# Howard Marks: 80 years of investing wisdom in 46 minutes > Source: > Published: 2026-07-15 09:00:00+00:00 # Howard Marks: 80 years of investing wisdom in 46 minutes Howard Marks waited until he was nearly 50 to start making conscious life decisions — and credits pure luck, not strategy, for almost everything that made him great. My First Million # Howard Marks: 80 years of investing wisdom in 46 minutes Howard Marks waited until he was nearly 50 to start making conscious life decisions — and credits pure luck, not strategy, for almost everything that made him great. TL;DR Legendary investor Howard Marks joins Sam Parr and Shaan Puri for a wide-ranging conversation covering AI's unprecedented autonomy [1] — Howard Marks "Every prior technology — railroads, computers, the internet — was a tool to speed up productivity. AI is the first technology with autonomy…" 02:15 , the art of investing through crisis without confidence [2] — Howard Marks "When Lehman collapsed, there was no data, no historical analogy — only supposition. Oaktree's logic was simple: if the financial world ends…" 17:20 , and what makes a 39-year partnership thrive [3] — Howard Marks "Howard Marks admits he stumbled into every major career decision — Citibank, bonds, California — through luck and haphazard drift, not inte…" 31:58 . Marks recounts raising $11B for a distressed debt fund before the 2008 financial crisis, his unlikely friendship with Warren Buffett, and why Charlie Munger's greatest gift was convincing Buffett to abandon "cigar butt" investing. The single most useful takeaway: if you wait until you have nothing to fear, the opportunity has already passed [4] — Howard Marks "If you wait until you have nothing to be afraid about, probably the opportunity has passed." . Sam Parr and Shaan Puri talk to legendary investor Howard Marks about AI and making decisions in the face of fear and uncertainty. - The episode opens with Howard Marks' most memorable line delivered cold: 'If you wait until you have nothing to be afraid about, probably the opportunity has passed.' From there, Sam Parr recounts reading Marks' new AI memo that morning and noting that Marks — a man famously disciplined about not getting emotionally seduced by ideas — sounded, in Shaan Puri's words, 'a little seduced.' Marks explains the origin: his son Andrew, a VC immersed in AI daily, told him in early February that so much had happened since the December memo that he had to rewrite it entirely. Marks identifies two qualities that make AI categorically different from all prior technology. The first is autonomy: every innovation from the railroad to the internet was a tool to speed up productivity, but AI is the first that can receive a job without being told how to do it and figure it out independently. The second is that the future shape of AI is, in Marks' view, more unpredictable than anything he has ever encountered — more so even than the internet. [1] — Howard Marks "Howard Marks wrote a skeptical AI memo in December, then rewrote it entirely in February after his son Andrew — a VC working with AI daily …" 00:49 - Shaan Puri presses Marks on something he read in one of Marks' books: 'I can make someone better, but I don't think I can make them great.' Marks explains that the first chapter of 'The Most Important Thing' is about second-level thinking — the need to have a variant perception, a view that diverges from the consensus of investors, and then to be right about it. He is unambiguous: he can teach someone why second-level thinking matters, but he cannot teach them how to have correct contrarian views. 'In basketball, there's a saying, you can't coach height. And I think there's something called insight.' He then raises the looming AI question: when AI achieves artificial general intelligence — the ability to do everything a human can do — will it be able to replicate this kind of insight? He genuinely doesn't know. [1] — Howard Marks "Second-level thinking means seeing something different from the consensus — a variant perception — and being right about it. You can teach …" 08:28 - Marks walks through one of the most consequential investment decisions in modern financial history. Oaktree had raised $11 billion in a distressed debt fund — the largest in history — in anticipation of a major crisis. When Lehman went under, the question was stark: invest, or hold back? The problem was that 'there's no pattern recognition for the end of the world.' Drawing on a Harvard epidemiologist's pandemic framework — that decisions require data, analogies, and supposition — Marks notes that in September 2008, they had none of the first two and only supposition. Their logic was binary: if the financial system truly collapses, nothing matters whether you invest or not. But if it doesn't collapse and you didn't invest, you failed your mandate. So they invested. Bruce Karsh deployed $450 million a week for 15 consecutive weeks — $7 billion in a single quarter. [1] — Howard Marks "When Lehman collapsed, there was no data, no historical analogy — only supposition. Oaktree's logic was simple: if the financial world ends…" 17:20Crucially, Marks is emphatic: they were not confident. 