During his recent interview with the Trinity Student Managed Fund Podcast, Howard Marks discussed a number of topics drawn from decades of experience that reveal a philosophy rooted in discipline, patience, and a steadfast commitment to values.
“We didn’t have a napkin,” Marks quipped, reflecting on OakTree’s humble beginnings. “We had worked together for nine years with success… and we wanted to keep working together in a firm that ran our way.” This emphasis on continuity and shared purpose laid the foundation for OakTree’s culture, which Marks describes as “a no-jerk policy” and “a non-hierarchical environment.”
Central to Marks’ approach is the idea of risk control. “Risk control number one, consistency number two,” he stated, outlining OakTree’s investment philosophy.
This principle was tested during the 2008 financial crisis, when others abandoned caution. “When other people are carefree, we should be worried. When other people are terrified, we can turn aggressive.”
Marks’ foresight allowed OakTree to raise an $11 billion distressed debt fund, a move he called “the most proud” moment of his career. “We waited a year before activating that fund… 1.6% of 11 billion is $160 million a year that we didn’t take.” This discipline underscores his belief that short-term sacrifices often yield long-term rewards.
Marks’ contrarian mindset is not about opposition for its own sake but about recognizing market extremes. “Being too far ahead of your time is indistinguishable from being wrong,” he noted, acknowledging the discomfort of standing apart from the crowd.
Yet, he insists, “If you behave the same as everybody else, that’s not a very good formula for being superior.” His advice for investors is to study history, as “history does not repeat, but it does rhyme.”
Books like Devil Take the Hindmost and A Short History of Financial Euphoria reveal recurring patterns of speculation and collapse, lessons Marks applied during the tech bubble. “I published one [a memo] called bubble.com… it didn’t look wrong for long.”
At the heart of Marks’ philosophy is integrity. “Doing the right thing will lead to the greatest success in the long run,” he said, even when it costs short-term profits. This ethos extends to partnerships, where “shared values and complimentary skills” are paramount.
His partnership with Bruce Karsh exemplifies this: “We’ve never had an argument… I think fast, he thinks slow.” Such alignment, Marks argues, is rare but essential.
For students and investors alike, Marks’ says: “We know nothing about the future… we should study the past.” His journey—from OakTree’s founding to navigating crises—proves that success is not just about intelligence but about character.
As he put it, “If we do these things, we’ll have a successful organization. If we don’t, we won’t deserve to.”
You can watch the entire interview here:
For all the latest news and podcasts, join our free newsletter here.
Don’t forget to check out our FREE Large Cap 1000 – Stock Screener, here at The Acquirer’s Multiple:
