During his recent panel discussion at the 2025 Qatar Economic Forum on Bloomberg Live, Howard Marks said: “The essence of investing is appropriately bearing risk for profit.” In this conversation he laid bare how risk, uncertainty, and judgment shape the core of long-term investing.
Marks emphasized the importance of understanding risk rather than running from it: “We never know the future. And that’s where the risk comes in.” Citing a favorite quote from Elroy Dimson, he noted, “Risk means more things can happen than will happen.” That, Marks explained, is what makes investing so unpredictable — and so potentially rewarding.
Throughout the discussion, he pushed back against the idea that simply avoiding risk is a viable strategy: “If risk avoidance ends up in return avoidance, we have to knowingly, intelligently take risk for profit.” But — and this is where Marks shines — he draws a clear line: “The definition of the risk we should take is one that we’re aware of, that we can analyze, that we can diversify and that we’re well paid to take.”
One of his most memorable stories dates back to 1969 when banks poured capital into the Nifty 50 stocks, assuming these top companies were nearly riskless. “If you held those stocks for five years until ‘74, you lost about 95% of your money.” He added, “These people were taking risks they were unaware of. And that’s the worst thing you can do.”
Marks also highlighted the danger of being lulled into complacency by long bull runs. “In the last 50 years, the person who took the most risk made the most money. But by definition, that can’t be true all the time, or it wouldn’t be risk.” He warns that when markets are generous, many investors become emboldened — precisely when they should be cautious. “Just at the time when you should be reducing [risk], most people are putting on more.”
And what about those chasing the latest tech trends or index performance? Marks cautions against overreliance on passive strategies: “When things are going well, people underestimate risk and overestimate their ability to live without liquidity.” In his view, liquidity isn’t just a number — “there might actually someday be a need for money.”
Ultimately, Marks admitted his own blind spots: “I’m a skeptic with regard to new and not obviously meritorious development. That hasn’t been a good thing in the last 15 years.” But even as markets evolve, his message remains grounded: Take risks, but only the right ones — and only if you’re truly prepared.
You can watch the entire discussion here:
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