'We were absolutely not confident.' - Sam Parr stops Marks to dig into the mechanics of a feat most investors will never accomplish: raising $11 billion from institutional investors at a moment of great uncertainty. Marks breaks it into components. First, prior experience: Oaktree was founded in 1988, giving them two decades of strong results and deep relationships to draw upon. Second, strategic positioning: distressed debt is uniquely suited to crisis, and Oaktree had performed exceptionally in the crises of 1991 and 2001–2002. Third, and most importantly, Oaktree had credibility because they consistently shrank their subsequent fund after a great-performing one — the opposite of every other manager — signaling that they were driven by opportunity, not fee maximization. Marks quotes the movie Spy Game: 'When did Noah build the ark? Before the flood.' You cannot raise money during the crisis because the news is too terrible. You have to have the fund ready to deploy before people know they need it. [1] — Howard Marks "You can't raise money during a crisis because the news is too terrible. Oaktree raised $11B before the 2008 crash by pointing to real flaws…" 25:00 - Marks pushes back on the idea that great investors are fearless contrarians who feel no doubt. He reads the same newspapers, watches the same shows, sees the same terrible news — and it looks terrible to him too. 'I overcome it in some way and conclude, no, I should invest. But I'm not immune to what everybody else is reading.' He draws a distinction between rationality and immunity to fear: if you're doing these things without any trepidation, 'maybe there's something wrong with you.' A battle hero isn't someone without fear; it's someone who acts despite fear. He recounts telling a panicking young portfolio manager in 1998 during the Long-Term Capital Management crisis to go back to his desk and do his job. And then the line that opens and defines the whole episode: 'If you wait until you have nothing to be afraid about, probably the opportunity has passed.' [1] — Howard Marks "If you wait until you have nothing to be afraid about, probably the opportunity has passed." - Shaan Puri prompts Marks to share the secret of his 39-year partnership with Bruce Karsh, framing it as a question for himself and Sam Parr about how to build a lasting business relationship. Marks says their foundation is mutual respect, which he's never experienced without. He wrote a memo in 2002 laying out the formula: shared values and complementary skills. On values, he tells the story of his friend who used to carry around the list of investment banks from an AT&T IPO tombstone ad and mark off each one as it went out of business — almost all of them eventually collapsed because they had 'cowboys and chickens' who undermined each other in alternating market conditions. On complementary skills: if you can do everything your partner can do, you'll eventually decide you don't need them. The beauty of the Karsh-Marks relationship is that each genuinely cannot do what the other does. [1] — Howard Marks "Most investment firm partnerships collapse because cowboys and chickens end up together and tear each other apart in different market condi…" 20:58Marks adds a third, often-neglected element: appreciation — genuinely being grateful that your partner handles the things you don't want to do. - Prompted by the repeated mentions of his son Andrew throughout the conversation, Shaan Puri asks Marks how he managed to raise a child he genuinely enjoys being around. Marks starts with a striking anecdote from Forbes, about the only therapist with an office on Wall Street, who observed that his patients' problems were inversely proportional to the support they received from their fathers. He notes how many successful men feel compelled to assert superiority over their sons — perhaps something Freudian — and says he simply never wanted to be that father. He always let Andrew be smarter than him in some