All Memos
159 memos spanning 1990–2026. Each memo is cross-referenced with investment concepts, funds mentioned, and key figures.
Early Memos
1990–2006 · 47 memosThe Route to Performance
Superior investment performance cannot be achieved by doing what everyone else does — consensus behavior produces consensus results. Howard Marks argues that genuinely superior returns require non-consensus thinking: the investor must not only form a view that differs from the crowd but must also be right, a combination that is rarer and harder than it appears.
First Quarter Performance
The mood swings of securities markets resemble a pendulum, spending very little time at the midpoint and far more time swinging between the extremes of euphoria and depression. The negative extreme of 1990, when credit markets were gripped by fear and high-yield bonds traded at distressed prices, created the extraordinary buying opportunity that produced Oaktree's outstanding first-quarter 1991 returns.
Microeconomics 101 Supply Demand and Convertibles
Two factors determine investment success: the intrinsic quality of the underlying entity and — equally important — the price paid relative to value. Marks argues that even a superior company is a poor investment at the wrong price, and that the price-to-value relationship is where investors most consistently go wrong, confusing asset quality with investment quality.
The Value of Predictions or Whered All This Rain Come From
The expected value of a macro forecast equals the value of a correct prediction multiplied by the probability of being right — and because forecasters are right far less often than they claim, the math rarely justifies acting on predictions. Marks concludes that correct forecasts do not reliably translate into superior investment results even when they happen to be accurate.
How Does an Inefficient Market Get That Way
Markets become inefficient when participants fail to act objectively and dispassionately, allowing psychological biases — fear, greed, overconfidence — to drive prices away from intrinsic values. The inefficiency that creates opportunities for skilled investors is not random noise but a systematic product of human emotion overriding economic rationality.
How the Game Should Be Played
The founding philosophy of Oaktree, articulated at its launch in 1995, centers on a simple asymmetric goal: if we avoid the losers, the winners take care of themselves. Superior long-term returns come not from swinging for home runs but from consistency, risk control, and the discipline to stay within a well-defined circle of competence.
The Value of Predictions Ii or Give That Man a Cigar
A follow-up empirical study of Wall Street Journal expert forecasts finds that the average forecaster could not predict six-month interest rate levels within 96 basis points. The data confirms Marks' earlier argument: macro forecasting adds little value, and investors who rely on predictions are building on a foundation of sand.
Will it Be Different This Time
Cyclicality is one of the few true constants in economics and markets. The arguments that always accompany market peaks — that structural change, new technologies, or altered fundamentals mean the usual correction need not occur — almost invariably prove to be rationalizations for prices that have simply gone too far.
Are You an Investor or a Speculator
The critical distinction between investing and speculating lies in whether the price paid bears a disciplined relationship to underlying value. Many participants Marks observed in 1997 were buying with euphoria and momentum rather than with hesitance and skepticism — behavior that defines speculation regardless of the quality of the assets being purchased.
Genius Isnt Enough and Other Lessons From Long Term Capital Management
Long-Term Capital Management demonstrated that genius cannot overcome the combination of extreme leverage and fat-tail risk. Probabilistic models failed to make sufficient allowance for improbable but real disasters, and the firm's collapse showed that intellectual brilliance combined with hubris produces outcomes worse than modest competence combined with prudence.
Who Knew
For years Marks had warned about overvalued markets without knowing what would trigger a correction. The 1998 market turmoil confirmed his core insight: it is most prudent to be optimistic when no one else is, and most dangerous to be optimistic when everyone else is — regardless of whether you can identify the specific catalyst for change.
Hows the Market
Using a single ordinary 1999 bull-market day — record gains, euphoric commentary, stocks rising on no news — Marks illustrates the collective delusion that characterizes market tops. When every day's gains feel inevitable and stocks seem to have no downside, the conditions for a severe correction are precisely what is being created.
Bubblecom
The Internet revolution is real, but revolutionary technology rarely generates proportional returns for early investors when prices already reflect decades of optimistic growth. Drawing on the history of the South Sea Bubble, Marks argues that the dot-com mania of 2000 fits the classic pattern: genuine innovation hijacked by speculative excess that bears no relationship to intrinsic value.
Investment Miscellany
In the aftermath of the dot-com peak, Marks collects observations on the collapse of momentum investing, the humbling of venture capital, and the return of traditional value principles. The episode that crested in March 2000 was arguably the greatest bubble in history, and its aftermath illustrated why traditional valuation disciplines exist in the first place.
Irrational Exuberance
Marks is not ringing the bell on stock prices but on a style of investing without reason — buying story stocks at any price on the assumption that growth justifies all. The Internet era demonstrated that when price discipline disappears and narrative replaces analysis, even genuine technological revolutions can produce devastating investment losses.
Were Not in 1999 Anymore Toto
Like Dorothy discovering that Oz was a fantasy, investors in 2000-01 found that the extraordinary world of 1999 — where valuations did not matter, money was printed effortlessly, and skeptics were dismissed as dinosaurs — had evaporated with remarkable speed. The excesses were remedied faster than Marks anticipated, validating the inevitability of mean reversion.
