Howard Marks on Getting the Odds in Your Side | Must watch for Young Investors
https://youtu.be/LIEi4PjfFv4
Howard Stanley Marks (born April 23, 1946) is an American investor and writer. He is the co-founder and co-chairman of Oaktree Capital Management, the largest investor in distressed securities worldwide. In 2020, with a net worth of $2.1 billion, Marks was ranked No. 391 on the Forbes 400 rankings of the wealthiest Americans.
Marks is admired in the investment community for his "memos", which detail his investment strategies and insight into the economy and are posted publicly on the Oaktree website. He has also published 3 books on investing. According to Warren Buffett, "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 book."
Marks focuses on risk management and says that investors should set investment strategy according to their personal situations and ask themselves whether they worry more about the risk of losing money or the risk of missing an opportunity. Marks believes that it is hard to gain an investment advantage through research since so many smart people are doing it already; the ways to get an 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. He hopes to have average returns during a bull market, while minimizing losses during bear markets due to his belief that losses do more harm than any benefit investors obtain from gains. Marks does favor using market timing strategies to have cash available to be invested during a downturn.Marks notes that it is important for investors to admit what they don't know instead of believing something is certain. He aims for a "high batting average" over "home runs".
Funds led by Marks have produced long term returns net of fees of 19% per year. Investors are primarily pension funds and sovereign wealth funds.
Citicorp...
From 1969 until 1978, Marks worked at Citicorp, first as an equity research analyst and then as the company's Director of Research. From 1978 to 1985, he served as a Vice President, as well as a senior portfolio manager overseeing convertible and high-yield debt. Citibank allowed him to move to Los Angeles in 1980.
TCW Group...
In 1985, Marks joined TCW Group where he led the groups that were responsible for investments in high-yield debt and convertible securities, and in 1988 he and Bruce Karsh organized one of the first distressed debt funds from a major financial institution. In 1995, he, Karsh, and 3 others decided to leave to start their own firm and petitioned TCW to let them continue managing the funds they managed at TCW, giving TCW a portion of the management fees; when TCW refused, the 5 partners left the company and founded Oaktree Capital Management in Los Angeles.
Oaktree...
After being founded in 1995, Oaktree grew rapidly, focusing on high-yield debt, distressed debt, and private equity.
During the financial crisis of 2007–08, Oaktree raised $10.9 billion, the largest distressed debt fund in history, to buy distressed assets, which "paid off richly for his investors".
In April 2012, Oaktree became a public company via an initial public offering on the New York Stock Exchange, raising $380 million by selling 8.84 million shares for $43 each.
In March 2019, Brookfield Asset Management acquired 62% of Oaktree. Marks and other members of Oaktree own 38% of the company and have full control of Oaktree's day-to-day operations.
Transcript
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