domains. He extends the principle to children's choices more broadly: if a choice isn't going to cause harm and both options are reasonable, let the child decide. They get experience making choices — and critically, experience making incorrect choices, which is 'very important.' [1] — Howard Marks "A Wall Street therapist once said his patients' problems were inversely proportional to the support they got from their fathers. Marks says…" 26:16 - Sam Parr poses the fundamental life question: how should a young person figure out what they actually want to do? Marks opens with a disarming confession: he was unconscious for roughly his first 49 years. He stumbled into Citibank because he'd had a good summer there. He moved into bonds because he was told to get out of equity research. He moved to California for the sunshine and palm trees. He says he's embarrassed at how terrible his decision-making process was — 'it's a misnomer to apply that term.' His saving grace was pure luck: being idle when a call came in about Michael Milken and high-yield bonds, at the right time, in the right place. The advice he gives to students at Wharton and Harvard is Christopher Morley's quote: 'There's only one success, to live your life your own way.' That means not letting friends, society, or parents decide for you. The hard part isn't the aspiration — it's that it requires knowing yourself, and you'll be a different person in twenty years. [1] — Howard Marks "Howard Marks admits he stumbled into every major career decision — Citibank, bonds, California — through luck and haphazard drift, not inte…" 31:58 - Sam Parr asks for Warren Buffett stories, and Marks tells one that has never been made public before. After the Enron scandal, Oaktree became the largest holder of the debt of an off-balance-sheet Enron entity called Osprey; Buffett was the second largest. Buffett gave Oaktree his proxy, Bruce Karsh restructured the position masterfully, and in 2003–2004 Buffett wrote a note saying if you're ever in Omaha, let's have lunch. Marks and Karsh promptly wrote back claiming to be in Omaha that week. The relationship grew from there, and in 2009 Marks sent Buffett a memo mentioning him — Buffett responded to say he already read the memos, and then added: 'you should write a book, and if you do, I'll give you a blurb.' That single note is the reason 'The Most Important Thing' exists. [1] — Howard Marks "After Marks sent Buffett a memo that mentioned him, Buffett replied saying he should write a book and offered to provide a blurb. That sing…" 36:35Marks had always planned to write a book in retirement; Buffett's note moved the timeline up by decades. - Shaan Puri asks whether there's anything the public gets wrong about Buffett. Marks' answer is unexpectedly moving: nothing is wrong in popular lore, but the public doesn't fully appreciate the depth of Buffett's love for Munger. He references a Thanksgiving letter Buffett sent after Munger's death, describing Charlie as the big brother and himself as the little brother. Marks draws the parallel to his own partnership with Karsh directly: 'I think we can say that about my relationship with Bruce.' He notes that Buffett and Munger's relationship was 'always suffused with humor' and that when they got together, Munger mostly wanted to talk about ideas — not investments, not money, not companies. This is a portrait of what a great intellectual partnership looks like at its best. [1] — Howard Marks "The one thing I'll say that I don't think people know about is the depth of his love for Charlie." 37:58 - Sam Parr asks about the day-to-day mechanics of the Buffett-Munger relationship, and Marks uses it to explain one of investing's most important conceptual shifts. Charlie served as Buffett's logic checker and sounding board. But his greatest contribution was conceptual: Buffett had long practiced 'cigar butt investing' — buying cheap, beaten-down companies the way you might pick up a discarded cigar stub with a few puffs left. The companies were terrible, but the price was right. Munger convinced Buffett this was the wrong way to think. His revolution was the insight that 'not any company at a great price, great companies at a good price' is the superior approach. Marks describes their partnership as synergistic, built on mutual respect and love, and notes that they may have had the highest combined IQ of any partnership in history — but expressed in very different forms: Buffett was an 'incredible computing machine,' while Munger was a classicist, humanist, and 'man of letters.' [1] — Howard