Notes From New York
Written in the immediate aftermath of September 11, 2001, Marks reflects not on the events themselves but on the profound uncertainty they created about the future. The attacks demanded intellectual humility: honest acknowledgment that the investment implications were deeply unknowable, and that the answers would likely look very different from what they would have been a week earlier.
Safety First but Where
The 1990s witnessed a generational shift away from traditional investment virtues — fiduciary duty, capital preservation, dividend yield — toward momentum and speculation. Marks argues that the pendulum had swung too far: people forgot that what you pay is no less important than what you buy, a principle that the market was about to reassert with force.
What Lies Ahead
Investing consists entirely of divining the future and translating it into prices to be paid today. The September 2001 attacks made an already uncertain future more so, requiring not pessimism but appropriate caution about a world in which outcomes that seemed impossible a week earlier had suddenly become real possibilities.
Whats it All About Alpha
Alpha — genuine risk-adjusted outperformance — can come only from exploiting information advantages or behavioral biases, not from taking more systematic risk. Marks traces the University of Chicago's efficient-market framework and argues that the 'I don't know' school of investing, which accepts uncertainty rather than pretending to predict the future, is better positioned to generate true alpha than confident macro forecasters.
You Cant Predict You Can Prepare
You cannot predict the timing, magnitude, or shape of market cycles, but you can know where you stand in one and position your portfolio accordingly. Marks argues that this distinction — between prediction and preparation — is the key to navigating uncertainty: not guessing what comes next, but understanding the current environment and building in appropriate margins of safety.
Etorres Wisdom
A story about a bicycle racer who refused to move aside when losing ground serves as Marks' metaphor for investor psychology: just as the racer denied the plain evidence in front of him, investors routinely rationalize away obvious warning signs when optimism and momentum are running high. Recognizing this tendency is the first step toward avoiding its consequences.
Learning From Enron
Enron's collapse illustrated how financial innovations designed for legitimate purposes — off-balance-sheet vehicles, mark-to-model accounting — were repurposed to create a distorted and fraudulent picture of reality. The common thread was that each mechanism served Enron's interests rather than investors', revealing a fundamental breach of the trust that financial reporting depends on.
Quo Vadis
In the depths of the 2001-02 bear market, Marks resists the temptation to predict when and how recovery will come. There is no conclusive signal that the market has bottomed; the future remains a mystery, and short-term fluctuations tell us nothing reliable about what comes next. Patient preparation, not prediction, is the appropriate response.
Returns and How They Get That Way
Equity returns come from earnings growth, multiple expansion, and dividends — a chain of cause and effect that can be analyzed and assessed. Understanding the source of historical returns is essential for evaluating whether they are likely to persist: the dangerous alternative is buying stocks on the assumption that new buyers will always be willing to pay more than the last price.
The Realists Creed
Investing must be grounded in a firmly held, internally consistent belief system that neither expects too much of the future nor is paralyzed by uncertainty. Marks argues that the realist's creed — acknowledging what can and cannot be known, accepting cyclical impermanence, and acting on high-conviction insights rather than consensus — is the only durable foundation for long-term investment success.
The Feelings Mutual
The 2003 mutual fund scandal revealed that fund companies had allowed favored clients to engage in 'timing' and 'late trading' that siphoned returns from ordinary long-term shareholders. These practices — industry-wide and systematic — constituted a fundamental betrayal of the stewardship obligation that every investment manager owes to the clients whose capital they hold in trust.
The Most Important Thing
Price is the starting point for all intelligent investment analysis: no asset is so good that it cannot become a bad investment at too high a price, and no asset so bad that it cannot be a good investment at a low enough price. Marks collects in one memo the precepts that guide Oaktree — second-level thinking, risk control, value orientation — arguing that each is 'the most important thing' because all are indispensable.
Whadya Know
There is no such thing as net selling in markets: for every seller there must be a buyer, and cash does not 'build up' on the sidelines waiting to enter. Marks attacks the many misconceptions that pervade investment commentary, arguing that sound analysis requires understanding basic market mechanics that conventional wisdom consistently gets wrong.
Whats Going on
The three years following the dot-com crash produced a sweeping paradigm shift in institutional investing: lower return expectations, new allocations to alternatives, and a rediscovery of risk management and capital preservation. Marks argues that these changes represent a healthy and necessary correction to the reckless optimism of the 1990s, resetting the terms on which capital is deployed.
Whats Your Game Plan
Investment success is not about hitting home runs but about avoiding strikeouts and inning-ending double plays. Oaktree's game plan — focusing on the downside, seeking asymmetric payoffs, and maintaining discipline through cycles — reflects Marks' conviction that consistency and loss avoidance beat the home-run approach over any market cycle.
Hedge Funds a Case for Caution
The hedge fund industry in 2004 was following the classic pattern that destroys every 'silver bullet': exceptional early performance attracted far too much capital, which diluted returns, forced managers to accept inferior opportunities, and spawned a wave of undisciplined start-ups. Marks warns that the combination of too much money chasing too few good ideas never ends well.
