Howard Marks

The Calculus of Value

Written on a plane without Wi-Fi, Marks develops a framework for thinking about how to value companies in an era of transformative technology and disrupted business models. The calculus of value — assessing what a company is truly worth given its earnings power, growth prospects, and competitive position — remains the foundation of sound investing regardless of market conditions or technological disruption.

On Bubble Watch

On the 25th anniversary of 'bubble.com,' Marks examines whether today's AI-driven market constitutes a bubble. His framework: a bubble requires not just high valuations but psychological excess — universal conviction that prices can only go higher. While he sees elevated valuations and concentrated enthusiasm, he stops short of declaring a full bubble, preferring to remain on watch rather than sound a definitive alarm.

Nobody Knows Yet Again

Revisiting 'Nobody Knows' from 2008 in the context of 2025's uncertainty — tariffs, geopolitical risk, AI disruption, and fiscal pressures — Marks argues that the epistemological lesson is timeless. At moments of maximum uncertainty, the greatest risk is pretending to certainty you don't have; the appropriate response is positioning for multiple scenarios with adequate margins of safety.

More on Repealing the Laws of Economics

A sequel to 'Shall We Repeal the Laws of Economics,' prompted by the tariff and trade policy debates of 2025. Marks reinforces his argument: governments can temporarily override economic laws, but the costs always materialize eventually, often falling on those least able to bear them. The laws of supply, demand, and incentives are not optional.

Is it a Bubble

Applying his classic bubble-identification framework to the AI investment boom, Marks concludes that while the technology is real and transformative, the investment environment shows several hallmarks of speculative excess: surging valuations, extraordinary capital flows, and widespread conviction that the winners are already obvious. He stops short of calling it a full bubble but urges careful attention to price.

Gimme Credit

In response to the most frequently asked client question of the past several years — about credit and private credit in particular — Marks makes the case for credit investing in the post-sea-change environment. With rates meaningfully higher, high yield bonds and private credit offer genuinely attractive risk-adjusted returns that were unavailable during the zero-rate era.

Cockroaches in the Coal Mine

Citing Jamie Dimon's 'antenna goes up' comment about bankruptcy filings in auto parts and subprime lending, Marks argues that early stress signals in marginal sectors deserve serious attention. Like the canary in the coal mine, these cockroaches may be warning of broader credit deterioration — and investors who ignore them because things still look fine at the top of the market do so at their peril.

A Look Under the Hood

Attending a state pension fund board meeting as a participant in their investment process, Marks observes firsthand the governance challenges facing institutional investors: how boards make decisions, how consultants present information, and where the gaps between stated process and actual practice tend to appear. The experience generates practical observations about investment committee effectiveness.

The Indispensability of Risk

Using a Wall Street Journal article about chess — where sacrifice is not recklessness but calculated strategy — Marks argues that risk is indispensable to investment success. Those who refuse all risk earn the risk-free rate; genuine outperformance requires accepting intelligently selected risks while avoiding the risks that can permanently impair capital.

The Impact of Debt

Debt is the great amplifier: it magnifies gains in good times and losses in bad times, and it transforms manageable problems into existential crises for those who have borrowed too much. Marks examines the role of debt at every level — individual, corporate, and sovereign — and its implications for the investment environment, drawing on Morgan Housel's writing on practical financial philosophy.

The Folly of Certainty

Certainty is almost always misplaced in investing, yet investors and commentators constantly express it. Marks argues that admitting 'I don't know' is not a weakness but a sign of intellectual honesty and good epistemics. The investors who claim the most certainty are usually the least equipped to handle the surprises that the unknowable future reliably delivers.

Shall We Repeal the Laws of Economics

Politicians across the spectrum — from tariff advocates to grocery-price controllers — make promises that ignore or override the laws of economics. Marks argues that economies are organic systems governed by real principles — supply and demand, incentives, tradeoffs — that cannot be suspended by political will, only deferred, with the costs accumulating until reality reasserts itself.

Ruminating on Asset Allocation

Following client conversations in Australia about the sea change in interest rates, Marks develops a unified framework for asset allocation: the appropriate mix of assets depends on the current level of prospective returns in each category, the investor's risk tolerance and time horizon, and an honest assessment of where we are in the cycle — not historical averages or mechanical rules.