Marks "Warren Buffett used to buy cheap, low-quality companies just because they were cheap — cigar butts with a few puffs left. Charlie Munger co…" 41:15 - Sam Parr asks about the day-to-day mechanics of the Buffett-Munger relationship, and Marks uses it to explain one of investing's most important conceptual shifts. Charlie served as Buffett's logic checker and sounding board. But his greatest contribution was conceptual: Buffett had long practiced 'cigar butt investing' — buying cheap, beaten-down companies the way you might pick up a discarded cigar stub with a few puffs left. The companies were terrible, but the price was right. Munger convinced Buffett this was the wrong way to think. His revolution was the insight that 'not any company at a great price, great companies at a good price' is the superior approach. Marks describes their partnership as synergistic, built on mutual respect and love, and notes that they may have had the highest combined IQ of any partnership in history — but expressed in very different forms: Buffett was an 'incredible computing machine,' while Munger was a classicist, humanist, and 'man of letters.' [1] — Howard Marks "Warren Buffett used to buy cheap, low-quality companies just because they were cheap — cigar butts with a few puffs left. Charlie Munger co…" 41:15 - Second-level thinking - Howard Marks' framework for superior investing: forming a view that differs from the market consensus (a 'variant perception') and betting on it correctly, rather than simply thinking the same as everyone else. - Variant perception - A view on a company or asset that differs from the consensus of market participants; a necessary ingredient for generating above-average investment returns. - Distressed debt - Bonds or loans of companies in financial difficulty or bankruptcy, purchased at deep discounts with the expectation of recovery; Oaktree Capital's core investment strategy. - Cigar butt investing - Warren Buffett's early strategy of buying very cheap, low-quality companies because they still had a few profitable 'puffs' left — like picking up a discarded cigar stub. Charlie Munger convinced Buffett to abandon this for quality companies at fair prices. - AGI (Artificial General Intelligence) - A hypothetical level of AI capability at which a system can perform any intellectual task a human can do; Howard Marks cites it as the key open question about AI's ultimate limits. - Indexation - The practice of investing in a passive index fund that tracks the market, rather than active stock-picking; its rise exposed most active managers as unable to consistently beat market averages. - Tombstone ad - A formal print advertisement placed in financial newspapers announcing a completed securities offering, listing all the investment banks involved; historically a mark of prestige. - Trepidation - A feeling of fear or anxiety about something imminent; Marks uses it to describe the appropriate emotional state when making contrarian investment decisions in a crisis. - Unfrock / defrock - To strip someone of their professional status or credibility; Marks uses it metaphorically to describe how AI will expose investors who lack genuine skill. - Suffused - Spread throughout or permeated; Howard Marks uses it to describe how humor infused the relationship between Buffett and Munger ('their relationship was always suffused with humor'). - Probability distribution - A mathematical description of all possible outcomes and their likelihoods; Marks uses it to describe the mental model that separates superior investors — those who better understand the full range of possible futures. - Synergistic - Producing a combined effect greater than the sum of individual parts; used by Marks to describe partnerships where both people add value the other cannot replicate. - Derelict - Negligent in one's duty; Howard Marks uses it self-critically to describe his failure to make intentional life decisions in his younger years. - High-yield bonds - Corporate bonds rated below investment grade ('junk bonds') that offer higher interest rates to compensate for greater default risk; Marks entered this field in 1978 at Citibank. Chapter 1 · 00:00 ## AI Hurtles Ahead The episode opens with Howard Marks' most memorable line delivered cold: 'If you wait until you have nothing to be afraid about, probably the opportunity has passed.' From there, Sam Parr recounts reading Marks' new AI memo that morning and noting that Marks — a man famously disciplined about not getting emotionally seduced by ideas — sounded, in Shaan Puri's words, 'a little