Hey Steward
The investment manager's primary obligation is stewardship of other people's assets — acting in clients' interests even when doing so conflicts with the manager's own interests. The mutual fund scandal demonstrated how easily this obligation is forgotten when asset gathering and fee income take priority over the people whose wealth is supposedly being managed.
Risk and Return Today
With the riskless rate near 1% in 2004, expected returns on all asset classes were compressed to historically low levels. Investors could either accept lower returns or reach for yield by taking more risk — but they could not have both high returns and safety in an environment where the starting point for all return calculations had been pushed artificially low.
The Happy Medium
Thirteen years after his original pendulum memo, Marks revisits the metaphor and finds it as valid as ever: investor psychology oscillates between extremes of optimism and pessimism, spending very little time at the balanced middle. The challenge for the thoughtful investor is to resist the gravitational pull of crowd sentiment and maintain equilibrium when markets are at their most extreme.
Us and Them
The investment world divides into the 'I know' school — which confidently forecasts macro events and moves in and out accordingly — and the 'I don't know' school, which accepts uncertainty and focuses on value and fundamentals. Marks argues that the epistemic humility of the latter group is not a weakness but a genuine edge that produces better long-run outcomes.
A Case in Point
The rise and fall of convertible arbitrage illustrates the recurring pattern by which a sound investment strategy is destroyed by its own success: early outperformance attracts capital, which compresses spreads, forces lower-quality trades, and ultimately produces losses for late-arriving investors who paid too much for a crowded opportunity.
Hindsight First Please or What Were They Thinking
John Kenneth Galbraith's 'extreme brevity of the financial memory' explains why investors repeatedly lose money in the same ways: they forget that cycles are inevitable, that there is no free lunch, and that the lessons of the past are ignored at their peril. Churchill's dictum — the further back you look, the further forward you can see — is the antidote.
Oaktree at Ten
On its tenth anniversary, Oaktree reflects on building a firm around investment philosophy and professional principles rather than a business plan or profit projection. The priorities established at founding — philosophy first, people second, process third, performance fourth — have remained constant through a decade of changing markets, and Marks believes they are the source of Oaktree's durability.
There They Go Again
Financial memory is so brief that investors repeat the same speculative mistakes with remarkable regularity. Galbraith's observation — that the extreme brevity of financial memory causes each new generation to mistake aggressive risk-taking for innovation — explains why bubbles recur, and why the warning signs of excess are almost always visible to those willing to look.
Dare to Be Great
Achieving outstanding investment results requires institutional clients willing to take genuinely differentiated positions and managers with the courage to be non-consensus. The trap most institutional investors fall into — preferring the safety of consensus decisions that protect careers over bold decisions that serve beneficiaries — ensures average results at best.
It is What it is
The starting conditions of any investment environment — interest rate levels, valuations, credit spreads — determine what returns are actually achievable, regardless of what investors wish for or what they achieved in the past. Accepting the world as it is, rather than as we would prefer it to be, is the prerequisite for making sound investment decisions.
Pigweed
Investor sentiment toward a security is almost perfectly correlated with its recent price performance rather than its underlying value. The same asset celebrated at $75 as 'Schlumberger' becomes despised as a 'slum-burger' at $15 — and yet the intelligent investor knows that the best opportunities arise precisely when sentiment is most negative and prices most distressed.
Returns Absolute Returns and Risk
The obsession with labels in investing — growth stocks, absolute return, hedge funds — causes investors to pay for narrative rather than value. History shows that virtually every supposedly superior investment category has produced catastrophic losses at some point; the only reliable protection is rigorous analysis of price relative to value, independent of whatever story is currently fashionable.
Risk
Risk is best understood not as volatility — the academic's preferred measure — but as the probability of permanent capital loss. The goal of sound risk management is to construct portfolios with asymmetric characteristics: limited downside when things go wrong and full participation when they go right. This requires discipline, judgment, and the willingness to forgo some upside in exchange for genuine protection.
The New Paradigm
Every financial bubble generates 'new paradigm' thinking — arguments that structural changes in technology, demographics, or monetary policy mean that traditional valuation rules no longer apply. Marks argues that these arguments always prove false: the new paradigm of one decade becomes the cautionary tale of the next, and the principles of supply, demand, and value always reassert themselves.
You Cant Eat Irr
Internal rate of return (IRR) is a deeply misleading performance measure for private investments because it assumes reinvestment of all cash flows at the same rate — an assumption almost never met in practice. Dollar-weighted returns, which reflect actual investor experience including the timing and magnitude of capital flows, are what investors actually earn and what should be used to assess performance.
Crisis Era
2007–2010 · 27 memosEveryone Knows
Investing is paradoxical: the things that seem most obvious — on which the entire consensus agrees — are almost never where profits lie, because consensus views are already fully priced. True edges come from correct non-consensus thinking, which by definition requires the investor to believe something that most market participants consider wrong or implausible.
Its All Good Really
An addendum to 'It's All Good,' written as the credit crisis began to surface in summer 2007, faster than Marks had anticipated. The memo illustrates that while it is difficult to know when a market extreme will correct, the pendulum always swings back — and once excessive optimism has set the stage, all that is needed is a catalyst, which cannot be predicted in advance.
