Source: Smart Investors
This was an in-depth conversation.
During the 75-minute discussion, Howard Marks, Co-Founder of Oaktree Capital, systematically articulated his investment philosophy and mindset developed over decades—how to tilt the odds in one's favor amid uncertainty and achieve long-term success through consistently stable performance.
Since its founding by Marks in 1995, Oaktree Capital has grown into a global giant in the alternative investment sector, with the latest assets under management reaching approximately USD 218 billion.
The distinctiveness of this dialogue lies in the interviewer being William Green, author of 'Richer, Wiser, Happier,' who has conducted extensive interviews with many of the world’s top investors.
Green was extremely well-prepared, drawing on Marks’ memos and numerous interview transcripts to progressively delve into questions such as: How to set a risk tolerance suitable for oneself? How to identify and rectify misjudgments? How to avoid the risk of 'leaving the table'... These topics were organized in a clear and logical manner.
The interview itself was replete with Marks’ frequent tributes to Buffett and Munger. He not only quoted Buffett’s famous investment aphorisms multiple times but also elaborated on his perspective of Munger.
He referred to Buffett as 'my idol' and expressed admiration for Munger's ability to systematize his natural talents into a comprehensive framework that countless people could reference and learn from.
Howard Marks’ communication style is more accessible than his memos, and despite the nearly 20,000-word length, it is not burdensome to read through.
Below are the key takeaways from this dialogue, covering:
Why Marks pursues long-term, consistent, and stable performance;
What investors can learn from top tennis players;
How to find the risk tolerance suitable for one’s own investment portfolio;
How Marks completed five critical market judgments;
Why his long-term partner Bruce is an outstanding investor;
Why 'specialization' can become a significant advantage in investing;
What are the similarities between the current AI trend and the Internet bubble of the past;
Why he believes most AI companies will ultimately be worthless;
Why he remains highly cautious about Bitcoin and gold;
How he balances family, hobbies, and work.
The dialogue was published on December 13, 2025. Based on its content, it appears to have been conducted prior to Marks’ latest memo (December 9).
Below is the full translation carefully organized by Smart Investor. Enjoy it~
01. As long as you can avoid losers, the winners will naturally emerge.
Green: I would like to start with a very important dinner. In 1990, you attended a dinner in Minneapolis that had an enormous impact on you, not only prompting you to write your first memo but also profoundly shaping Oaktree's investment philosophy. Why was that dinner so pivotal? What did you learn from it?
Marks: That evening, I had dinner with a friend and important client named David Van Koten, who was responsible for managing General Mills' pension fund at the time.
He told me that he had been managing this pension plan for 14 years. During those 14 years, their equity portfolio had never ranked among the top 27% of pension peers, nor had it fallen below the 47th percentile. In other words, for 14 years, it consistently remained in the second quartile.
Interestingly, when looking at the overall results over those 14 years, their long-term performance ranked in the top 4% of all pensions.
Mathematically, this sounds almost impossible. You might say that if you fluctuate between the 27th and 47th percentiles, on average, you should be around the 37th percentile—how could you possibly end up in the top 4%?
The answer lies in this: most investors want to 'soar overnight,' but as a result, they often take a severe fall, which ruins their long-term performance.
Once you suffer a major loss, it takes an extremely long time to recover to where you started.
This realization struck me profoundly, prompting me to write my first memo, titled 'The Route to Performance.'
As you mentioned earlier, it had a significant impact on us later. Knowing you would ask this question, I特意 went back and reviewed that first memo.
There is a simple and straightforward idea: in stock investment, if you can avoid the losers and the years of losses, the winners will take care of themselves.
When we founded Oaktree Capital in 1995, I wrote this down as the company's motto, and it remains so to this day: as long as you can avoid the losers, the winners will naturally emerge.
I believe this is almost the most important principle in investing.
In investing, success does not come from a few high-risk gambles but stems from long-term, consistent, and steady performance.
Green This reminds me that in one of your memos, you mentioned that Benjamin Graham and David Dodd wrote something back in 1940: bond investment has a very unique attribute, which they called a 'negative art.' Could you explain what that means?
Marks At the time, I read the original 1940 edition because the copyright holder of the book invited Seth Klarman to write the preface for the new edition, and Seth asked me to write the content on fixed income.
At first, I was a bit upset. I thought, how can you call what I've been doing my whole life a 'negative art'?
But as I kept reading, I understood what they meant.
Their logic goes like this: suppose there are 100 high-yield bonds in the market, all with an 8% coupon rate. You can roughly predict that about 90 of them will pay off as expected, while the other 10 might default.
In this case, as long as you buy one of those 90 that won't default, it doesn't really matter which one you choose, because they all have the same coupon rate and will yield similar returns in the end.
What truly matters is: avoid those 10 mines that will default.
In other words, the quality of performance does not depend on what you choose, but on what you exclude. The success of investment hinges on how many mistakes you avoid, rather than how many correct decisions you make. This is the meaning of the 'art of negativity'.
In fixed-income investments, you are promised a certain return, and the only variable is whether the bond-issuing company can fulfill its commitment. As long as you filter out those with default risks, the rest will achieve the target returns smoothly.
This is also the meaning of what I often say: 'Winners will take care of themselves.' As long as you avoid failure, the rest will naturally take care of you.
When I started working in the high-yield bond business in 1978, it was this mindset that carried me through. Although I hadn’t systematically articulated these thoughts at the time, deep down, this was already my approach.
Of course, later we began to venture into more areas, such as Bruce Karsh’s distressed debt fund in 1988 and emerging market equities in 1998, which were no longer purely fixed-income investments.
