Howard Marks & Andrew Marks: Something of Value

The episode begins with introductions of Howard Marks, legendary value investor and co-founder of Oaktree Capital, and his son Andrew Marks, an accomplished venture investor focusing on early-stage startups. The hosts set the stage by highlighting their different investment styles—value versus growth—and their collaboration on Howard's most popular memo, 'Something of Value,' which challenges traditional dichotomies in investing. The episode promises deep dives into their investing philosophies, history, and the importance of family collaboration in asset management.

The core of the episode revolves around Howard and Andrew’s joint memo, 'Something of Value,' which articulates that value and growth investing are not mutually exclusive but interconnected. Howard discusses the memo’s origins during the pandemic, emphasizing open-mindedness, evolving strategies, and avoiding rigid investment mentalities. Andrew reflects on his personal journey from value to growth investing, illustrating how companies like Amazon exemplify the integration of fundamental value with innovative growth. The theme underscores the importance of nuanced, flexible thinking in successful investing.

Howard and Andrew explore how markets and company behaviors have changed over decades, especially with technological advances. Howard emphasizes that modern markets are far more unpredictable and disruptive; hence, the traditional assumption that entrenched business models are safe is flawed. They discuss how the proliferation of information and increasing speed of innovation necessitate a deeper understanding of corporate moats, business models, and qualitative judgments. They also mention how dominant firms like Amazon have leveraged their advantages into new markets, exemplifying continuous growth and adaptation.

A significant portion of the discussion focuses on the art of selling investments. Howard shares perspectives on when to take profits, stressing understanding why an asset was purchased and its future potential. He advocates for viewing selling as an 'unbuy' decision—selling when the fundamentals or opportunities have changed or when a price revaluation occurs. Andrew adds insights into the importance of confidence, judgment, and avoiding emotional reactions like regret. They emphasize making decisions based on knowledge, opportunity costs, and realistic expectations about future cash flows.

Howard and Andrew contrast their approaches to building investment organizations. Howard reflects on how OaktrE’s success stemmed from culture, complementary skills among partners, and a hands-off management style during market booms. Andrew discusses his venture firm’s more focused approach—dedicated to long-term relationships, reputation, and founder support—highlighting the importance of aligning firm culture with investment style. They both agree that personal strengths and enjoyment should guide firm-building strategies.

The episode explores what makes successful startups—especially the importance of exceptional founders with unique judgment and conviction. Andrew underscores that great startups are built by people who think differently, challenge conventions, and possess attributes that are far from average. Howard emphasizes that the rarity of founding truly dominant firms relies on exceptional talent—those who can attract top talent and execute on unconventional visions. The discussion stresses that backing these founders often determines long-term success.

Howard and Andrew analyze how technological progress has affected market efficiency. While modern markets are highly information-rich, successful investors leverage specific qualitative insights, skills, and judgment to gain an edge. Andrew mentions how proprietary knowledge and making better future predictions outperform superficial analysis. Howard discusses the shifting landscape where traditional information gaps have narrowed, making true competitive advantages reliant on distinctive expertise and qualitative assessment of future potential.

Andrew explains his transition to private early-stage investing, advising that personal fit, skills, and enjoyment are crucial. He describes venture as a probabilistic endeavor requiring patience, optimism, and long-term vision, contrasting with his previous conservative, quantitative focus. Howard appreciates the diversity of approaches and emphasizes that each investor should choose strategies aligned with their strengths. Both underscore the importance of understanding one's nature and building firms or portfolios accordingly.

A recurring theme is that investing ultimately depends on superior judgment—an intangible skill that combines deep knowledge, rationality, humility, and self-awareness. Howard highlights that judgment is cultivated through experience, understanding context, and avoiding biases. They agree that computers, despite their analytical power, cannot replace nuanced human judgment, especially in assessing future potential and unconventional opportunities. This human element remains central to successful investing.

The episode concludes with reminders of where listeners can access Howard’s insightful memoranda—freely available online—and encourages continuous learning, humility, and adaptation. Howard shares stories of how his consistent memo-writing, driven by personal insight, built his reputation and informed his investment thinking over decades. The hosts emphasize that successful investing is a lifelong journey of learning, perspective, and disciplined judgment.