Its All Good
By mid-2007, the credit markets had reached an extreme of optimism: standards were deteriorating, risk was being ignored, and assets at every risk level were priced as if nothing could go wrong. Marks clearly documented these excesses and the inevitability of a correction, while honestly acknowledging that he could not predict when the pendulum would reverse.
No Different This Time the Lessons of 07
The financial crisis of 2007-08 confirmed once more that the argument 'this time is different' — used to justify ignoring valuation extremes and deteriorating credit standards — always proves wrong. The recurring lesson is that excesses built over years through optimism and leverage are eventually corrected, regardless of how loudly participants insist that the usual rules no longer apply.
Now Its All Bad
Just seven weeks after 'It's All Good,' market sentiment had reversed to near-total pessimism — demonstrating how quickly and completely the pendulum can swing and how extreme the reversals can be. Marks marvels at the speed and severity of the turn, noting that the fear now visible in credit markets had been entirely absent just weeks before.
The Race to the Bottom
When lenders compete for business by loosening standards rather than improving their products, a race to the bottom ensues that inevitably ends in crisis. Written prophetically in early 2007, this memo documented the reckless deterioration in credit terms, covenants, and underwriting discipline that set the stage for the 2008 collapse, before most participants recognized the danger.
Doesnt Make Sense
Investors are not the rational, unemotional computing machines of academic theory — they make faulty decisions, fall for frauds, and swing between irrational extremes with startling regularity. Marks catalogs the many things in business and investment that simply don't make sense, arguing that understanding human irrationality is as important as understanding financial fundamentals.
Nobody Knows
At the peak of the 2008 financial crisis, Marks refuses to pretend certainty about an inherently unknowable situation. Nobody — regardless of credential or confidence — knows the true significance of these events or what comes next; the appropriate response is epistemic humility and the recognition that opinions and knowledge are not the same thing.
Now What
The boom-to-bust cycle that produced the 2008 crisis follows a well-understood pattern: excessive optimism, loosening standards, leverage buildup, and inevitable correction. Marks steps onto unfamiliar ground by looking forward, arguing for cautious optimism about a recovery whose timing remained deeply uncertain but whose eventual arrival was not.
Plan B
The financial crisis forced a shift from Plan A — reliance on free markets to self-correct — to Plan B: TARP and massive government intervention. Marks examines the logic and limitations of the bailout, acknowledging that while the free-market approach had clearly failed, the costs and unintended consequences of government rescue would shape the economy for years.
The Aviary
Three 'birds of a feather': the credit crisis as an unmistakable signal of where the market pendulum had swung, the lessons from the 2007 race to the bottom now confirmed in real time, and the role of leverage in transforming modest asset declines into catastrophic institutional losses. Together they tell a unified story of how the crisis developed.
The Limits to Negativism
At the most extreme point of the 2008 panic, Marks argues that pessimism itself has become excessive and that the limits of negativism have been reached. Just as runaway optimism creates selling opportunities, extreme fear creates buying opportunities — and the investor who can resist the gravitational pull of panic will find assets available at prices impossible just months earlier.
The Tide Goes Out
Warren Buffett's observation — 'when the tide goes out, we find out who's been swimming without a bathing suit' — perfectly describes the 2008 crisis. The years of easy credit and high leverage had allowed many institutions to appear sound; the crisis exposed those who had relied on liquidity, complexity, and optimistic assumptions that evaporated under stress.
Volatility Leverage Dynamite
Volatility plus leverage equals dynamite: a modest decline in the value of a leveraged portfolio can produce catastrophic losses, margin calls, and forced selling that accelerates the decline. The financial crisis was fundamentally a leverage crisis, and Marks revisits his 1994 formula to explain why the combination that had seemed manageable for years suddenly became devastating.
What Worries Me
Beyond the immediate crisis, Marks' deeper worries concern long-term structural risks: America's fiscal trajectory, political dysfunction, declining savings, and the world his children and grandchildren will inhabit. These are not short-term investment concerns but civilizational challenges that no amount of monetary policy can resolve.
Whodunit
The subprime crisis had many culprits — originators who issued unsound loans, rating agencies who mis-rated them, investors who bought without due diligence, and regulators who looked away. Marks concludes that the entire system failed collectively, not just any single actor, and that understanding this distributed responsibility is essential for preventing recurrence.
So Much Thats False and Nutty
As Buffett observed at the 2009 Berkshire meeting, modern investing practice is full of false beliefs and nutty behavior. Looking back at the crisis, Marks argues that a return to first principles — understanding what you own, why you own it, and what it is worth — is both the lesson of the crisis and the foundation of sound investing going forward.
The Long View
Two mastered concepts are the foundation of long-term investment success: intrinsic value and the cycle. When prices fall below intrinsic value, it's generally a buy; when they rise above it, a sell. Marks takes the longest view possible, arguing that the 2008-09 crisis, while severe, is one episode in a long history of cycles that always ultimately correct.