seduced.' Marks explains the origin: his son Andrew, a VC immersed in AI daily, told him in early February that so much had happened since the December memo that he had to rewrite it entirely. Marks identifies two qualities that make AI categorically different from all prior technology. The first is autonomy: every innovation from the railroad to the internet was a tool to speed up productivity, but AI is the first that can receive a job without being told how to do it and figure it out independently. The second is that the future shape of AI is, in Marks' view, more unpredictable than anything he has ever encountered — more so even than the internet. [1] — Howard Marks "Howard Marks wrote a skeptical AI memo in December, then rewrote it entirely in February after his son Andrew — a VC working with AI daily …" 00:49 [14 claims fact-checked this episode See with Pro](/upgrade/?source=episode-story-claims) [AI autonomy is unprecedented](/bit/snapshot/9768/) Howard Marks argues AI's autonomy — the ability to receive a task and figure out how to do it without instruction — is unique among all technological innovations in history. [1M+](/bit/snapshot/9780/) The previous My First Million episode with Howard Marks was heard by over one million people. [Why Howard Marks Changed His Mind on AI](/bit/podbit/9008/) Howard Marks wrote a skeptical AI memo in December, then rewrote it entirely in February after his son Andrew — a VC working with AI daily — told him too much had changed. This is second-level thinking applied to your own beliefs: get new facts, update your view. [AI Has Autonomy — No Technology Has Ever Had That Before](/bit/podbit/8999/) Every prior technology — railroads, computers, the internet — was a tool to speed up productivity. AI is the first technology with autonomy: you give it a job and don't tell it how, and it figures it out. That single quality changes everything. [Will AI Replace the Next Howard Marks?](/bit/podbit/9000/) AI will expose investors whose talents don't match their claims, just as indexation did to most active managers. But there will always be novel situations with no historical data to train on — and that's where human judgment with 'hair on its neck' still matters. [Indexation exposed most active equity managers](/bit/snapshot/9781/) Howard Marks observed that the rise of index investing exposed most active equity managers as underperformers who couldn't beat the averages. Chapter 2 · 08:26 ## Second Level Thinking Shaan Puri presses Marks on something he read in one of Marks' books: 'I can make someone better, but I don't think I can make them great.' Marks explains that the first chapter of 'The Most Important Thing' is about second-level thinking — the need to have a variant perception, a view that diverges from the consensus of investors, and then to be right about it. He is unambiguous: he can teach someone why second-level thinking matters, but he cannot teach them how to have correct contrarian views. 'In basketball, there's a saying, you can't coach height. And I think there's something called insight.' He then raises the looming AI question: when AI achieves artificial general intelligence — the ability to do everything a human can do — will it be able to replicate this kind of insight? He genuinely doesn't know. [1] — Howard Marks "Second-level thinking means seeing something different from the consensus — a variant perception — and being right about it. You can teach …" 08:28 [Second-Level Thinking: You Either Have It or You Don't](/bit/podbit/9001/) Second-level thinking means seeing something different from the consensus — a variant perception — and being right about it. You can teach someone why it matters, but you can't teach them how to have it. It's like insight: either you have it, or you don't. [Second-level thinking: you can't teach it](/bit/snapshot/9775/) Howard Marks says second-level thinking — having a variant perception from the market consensus and betting on it correctly — is more innate than teachable, similar to how you can't coach height in basketball. Chapter 4 · 14:51 ## Raising $11B at a Time of Crisis Sam Parr stops Marks to dig into the mechanics of a feat most investors will never accomplish: raising $11 billion from institutional investors at a moment of great uncertainty. Marks breaks it into components. First, prior experience: Oaktree was founded in 1988, giving them two decades of strong results and deep relationships to draw upon. Second, strategic positioning: distressed debt is uniquely suited to crisis, and Oaktree had performed exceptionally