen in the past weeks.
Thanks for getting Marks to share his insights and investing philosophy and you sharing it with us.
Glad you enjoyed it!
This was a tad advanced for me, esp with brainfog today :(
But i most certainly enjoyed the bits i understood and this was an excellent interview that i will re-watch when i have learnt to understand financial terminology
Glad it helped!
Also, excesses are self-helping from those who buy because something went up so much, as the bitcoin buyers did.
Then some sell because it fell so much already.
The central criticism that I have of the proposed analysis is that it implicitly assumes that once one deviates from the trend, either due to a bullish or bearish cycle, one will tend to correct and eventually return to the original trend. But what would happen if the shock were extremely strong, I am thinking of a great depression, which would deviate us strongly from the cycle and eventually make us enter to a completely new trend, much more recessive than the previous one? This could be due to a debt crisis, banking and financial crisis, deep war , etc. I think this point is not addressed by Mr. Marks, probably because he implicitly assumes that this event has zero probability of occurrence. I would like to hear some feedback in this regard. Thanks !
Awesome video!
Glad you enjoyed it!