Touchstones
Using the great quotations and images of the financial crisis as touchstones — 'greed is good,' the tide going out, swimming without a bathing suit — Marks synthesizes the causes and lessons of what happened into a coherent narrative. These adages endure because they capture timeless truths about markets, human nature, and the inevitability of cycles.
Will it Work
When Marks' son asked whether Tim Geithner's crisis policies would work, Marks found the question unanswerable with confidence. Unlike engineering, where physical laws govern outcomes, economic policy operates in a system of staggering complexity with no guaranteed solutions — honest uncertainty is the only intellectually defensible response.
All That Glitters
Using the 'Whiskey Speech' — which argued both for and against whiskey depending on the audience — as a metaphor, Marks illustrates how investors engage in motivated reasoning about speculative assets, emphasizing whatever supports the conclusion they have already reached. All that glitters is not gold, and recognizing when you are rationalizing rather than analyzing is a critical investment skill.
Hemlines
Investment styles oscillate like pendulums between extremes — growth versus value, active versus passive, liquid versus illiquid — driven more by recent performance than by fundamental merit. History rhymes even when it doesn't repeat, and investors who can recognize where a pendulum is in its arc will have a meaningful advantage over those swept along by momentum.
Its Greek to Me
Using a parable about 'Sam' — the brightest, most successful person in town who has been spending more than he earns for years — Marks frames the Greek fiscal crisis as a warning about the consequences of persistent deficit spending. When the math finally catches up with governments, the adjustment is painful and unavoidable.
Id Rather Be Wrong
Marks would rather be wrong about the dangers of political dysfunction than right. The inability of democracies to make difficult but necessary fiscal choices — cutting spending, raising taxes, reforming entitlements — represents a systemic long-term risk that no short-term investment strategy can offset.
Open and Shut
Capital markets oscillate between 'open' — when credit flows freely and almost anyone can borrow on generous terms — and 'shut' — when credit is unavailable at almost any price. The 2008-09 shutdown was among the most extreme ever witnessed, confirming Marks' long-standing argument that the pendulum swings apply as much to credit availability as to asset prices.
Tell Me Im Wrong
Marks lays out his list of macro worries in detail — fiscal imbalances, political paralysis, structural unemployment, low savings — and invites readers to tell him he is wrong. A worrier by temperament, he acknowledges his bias but argues that the concerns are real, specific, and underappreciated by markets that had recovered sharply from 2009 lows.
Warning Flags
Investors face two primary risks: losing money and missing opportunity. The persistent failure of investor psychology is to obsess about the wrong risk at the wrong time — fearing loss at market bottoms when buying is optimal, and fearing missed gains at market tops when caution is warranted. Recognizing which risk deserves attention at any given moment is a central task of investment management.
Post-Crisis Era
2011–2019 · 58 memosDown to the Wire
The U.S. debt ceiling drama of 2011 illustrated a broader dysfunction: entrenched political positions preventing resolution of problems that everyone agrees must be addressed. The pattern — a crisis everyone sees coming, a deadline that creates urgency, and political paralysis that delays action until the last possible moment — has become a recurring feature of American governance.
How Quickly They Forget
Warren Buffett's observation that 'last year's weeds are this year's flowers' perfectly captures the rapid reversal of investor sentiment toward high-yield bonds between 2009 and 2011. What was despised and distressed at the bottom became sought-after and fully priced at the top — demonstrating how short financial memory is and how quickly opportunity turns to risk.
Its All Very Taxing
The failure of the Congressional supercommittee to reach a deficit reduction agreement illustrated the political reality that necessary but painful fiscal choices — cutting spending, raising taxes — are almost impossible to make until crisis forces the issue. Marks observes this pattern with concern, noting that deferral only makes the eventual adjustment more severe.
On Regulation
Financial regulation follows the same pendulum pattern as everything else in markets: insufficient before crises, excessive after. Marks argues that the post-2008 regulatory response was likely to overshoot, creating compliance burdens, reducing risk-taking beyond what is socially optimal, and generating unintended consequences that would take years to fully manifest.
Whats Behind the Downturn
The mid-2011 market downturn illustrated a pattern Marks has observed throughout his career: investors flip almost instantaneously from focusing exclusively on positives to focusing exclusively on negatives, driven not by changes in fundamentals but by changes in sentiment triggered by exogenous events. The speed of these reversals never ceases to astonish.
A Fresh Start Hopefully
Following the 2012 presidential election, Marks reflects on political polarization and America's structural challenges. Staying deliberately non-partisan, he argues that the country's real problems — fiscal imbalances, entitlement costs, infrastructure decay — require honest conversation and genuine compromise rather than the tribal combat that dominates political discourse.
Assessing Performance Records a Case Study
Accurately assessing investment performance requires a record spanning many years, including both favorable and unfavorable periods, measured against a relevant benchmark. Short records in bull markets prove nothing about skill; only sustained performance through complete cycles — including the inevitable periods of underperformance — reveals whether a manager has genuine edge.
Déjà Vu All Over Again
History is one of the investment manager's greatest assets, and Marks draws on five decades of market experience to show how patterns recur with remarkable regularity. The great quotations that populate his memos — Twain, Galbraith, Buffett — endure because they capture eternal truths about human nature and markets, making them as relevant today as when first written.