in the crises of 1991 and 2001–2002. Third, and most importantly, Oaktree had credibility because they consistently shrank their subsequent fund after a great-performing one — the opposite of every other manager — signaling that they were driven by opportunity, not fee maximization. Marks quotes the movie Spy Game: 'When did Noah build the ark? Before the flood.' You cannot raise money during the crisis because the news is too terrible. You have to have the fund ready to deploy before people know they need it. [1] — Howard Marks "You can't raise money during a crisis because the news is too terrible. Oaktree raised $11B before the 2008 crash by pointing to real flaws…" 25:00 [Investing $7 Billion After Lehman With Zero Confidence](/bit/podbit/9002/) When Lehman collapsed, there was no data, no historical analogy — only supposition. Oaktree's logic was simple: if the financial world ends, nothing matters. If it doesn't, and you don't invest, you failed your mandate. Bruce Karsh deployed $450M a week for 15 weeks. [$2.5B](/bit/snapshot/9769/) Before the 2008 crisis, the largest distressed debt fund in history was Oaktree's 2002 fund at $2.5 billion. [$11B](/bit/snapshot/9770/) Oaktree raised an $11 billion distressed debt fund in 2007–2008 before the crisis hit, the largest of its kind at the time. Chapter 5 · 17:54 ## Investing with Fear Marks pushes back on the idea that great investors are fearless contrarians who feel no doubt. He reads the same newspapers, watches the same shows, sees the same terrible news — and it looks terrible to him too. 'I overcome it in some way and conclude, no, I should invest. But I'm not immune to what everybody else is reading.' He draws a distinction between rationality and immunity to fear: if you're doing these things without any trepidation, 'maybe there's something wrong with you.' A battle hero isn't someone without fear; it's someone who acts despite fear. He recounts telling a panicking young portfolio manager in 1998 during the Long-Term Capital Management crisis to go back to his desk and do his job. And then the line that opens and defines the whole episode: 'If you wait until you have nothing to be afraid about, probably the opportunity has passed.' [1] — Howard Marks "If you wait until you have nothing to be afraid about, probably the opportunity has passed." Chapter 6 · 20:22 ## The Key to a Successful Partnership Shaan Puri prompts Marks to share the secret of his 39-year partnership with Bruce Karsh, framing it as a question for himself and Sam Parr about how to build a lasting business relationship. Marks says their foundation is mutual respect, which he's never experienced without. He wrote a memo in 2002 laying out the formula: shared values and complementary skills. On values, he tells the story of his friend who used to carry around the list of investment banks from an AT&T IPO tombstone ad and mark off each one as it went out of business — almost all of them eventually collapsed because they had 'cowboys and chickens' who undermined each other in alternating market conditions. On complementary skills: if you can do everything your partner can do, you'll eventually decide you don't need them. The beauty of the Karsh-Marks relationship is that each genuinely cannot do what the other does. [1] — Howard Marks "Most investment firm partnerships collapse because cowboys and chickens end up together and tear each other apart in different market condi…" 20:58 Marks adds a third, often-neglected element: appreciation — genuinely being grateful that your partner handles the things you don't want to do. [$450M/wk](/bit/snapshot/9771/) After Lehman Brothers collapsed, Oaktree's Bruce Karsh invested an average of $450 million per week for 15 weeks — $7 billion in a single quarter. [The Secret to a 39-Year Partnership](/bit/podbit/9004/) Most investment firm partnerships collapse because cowboys and chickens end up together and tear each other apart in different market conditions. Howard Marks and Bruce Karsh have been partners 39 years because they share values, have complementary skills, and genuinely appreciate what the other does. [39 years](/bit/snapshot/9772/) Howard Marks and Bruce Karsh have been partners at Oaktree for 39 years as of the episode, and Marks says they have never had a fight. [All 5 macro calls made with doubt](/bit/snapshot/9776/) In a memo titled 'Taking the Temperature,' Howard Marks reviewed his five major macro investment calls over 26 years and found every single one was made with some level of doubt. [Raising $11 Billion Before the Flood](/bit/podbit/9003/) You