Great Investor Series – Howard Marks, Oaktree Capital – ValueWalk Premium
Howard Marks oaktree capital value investing value investors valuation metrics famous investors PE ratio PB ratio EV/EBITDA PEG ratio

Great Investor Series – Howard Marks, Oaktree Capital

I am happy to announce the launch of our new Great Investor Series with today’s spotlight on Howard Marks, founder and Chairman of Oaktree Capital.

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Howard Marks oaktree capital value investing value investors valuation metrics famous investors PE ratio PB ratio EV/EBITDA PEG ratio

The series is intended to provide an introduction to some of the world’s top investors and the investing principles that guide them in their work.

The thinking behind the Great Investor Series intent is simple. To “level up” in the knowledge – simply study the brightest in the field and work backwards for there. This week, we introduce Howard Marks, founder and Chairman of Oaktree Capital.

In the 2017 Forbes rankings of the wealthiest Americans, Marks was ranked the #374 richest person in the United States, with a net worth of $1.91 billion. He is known in the investment community for his “Oaktree memos” to clients which detail investment strategies and insight into the economy.

In this episode we talk about:

  • The cyclical nature of markets [2:15]
  • Thinking about the property cycle in Singapore [3:50]
  • The boom and bust in the legal profession post GFC 2008 [4:27]
  • Leverage – why it doesnt “add value” to whether you are right or wrong [5:29]
  • Why the future is inherently unpredictable and thats okay as long as… [7:43]
  • You have a margin of safety [10:00]

Cycles, cycles and more cycles

Howard Marks is one of my favourite investors and is a particularly keen observer of cycles. One  of the things which he talks about time and time again is the idea of the pendulum whereby markets are swinging either from excessive optimism or pessimism.

While is it not possible to tell when the turn of the pendulum comes, it is important still to take stock of the “temperature” of the market. Is it hot or cold? Are people excited or scared? Are valuations high or low?

Doing so allows us to temper our own expectations and help us decide how aggressive or conservative we are. As Warren Buffett always says – you want to be greedy when people are fearful and fearful when people are greedy. They are really driving at the same point.

Learn More About Howard Marks

If you enjoyed the episode on Howard Marks, I highly recommend checking out the following links which provide a deeper insight into him and his work at Oaktree Capital.

Links & Resources:

Howard Marks: “The Most Important Thing – Origins and Inspirations” | Talks at Google https://www.youtube.com/watch?v=6WroiiaVhGo

Oaktree Memos

https://www.oaktreecapital.com/insights/howard-marks-memos

The memos are really worth its weight in gold. They provide extraordinary insight written at that point of time without hindsight bias.

His book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor compiles his insights over the years into topics which are also highly illuminating.

Article by Jun Hao, The Asia Report

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