Its All a Big Mistake
Every investment transaction has a counterparty who believes the opposite. Superior investing is not about avoiding mistakes entirely but about making fewer of them than the other side — being right more often than wrong in a field where everyone, including the best investors, will be wrong a meaningful percentage of the time.
On Uncertain Ground
The world seems more uncertain in 2012 than at any other point in Marks' career — surpassing even the Cold War, the inflation of the 1970s, and the dot-com crash. When uncertainty is this high, the appropriate response is not paralysis but heightened caution, wider margins of safety, and genuine humility about the limits of what can be known.
What Can We Do for You
There are two kinds of investment managers: those who cannot achieve superior results and those who don't know they cannot. Oaktree has always been brutally honest about what it can offer — consistent application of disciplined principles, defense against catastrophic losses, and participation in recoveries — and what it cannot: perfect timing or top decile performance every year.
Ditto
Markets repeat themselves because human nature is constant. The themes Marks has written about for 23 years — cycles, the unknowable future, the brevity of financial memory, the importance of price — recur with almost mechanical regularity because the psychological forces that drive markets have not changed in all of recorded financial history.
High Yield Bonds Today
Co-written with Sheldon Stone, this memo addresses client concerns about high-yield bonds after their strong 2012 performance and historically low yields. While risks always exist, high yield bonds are not uniquely vulnerable to rising rates relative to other fixed-income instruments, and the current environment does not resemble the conditions that have preceded past crises.
The Outlook for Equities
Investment generalizations — like 'the long-term equity risk premium is 4.5-5%' — obscure more than they reveal. Marks argues that return expectations must be built from current starting conditions — interest rates, valuations, earnings yields — rather than borrowed from historical averages that may bear little resemblance to the environment investors actually face.
The Race is on
A sequel to 'The Race to the Bottom' (2007), observing similar patterns of loosening credit standards and diminishing risk consciousness in 2013. Marks is not predicting an imminent crisis but documenting the same warning signs — compressed spreads, weakening covenants, record issuance — that history has consistently associated with the later stages of credit cycles.
The Role of Confidence
Investor confidence — which combines belief in one's analysis, optimism about outcomes, and certainty that one's view is correct — functions as a powerful amplifier of market trends in both directions. When confidence is high, asset prices rise beyond what fundamentals support; when it collapses, they fall further than warranted. Understanding confidence as a distinct variable explains much of market behavior.
Dare to Be Great Ii
A decade after 'Dare to Be Great,' Marks revisits the question of what makes a superior investment organization. The answer has not changed: genuine outperformance requires non-consensus positions, the courage to look wrong in the short term, and institutional support for long-term thinking — all of which are far rarer in practice than in theory.
Getting Lucky
The role of luck in investing is real, significant, and systematically underappreciated. Sophisticated investors understand that good decisions don't always produce good outcomes, and bad decisions don't always produce bad ones — and that the inability to distinguish skill from luck in short-run results is one of the most pervasive sources of error in evaluating investment managers.
Risk Revisited
Marks revisits his foundational 2006 risk memo with new thinking developed since. The core argument remains: volatility is not risk, and the true risk is permanent impairment of capital. He adds important nuances about the difference between risk and the perception of risk, arguing that the greatest losses often occur when the perception of risk is lowest.
The Lessons of Oil
The 2014 oil price collapse offered several investment lessons: prices can move further and faster than anyone expects, macro events are inherently unknowable in advance, and the consensus view at any given moment is usually wrong about the magnitude and direction of future moves. These lessons apply far beyond the energy sector.
Inspiration From the World of Sports
Investing and sports share five key characteristics: competitiveness, quantifiability, team dynamics, meritocracy, and the satisfaction of playing well. Drawing on three decades of sports analogies in his memos, Marks argues that the parallels illuminate key investment principles — especially the defensive orientation that produces consistent results over time.
Its Not Easy
Charlie Munger's observation — 'it's not supposed to be easy; anyone who finds it easy is stupid' — captures a crucial truth. Doing the right thing in investing requires acting contrary to consensus at precisely the moments when doing so feels most uncomfortable. The gap between knowing what to do and actually being able to do it is where most investors fail.
Liquidity
Liquidity has two distinct meanings — the ability to sell an asset and the ability to sell it at a fair price — and conflating them leads to serious errors. Marks argues that the apparent liquidity of public markets in normal times is often illusory: when everyone wants to sell simultaneously, the market can become effectively illiquid at any price an investor would accept.
Risk Revisited Again
A follow-up to 'Risk Revisited,' adding important new observations: risk is not just the probability of loss but also the magnitude of loss when it occurs; the perception of low risk is itself a risk, because it encourages the behavior that creates actual risk; and the most dangerous investments are those that appear safe and have been performing well.
Economic Reality
Economics is the study of choice, and choices involve tradeoffs. Marks argues that politicians who promise outcomes that violate economic laws — unlimited spending without consequences, benefits without costs, growth without investment — are not offering a better economic reality but a fantasy that will eventually collide with the constraints that economics imposes.