can't raise money during a crisis because the news is too terrible. Oaktree raised $11B before the 2008 crash by pointing to real flaws in the market, twenty years of track record, and a counterintuitive habit: shrinking their next fund after a great return. Chapter 7 · 25:01 ## Being a Good Father Prompted by the repeated mentions of his son Andrew throughout the conversation, Shaan Puri asks Marks how he managed to raise a child he genuinely enjoys being around. Marks starts with a striking anecdote from Forbes, about the only therapist with an office on Wall Street, who observed that his patients' problems were inversely proportional to the support they received from their fathers. He notes how many successful men feel compelled to assert superiority over their sons — perhaps something Freudian — and says he simply never wanted to be that father. He always let Andrew be smarter than him in some domains. He extends the principle to children's choices more broadly: if a choice isn't going to cause harm and both options are reasonable, let the child decide. They get experience making choices — and critically, experience making incorrect choices, which is 'very important.' [1] — Howard Marks "A Wall Street therapist once said his patients' problems were inversely proportional to the support they got from their fathers. Marks says…" 26:16 [1988](/bit/snapshot/9778/) Oaktree was founded in 1988, giving Marks and Karsh 20 years of track record and relationships to draw on when raising the $11B fund in 2007–2008. [Fatherhood: Never Assert Superiority Over Your Son](/bit/podbit/9009/) A Wall Street therapist once said his patients' problems were inversely proportional to the support they got from their fathers. Marks says too many successful men feel compelled to assert superiority over their sons — and deliberately chose never to be that kind of father. Chapter 8 · 27:37 ## Only 1 Success: To Live Your Life Your Way Sam Parr poses the fundamental life question: how should a young person figure out what they actually want to do? Marks opens with a disarming confession: he was unconscious for roughly his first 49 years. He stumbled into Citibank because he'd had a good summer there. He moved into bonds because he was told to get out of equity research. He moved to California for the sunshine and palm trees. He says he's embarrassed at how terrible his decision-making process was — 'it's a misnomer to apply that term.' His saving grace was pure luck: being idle when a call came in about Michael Milken and high-yield bonds, at the right time, in the right place. The advice he gives to students at Wharton and Harvard is Christopher Morley's quote: 'There's only one success, to live your life your own way.' That means not letting friends, society, or parents decide for you. The hard part isn't the aspiration — it's that it requires knowing yourself, and you'll be a different person in twenty years. [1] — Howard Marks "Howard Marks admits he stumbled into every major career decision — Citibank, bonds, California — through luck and haphazard drift, not inte…" 31:58 [Oaktree shrank next fund after great returns](/bit/snapshot/9782/) Unusually, Oaktree made their next fund smaller after a great-performing fund, because strong results meant assets had appreciated and future opportunities were less attractive. [Howard Marks Didn't Make a Conscious Decision Until He Was 49](/bit/podbit/9005/) Howard Marks admits he stumbled into every major career decision — Citibank, bonds, California — through luck and haphazard drift, not intention. He only began living deliberately at roughly 49 when he co-founded Oaktree. The lesson: it's never too late to start. [Howard made unconscious decisions until age ~49](/bit/snapshot/9773/) Howard Marks admitted he made major life decisions haphazardly and without intention for his first 49 years, only beginning to live consciously when he co-founded Oaktree around 1995. [Mark Twain's certainty warning](/bit/snapshot/9779/) Howard Marks quoted Mark Twain: 'It ain't what you don't know that gets you into trouble. It's what you know for certain that just ain't true.' Chapter 9 · 34:17 ## Having Lunch with Warren Buffett Sam Parr asks for Warren Buffett stories, and Marks tells one that has never been made public before. After the Enron scandal, Oaktree became the largest holder of the debt of an off-balance-sheet Enron entity called Osprey; Buffett was the second largest. Buffett gave Oaktree his proxy, Bruce Karsh restructured the position masterfully, and in 2003–2004 Buffett wrote a note