Howard Marks Reflects on 35 Years of Investment Memos
Howard Marks didn’t initially aim to be a leading voice in finance. He wrote his first investment memo in 1990 and sent it out to numerous clients, but it took a decade before he received any feedback. Everything changed in January 2000 when he published a memo called “Bubble.com.” In it, he cautioned that investors were too blindly optimistic about the Internet’s potential, which contributed to a market decline. “This was the first of my notes that truly engaged readers,” Marks reflected. “The book explores the psychology behind market bubbles during the dot-com boom, which soon led to a significant bust as inflated stock valuations, based on an overenthusiasm for the ‘new, new,’ ultimately crashed.”
Just a few months later, the dot-com boom came crashing down, and Marks had emerged as a respected authority on Wall Street. Since then, he has penned over 160 memos focusing on market sentiment, risk, and investor behavior. This week, as a nod to the 35th anniversary of his first memo, Oaktree is unveiling a digital archive of all of Marks’ writings, along with a collection of 45 of his personal favorites.
Buffett’s Early Support
One of Marks’ early fans was none other than Warren Buffett. The Berkshire Hathaway CEO first met Marks and his partner Bruce Kirsch while they were both working at a struggling company that faced significant financial challenges. During a reorganization, Buffett handed them power of attorney, leading to a lasting friendship. After Marks referenced Buffett in one of his memos, he sent him a copy, prompting Buffett to write back in support of Marks’ future book. “He told me, ‘If you write a book, I’ll give you the blurb for the jacket,'” Marks recalled. This collaboration resulted in Marks’ first book, “The Most Important Thing,” where Buffett kept his promise by stating, “When I see a note from Howard Marks in my email, I open it and read it first. I always learn something.”
No AI Bubble… Yet
Marks emphasizes understanding market psychology over making predictions. This mindset enabled him to identify the dot-com bubble, caution against reckless risk in 2007, and assess the financial crisis in 2008. Now, he notices similarities in current market trends but refrains from labeling the AI-driven market as a bubble. “Valuations are high, but not out of the ordinary,” he stated in an interview with CNBC’s Sarah Eisen. “Just because they’re high doesn’t mean they’ll drop tomorrow.”
At 79, Marks shows no signs of retreating from his work. He expressed that writing memos is not just a task, but something he greatly enjoys. “They allow me to share my ideas with the investment community, connect with Oaktree clients and employees, and express my creativity,” he said, indicating his intent to continue this practice.