Go Figure
The 2016 election result — which defied polling, prediction markets, and expert consensus — is yet another reminder that the future is unknowable and that market reactions to unpredictable events often confound simple cause-and-effect logic. What was supposed to cause a crash instead produced a rally, illustrating why macro forecasting is a losing game.
Implications of the Election
Beyond the partisan outcome, the 2016 election revealed deep structural realities: a large fraction of the electorate feels economically left behind, and political systems that ignore this frustration will face repeated disruption. Marks argues these facts have investment implications regardless of one's political views or preferences.
On the Couch
A sprawling memo written after a sleepless night of market worries, drawing on behavioral economics to explain why markets are persistently irrational. Professor Richard Thaler's work on decision-making under uncertainty helps explain why investors make the same mistakes repeatedly — and why understanding these biases is essential for anyone trying to outperform.
Political Reality
Brexit crystallized the divergence between political reality and economic reality: voters chose a path that most economists believed would impose significant costs, demonstrating that democratic outcomes are not constrained by economic logic. Marks argues that ignoring economic reality has consequences, even when voters choose to do so.
What Does the Market Know
Markets are often interpreted as oracles — their movements presumed to reveal information about the future. Marks challenges this view: market prices reflect the collective sentiment of buyers and sellers at a point in time, not superior knowledge of what will happen. When prices fall sharply, it means sellers outnumber buyers at the current price, not that the future has been reliably revealed.
Expert Opinion
The concept of 'expert opinion' is an oxymoron in many domains, but especially in investing and economics, where experts' track records of accurate prediction are demonstrably poor. Marks argues that intellectual humility — acknowledging the limits of what can be known — is not a weakness but an essential prerequisite for sound decision-making under uncertainty.
Lines in the Sand
Subscription credit lines — which allow private funds to borrow short-term rather than immediately draw client capital — can distort IRR calculations and misrepresent the timing of investment performance. Marks examines both the legitimate uses and potential misuses of this increasingly common practice in private equity and credit funds.
There They Go Again Again
In mid-2017, Marks observed the same warning signs he had identified before previous market peaks: compressed risk premiums, diminishing investor caution, and widespread belief that the current environment is uniquely favorable. The memo prompted extraordinary response, confirming that thoughtful investors recognized the pattern even if markets had not yet corrected.
Yet Again
The massive response to 'There They Go Again... Again' — the most of any memo in 28 years — prompted this follow-up, which addresses the misreading of Marks' position as ultra-bearish. His actual stance: not predicting a crash, but observing that risk premiums were inadequate and that the environment called for defensive positioning, not aggressive risk-taking.
Investing Without People
Three forces are reducing the role of human judgment in markets: index investing and passive strategies, quantitative and algorithmic trading, and artificial intelligence. Marks examines the implications of each — including the possibility that widespread passive investing creates market distortions and opportunities for active managers who understand the mechanics.
Latest Thinking
An update on the market environment after months of travel and book-writing. Marks reiterates that his 'There They Go Again' concerns were about inadequate risk compensation, not a prediction of imminent crash. He adds thoughts on the new tax law's likely effects and argues for caution without full defensiveness given continued but late-cycle economic strength.
The Seven Worst Words in the World
Written to coincide with the publication of 'Mastering the Market Cycle,' this memo introduces the book's central argument: the seven worst words in the world are 'too much money chasing too few deals.' Understanding where we are in the cycle — not predicting it — allows investors to tilt their risk posture appropriately without abandoning the market.
Growing the Pie
The Oaktree-Brookfield partnership announced in 2019 prompted Marks to explain the strategic rationale: scale and breadth of capabilities benefit clients in an increasingly complex world. He also uses the occasion to reflect on the growing debate about capitalism's social contract and the extent to which corporations bear responsibility beyond their shareholders.
Mysterious
Negative interest rates — a phenomenon that makes no intuitive sense and that Marks says he genuinely cannot explain — are the mystery at the center of this memo. The willingness of investors to accept guaranteed losses by buying negative-yielding bonds reveals something deeply unusual about the post-2008 environment and the distortions created by central bank policy.
On the Other Hand
A brief addendum triggered by a question Marks encountered the day he published 'This Time It's Different': can the Federal Reserve, with its discretionary tools and firepower, prevent a market dislocation or halt one once it begins? The honest answer involves genuine uncertainty about the limits of monetary policy in an environment of unprecedented intervention.
Political Reality Meets Economic Reality
Politics and economics operate on different logics, and when they collide, economics eventually wins — but the timeline is uncertain and the costs of delay are real. Marks revisits his 2016 memos on economic and political reality, arguing that the tension between what voters want and what economic laws permit has intensified rather than resolved.
This Time Its Different
John Templeton's warning — 'the four most dangerous words in investing are this time it's different' — has been confirmed by every bubble in financial history. Marks examines the structural arguments being made in 2019 to justify elevated valuations and suppressed risk premiums, finding them familiar echoes of rationalizations made at previous market peaks.