saying if you're ever in Omaha, let's have lunch. Marks and Karsh promptly wrote back claiming to be in Omaha that week. The relationship grew from there, and in 2009 Marks sent Buffett a memo mentioning him — Buffett responded to say he already read the memos, and then added: 'you should write a book, and if you do, I'll give you a blurb.' That single note is the reason 'The Most Important Thing' exists. [1] — Howard Marks "After Marks sent Buffett a memo that mentioned him, Buffett replied saying he should write a book and offered to provide a blurb. That sing…" 36:35 Marks had always planned to write a book in retirement; Buffett's note moved the timeline up by decades. [Warren Buffett Told Howard Marks to Write a Book](/bit/podbit/9006/) After Marks sent Buffett a memo that mentioned him, Buffett replied saying he should write a book and offered to provide a blurb. That single note moved up Marks' planned book by decades — and 'The Most Important Thing' was the result. [Buffett prompted Marks to write his first book](/bit/snapshot/9774/) Warren Buffett sent Howard Marks a note in 2009 saying he should write a book and promised a blurb — directly causing Marks to write 'The Most Important Thing' years ahead of his planned retirement. Chapter 10 · 37:58 ## What People Don't Know About Buffett Shaan Puri asks whether there's anything the public gets wrong about Buffett. Marks' answer is unexpectedly moving: nothing is wrong in popular lore, but the public doesn't fully appreciate the depth of Buffett's love for Munger. He references a Thanksgiving letter Buffett sent after Munger's death, describing Charlie as the big brother and himself as the little brother. Marks draws the parallel to his own partnership with Karsh directly: 'I think we can say that about my relationship with Bruce.' He notes that Buffett and Munger's relationship was 'always suffused with humor' and that when they got together, Munger mostly wanted to talk about ideas — not investments, not money, not companies. This is a portrait of what a great intellectual partnership looks like at its best. [1] — Howard Marks "The one thing I'll say that I don't think people know about is the depth of his love for Charlie." 37:58 Chapter 12 · 41:15 ## Recommended Reading Sam Parr asks about the day-to-day mechanics of the Buffett-Munger relationship, and Marks uses it to explain one of investing's most important conceptual shifts. Charlie served as Buffett's logic checker and sounding board. But his greatest contribution was conceptual: Buffett had long practiced 'cigar butt investing' — buying cheap, beaten-down companies the way you might pick up a discarded cigar stub with a few puffs left. The companies were terrible, but the price was right. Munger convinced Buffett this was the wrong way to think. His revolution was the insight that 'not any company at a great price, great companies at a good price' is the superior approach. Marks describes their partnership as synergistic, built on mutual respect and love, and notes that they may have had the highest combined IQ of any partnership in history — but expressed in very different forms: Buffett was an 'incredible computing machine,' while Munger was a classicist, humanist, and 'man of letters.' [1] — Howard Marks "Warren Buffett used to buy cheap, low-quality companies just because they were cheap — cigar butts with a few puffs left. Charlie Munger co…" 41:15 [Cigar Butt Investing and Charlie Munger's Revolution](/bit/podbit/9007/) Warren Buffett used to buy cheap, low-quality companies just because they were cheap — cigar butts with a few puffs left. Charlie Munger convinced him to abandon that strategy and buy great companies at good prices instead. That shift is credited as Munger's single greatest contribution. [Cigar butt investing: Charlie's revolution](/bit/snapshot/9777/) Charlie Munger's greatest contribution to Berkshire Hathaway was convincing Warren Buffett to stop buying cheap, low-quality companies ('cigar butts') and instead buy great companies at a good price. [The Book That Shaped Howard Marks: A Short History of Financial Euphoria](/bit/podbit/9010/) John Kenneth Galbraith's 'A Short History of Financial Euphoria' is Marks' most influential book recommendation. It explains the recurring psychological weakness that causes financial booms and busts — and Marks was lucky enough to meet Galbraith himself. No indexed bits in this chapter. ## Show stoppers ## Snapshots () ## Key Quotes () Sign in to keep viewing Create a free account to keep exploring this episode's insights, snapshots and quotes.