Mr Market Miscalculates

Benjamin Graham's 'Mr. Market' metaphor remains the best description of market psychology ever devised. Mr. Market offers to buy or sell at prices that often diverge wildly from intrinsic value, and the disciplined investor's task is to take advantage of these miscalculations — buying when Mr. Market is excessively fearful and selling when he is irrationally exuberant.

Easy Money

The history of easy-money episodes — from the South Sea Bubble to the dot-com era to the post-2008 zero-rate environment — reveals a consistent pattern: when money is cheap and plentiful, investors take more risk, standards decline, and the eventual tightening produces losses for those who borrowed at the wrong time to buy the wrong assets.

Taking the Temperature

Prepared for a 'Lunch with the FT' interview, this memo reviews five market calls Marks made between 2000 and 2020 that proved correct. More importantly, it reflects on what made those calls possible: not superior forecasting of macroeconomic outcomes, but a disciplined read of where investor psychology and market pricing stood relative to fundamentals.

Lessons From Svb

The failure of Silicon Valley Bank is less about predicting further bank failures and more about its broader implications: it may amplify the credit tightening already underway, increasing the probability of a harder economic landing. Marks examines what SVB's collapse reveals about duration risk, deposit concentration, and the fragility of institutions that manage risk poorly.

Further Thoughts on Sea Change

A follow-up to 'Sea Change,' originally shared only with Oaktree clients, arguing that the transition from 40 years of declining rates to a higher-rate environment represents a sweeping and durable alteration of the investment landscape. The implication: the return-free risk of the zero-rate era is over, and credit now offers genuinely attractive risk-adjusted returns for the first time in years.

Fewer Losers More Winner

Inspired by David VanBenschoten's General Mills pension fund, which achieved 4th-percentile 14-year performance by never ranking below the 47th percentile annually, Marks argues that consistent avoidance of disasters produces better long-term results than swinging for the fences. The mathematics of loss avoidance — avoiding large negatives that require enormous subsequent gains just to break even — is the foundation of his investment philosophy.

What Really Matters

Rather than answering the unanswerable questions — when will inflation peak, how high will rates go, will there be a recession — Marks asks what really matters for long-term investment performance. His answer: understanding intrinsic value, knowing where we are in the cycle, maintaining the right temperament, and having the courage to act contrary to consensus when the evidence supports it.

The Pendulum in Intl Affairs

Marks applies his pendulum framework to international affairs, arguing that geopolitical attitudes — toward globalization, multilateralism, free trade, and international cooperation — swing between extremes just as investor sentiment does. The current swing toward nationalism and protectionism will eventually reverse, but understanding where the pendulum is helps investors prepare for what comes next.

Selling Out

Despite being an inescapable part of the investment process, selling receives far less attention than buying. Marks examines when to sell: when price exceeds value sufficiently to justify the tax and reinvestment costs, when a better opportunity exists for the same capital, or when the original investment thesis has been proven wrong. Getting selling right requires the same analytical discipline as buying.

Sea Change

In 53 years of investing, Marks has seen only two genuine sea changes: the inflationary 1970s giving way to disinflation, and the volatility regime change of the 1990s. He believes we may be in the midst of a third: the shift from the 40-year era of declining interest rates to a world where rates are higher and credit is more expensive, reshaping the risk-return tradeoffs of every asset class.

Panmure House

In a video interview recorded at Panmure House, the final home of Adam Smith, Marks explores the Market Mind Hypothesis and how cognitive patterns explain market behavior. The transcript of the conversation covers the pendulum, investor psychology, cycle theory, and why emotional intelligence is as important as analytical intelligence for investment success.

Illusion of Knowledge

The illusion of knowledge — the belief that sophisticated models, large data sets, and rigorous analysis confer genuine insight about the future — is one of the most dangerous traps in investing. Marks explains why macro forecasting is inherently difficult: the economy is a complex adaptive system with too many variables, feedback loops, and human behavioral elements to yield reliable predictions.

I Beg to Differ

Marks respectfully disagrees with the dominant view that the Nifty Fifty growth stocks of the early 1970s were uniquely overvalued and the lesson is to avoid growth at high prices. His contrarian reading: the real lesson is about the interaction between business quality, price paid, and holding period — a more nuanced framework than simple 'growth is risky at any price.'

Bull Market Rhymes

History doesn't repeat itself but it does rhyme. Marks traces the recurring patterns of bull markets — rising confidence, expanding valuations, deteriorating standards, and eventual correction — not to predict when the next correction will come but to help investors recognize where they are in the cycle and position accordingly.