Howard Marks, Oaktree Capital — 2025-10-12
Memos from Howard Marks 2025-10-12T07:00:00.0000000Z" pubdate title="Time posted: >10/12/2025 7:00:00 AM (UTC)">Oct 12, 2025
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To celebrate 35 years of my memos, I'm thrilled to release this collection of the ones I think are the best.
These memos fall primarily into two categories. Some set out what I consider the enduring truths of investing – from the need for second-level thinking to the importance of risk control, the inevitability of cycles, and the futility of macro forecasting. Others chronicle the most impactful financial events of the last three decades: the dot-com bubble, the Global Financial Crisis, and the sea change in interest rate policy that took place in 2022.
Writing the memos is an absolute joy for me. They serve as the vehicle through which I share my thinking with the investment community, allow me to connect with Oaktree's clients and employees, and serve as my creative outlet. I plan to keep at it.
Howard Marks
October 12, 2025
The Route to Performance
October 12, 1990
The Route to Performance is the first memo I wrote. It articulates what would later become a core part of Oaktree's investment philosophy: that long-term investment success is best achieved through a string of consistently good returns and an absence of poor years, rather than by aiming for brilliant successes, getting there in some years and flopping in others.
First Quarter Performance
April 11, 1991
In the first quarter of 1991, markets swung from extreme pessimism toward more reasonable sentiment, leading to excellent performance for sub-investment grade credit. The pendulum-like fluctuation between optimism and pessimism, fear and greed, and risk tolerance and risk aversion remains one of the most dependable features of the investment world.
How the Game Should Be Played
May 26, 1995
Using sports metaphors to illustrate Oaktree's investment philosophy, I describe how our "game plan" is directed at avoiding strikeouts and achieving a high batting average over time, not at swinging for the fences on every trip to the plate.
bubble.com
January 2, 2000
This was the first of my memos to engender any response from readers! It describes the psychology of market bubbles in the context of a dot-com boom that would shortly become a dot-com bust when equity valuations fueled by excessive belief in the "the new, new thing" fell back to earth.
What's It All About, Alpha?
July 11, 2001
In this memo, I reconcile the investment theory I was taught at the University of Chicago with the reality I encountered in the real world. I provide my take on alpha, beta, risk and return, and, most importantly, market efficiency – and the key implications for investors. If you swallow the efficient market hypothesis, you shouldn't be an active investor. But if you ignore it, you're likely to make critical mistakes.
You Can't Predict. You Can Prepare.
November 20, 2001
This is my first memo focused on the importance of economic and market cycles and the limits on knowledge of the macro future. It outlines a concept that permeates all Oaktree investment activity: we may never know where we're going, but we ought to know where we are, and that knowledge of today's environment should determine our response.
The Realist's Creed
May 31, 2002
This memo serves as an acknowledgement that "I don't know" is often the only reasonable refrain. It encourages investors to eschew macro forecasts and instead focus their attention on evaluating fundamentals and developing specialized expertise.
Returns and How They Get That Way
November 11, 2002
Here I express my view as to where equity returns come from – either growth in earnings or an upgrading of how investors value those earnings – and my belief that relying on the latter might not work in the long run. I also provide my thoughts on a tougher question; how to judge whether a manager truly possesses skill given the presence of significant randomness in the investment world. You can guess what I look for: a long record of consistent but possibly modest outperformance, rather than occasional flashes of brilliance.
What's Your Game Plan?
September 5, 2003
This was my second memo dedicated to the parallels between investing and sports, employing anecdotes from tennis and baseball and emphasizing Oaktree's motto from the beginning: "if we avoid the losers, the winners will take care of themselves."
Us and Them
May 7, 2004
This memo highlights the contrast between two styles of investors: the "I know" school – confident, aggressive, and forecast-driven, and the "I don't know" school – consistent, risk-conscious, and focused on fundamentals. I look closely at personality types, attitudes toward the market, and other aspects of these investment styles.
Hedge Funds: A Case for Caution
October 6, 2004
I set out my thoughts on the hedge fund movement – the hot topic in the investment world at the time – looking at aspects such as scalability and performance. Importantly, I say, nobody should credit any asset class (including hedge funds) with the birthright of a return. It all comes down to whether mispriced investment opportunities are available and whether the investor has the skill required to identify them.
Risk
January 19, 2006
I discuss what risk really means (not volatility!), why it matters, how to think about measuring it, and much more. Ultimately, it's investors' job to bear risk in the pursuit of profit. To do so wisely, they must understand risk and, of course, ascertain that they're well compensated before deciding to bear it. But they can't simply avoid it and hope for great returns.
Dare to Be Great
September 7, 2006
One of the first and most fundamental decisions for investors is with regard to the question of how far out on a limb they'll venture. This memo reflects my thoughts on how investment management clients might best pursue superior results.
The New Paradigm
October 19, 2006
In this memo, I discuss what can happen to managers' motivations when vast sums become available for management in an asset class, with the accompanying ballooning of potential management fees. Looking at developments in buyout funds, the real estate market, and credit investing, I conclude that it's a good time for increased caution.
Pigweed
December 7, 2006
A memo about the meltdown of a hedge fund called Amaranth Advisors, in which I parse the events surrounding its collapse. The fund had been making aggressive bets, and its successes were mistaken for long-term skill instead of than the reality: short-term luck. As usual, the prospect of exceptional profit earned with limited risk turned out to be a chimera.
The Race to the Bottom
February 14, 2007
This memo describes what happens when investors have too much money to invest and they're too eager to put it to work. It represents a timely warning about the capital market behavior that ultimately led to the subprime mortgage meltdown of 2007 and the ensuing Global Financial Crisis.
It's All Good
July 16, 2007
The "all-good trilogy" offers a reminder that good times are unlikely to last forever. In It's All Good , I highlight a few worrisome developments I'd spotted in the market: excessive use of leverage, untested securitization structures, and too-easy access to capital. We all know what happened next.
It's All Good... Really?
July 30, 2007
In this sequel, I describe how the events of July 2007 exemplify the elements that usually serve to initiate the swing back of the market pendulum. It's important to study the way it happened, because while it's folly to think w