Calibrating
Four memos in March 2020, written in the fog of rapidly evolving pandemic data, required careful calibration between facts, informed extrapolations, and speculation. Marks reflects on how Harvard epidemiologist Marc Lipsitch's three-category framework — facts, informed inference, opinion — applies equally to investing: the challenge is acting decisively under uncertainty while being honest about which category your convictions fall into.
Coming Into Focus
After months of near-daily market volatility and four rapid-fire memos, things have come into clearer focus for Marks: the economic damage is severe and real, but asset prices have adjusted to reflect it, and the case for cautious optimism is building. This memo details his assessment of where the pandemic economy stands and what it means for investors willing to look through near-term uncertainty.
Knowledge of the Future
Investing is the act of positioning capital to profit from future developments — but the future is fundamentally unknowable. Marks applies Lipsitch's epidemiological framework to investing, arguing that most of what passes for 'investment knowledge' about the future is actually opinion or speculation. Recognizing this distinction is the foundation of genuine intellectual honesty in portfolio management.
Nobody Knows Ii
In the first days of the COVID-19 market crash, Marks revisits his 2008 'Nobody Knows' memo. The goal is not to say 'buy' or 'sell' but to model how a thoughtful investor should think through developments: what is known, what is genuinely uncertain, and how to act when the range of possible outcomes is unusually wide.
Not Enough
Responding to the killing of George Floyd and the nationwide protests that followed, Marks steps outside investing to address systemic racial inequality. Drawing on Martin Luther King and Benjamin Franklin, he argues that the problem is real, structural, and demanding of response — and that saying the right words without taking action is, as the title states, not enough.
The Anatomy of a Rally
The S&P 500 fell 34% in five weeks and then recovered almost entirely, producing one of the greatest and most puzzling rallies in history. Marks dissects the mechanics: unprecedented Federal Reserve intervention, fiscal stimulus, and massive liquidity creation overwhelmed the fundamental economic damage of the pandemic, teaching important lessons about the relationship between asset prices and economic reality.
Timeforthinking
After six weeks and ten memos, Marks deliberately slows down and takes time to think before writing again. The pause itself is the message: in a period of extreme uncertainty and rapid developments, the temptation to have an opinion on everything produces noise rather than insight. Sometimes the most valuable thing a thoughtful investor can do is wait.
Uncertainty Ii
A postscript to 'Uncertainty,' prompted by an important article Marks' wife brought to his attention two weeks later. The article — arguing that no one truly knows what will happen — adds important nuances to Marks' earlier framework for thinking about foreknowledge, uncertainty, and the difference between informed preparation and false certainty.
Uncertainty
Our inability to know the future is not a temporary problem to be solved by better analysis or more data — it is a permanent feature of the investment landscape. Marks devotes an entire memo to this theme for the first time, arguing that accepting fundamental uncertainty, rather than pretending to overcome it, is the foundation of sound investment thinking.
Weekly
Written in the early days of the pandemic to explain exponential growth and 'flattening the curve,' this brief memo demonstrates how compounding works in reverse — how exponential spread creates crises faster than linear thinking can comprehend. Understanding exponential dynamics is as important for investors as for epidemiologists.
Which Way Now
After experiencing the fastest bear market in history (down 34% in five weeks) followed by one of the most violent short-term recoveries ever (up 17.5% in three days), Marks examines where markets stand and what investors should do. The answer requires balancing the genuine economic damage of the pandemic against the extraordinary policy response.
You Bet
The first book Marks read as a Wharton freshman — about drilling decisions under uncertainty — taught him a lesson he has applied for 60 years: you cannot tell the quality of a decision from its outcome. Good decisions sometimes produce bad outcomes and bad decisions sometimes produce good ones, which means that short-run results are a poor guide to the skill of the decision-maker.
2020_in_review
2020 was both the best of times and the worst of times. The worst global pandemic in a century produced the fastest bear market in history — and then, thanks to massive policy intervention, one of the strongest recoveries. Marks reviews the year's extraordinary events and distills the investment lessons from a period that compressed a decade's worth of market history into twelve months.
Something of Value
Living with his son Andrew during the pandemic gave Marks sustained exposure to the perspective of a growth-oriented technology investor, sparking a rich dialogue about growth versus value, the importance of qualitative factors in company analysis, and whether the traditional value investing framework needs updating in an era of dominant platform businesses.
The Winds of Change
After 20 months of pandemic monotony, Marks observes that genuine change is finally arriving: vaccines, reopening, rising inflation, and shifting Fed policy mark the beginning of a new investment environment. The transition from zero rates and quantitative easing to something more normal will create both disruptions and opportunities that investors need to prepare for.
Thinking About Macro
Oaktree does not employ economists and does not base investment decisions on macro forecasts, because Marks is convinced that macro forecasting adds no reliable value. But macro conditions matter, and this memo explains how Oaktree thinks about the macro environment without pretending to predict it — an important distinction for any investor navigating an uncertain world.
Pandemic Era
2020–2023 · 0 memosRecent Memos
2024–2026 · 27 memosBull 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.
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.'
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 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.
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.
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.
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.
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.
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.
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.
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.
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.