At that point, merely avoiding failure was no longer sufficient; we indeed needed to seek out some winners.
Nevertheless, we have always adhered to 'risk first' as our fundamental mindset. I believe this remains an excellent guiding principle.
A wiser approach is to compete within one's capabilities.
Green, over the years, you have written several memos exploring the similarities between 'investing and sports,' roughly one every decade. And you yourself are clearly a very passionate tennis enthusiast.
I particularly like one of the articles, titled 'What’s Your Game Plan,' which I believe was written in 2003. In that article, you discussed top tennis and baseball players and the lessons they offer to investors.
When I was re-reading this article, one sentence left a deep impression on me: for them, it is crucial to 'compete within their capabilities.'
However, at the same time, if you observe the greatest tennis players, you will find that there are moments when they must become extremely aggressive. This also echoes what you once told me: 'Avoiding risk often also means avoiding returns.'
Could you elaborate on the subtleties involved here? In other words, the focus is not on avoiding risks but on how to rationally take on risks.
Marks: It's quite a coincidence, but I just had lunch with Charlie Ellis (founder of Greenwich Associates) yesterday.
In 1975, Charlie wrote an article that initiated an entire framework of thinking about risk control. The article was titled 'The Loser’s Game.'
In the article, he mentioned that there are actually two ways to play tennis:
Professional tennis players win points mainly because they hit winning shots. Because if they merely return an ordinary shot, their opponent can immediately counter with a winner. Therefore, they must focus on offense, and they can do so because they have exceptional control over their shots.
In professional tennis, there is even a specific statistic called 'unforced errors,' as the number of mistakes made is very low.
But amateur players are completely different. They don’t have such strong control and can only rely on one thing: avoiding mistakes.
If I can hit the ball over the net and keep it in bounds ten times in a row, my opponent is likely to make a mistake by the ninth time. I win the point not because I hit a winner, but simply because I didn't make an unforced error.
The key difference is this: investing is not like professional tennis. We have far less control over outcomes than tennis players do. Markets are filled with uncontrollable randomness and uncertainty.
In such an environment, if you're always thinking about 'hitting a winner'—that is, pursuing explosive returns through aggressive bets—you're very likely to be 'eliminated' by the market.
I believe a wiser approach is to compete within your capabilities. Avoid actions that go beyond your circle of competence, avoid taking on unnecessary large risks, and instead focus on consistency and long-term expertise.
This is precisely the philosophy we at Oaktree Capital have consistently adhered to.
03. You must survive even on your worst days.
Green: Over the years, you've also written extensively about cases that seemed dazzling at first but ended in disaster, such as the Amaranth Energy Fund blowup in 2006 or the collapse of Long-Term Capital Management (LTCM) in 1998.
When you look back at those institutions that didn’t make it while Oaktree continued to grow during the same period, what do you think is the most important lesson for both professional investors and ordinary individuals?
Marks: Over the past decade or so, the quote I’ve cited the most often is usually attributed to Mark Twain: 'It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.'
If you think about it carefully, no major catastrophe ever started with 'I don’t know, but I’ll proceed cautiously…' What really pushes people off the cliff is the confidence that says, 'I’m 100% certain X, Y, Z will happen,' followed by placing a massive bet based on that belief.
If your premise is wrong and you adopt an extremely aggressive strategy, in the long term, you may simply be eliminated.
Long-Term Capital is a classic example. They believed their model was foolproof and could consistently generate extremely small but stable returns, so they used substantial leverage to amplify these returns. But once those tiny gains disappeared, losses were also magnified, ultimately leading to being 'swept out' by the market.
Amaranth is another example. Their aggressive bets, incorrect judgments, and overconfidence naturally led to the same result: elimination.
Green, you wrote a brilliant memo that I remember was titled 'Pigweed,' which was a less flattering nickname for Amaranth. There’s one sentence I particularly liked: if you are confident in your ability to weather the storm, then you can successfully invest in highly volatile assets. But if you lack that certainty and face redemption pressures or margin calls, even a small fluctuation could mean the end.
You put it very succinctly: you must have the ability to endure the low points of life. Could you elaborate on that? It sounds simple, but it’s actually an extremely crucial principle in investing.
Marks, one of my favorite analogies is this: never forget the person who was six feet tall but drowned in a stream with an average depth of only five feet.
Many people need some time to grasp this idea. But if you think about it carefully, you’ll realize that 'surviving on average' is meaningless and irrelevant.
You must survive every day to reach the finish line. This means you must survive even on the worst days.
If your portfolio or a particular investment is structured with the goal of maximizing outcomes when everything goes as planned, then you are likely exposing yourself to the risk of being 'swept out' by the market.
Ultimately, many investment management decisions boil down to one question: do you want to maximize profits when everything goes smoothly, or minimize losses when things go awry?
You cannot maximize both at the same time. There is no strategy in the world that allows you to earn the most during good times while remaining unscathed during bad times. You have to make a choice.
This is actually consistent with the 'loser's game' we discussed earlier.
In the investment industry, so-called 'winning' essentially means achieving excess returns. So, how do you achieve that? There are only two ways: holding more assets that appreciate, or avoiding more assets that depreciate, or possibly both.
But most people cannot balance the two. Those who lean towards offense may be able to capture more winners; those skilled in defense are better at avoiding losers.
Very few people can truly excel at both simultaneously.
The majority of people must make a choice, and this choice should be made consciously.
How many people have truly sat down to think: Am I going to win by 'catching more winners,' or by 'avoiding more pitfalls'?
If you haven’t seriously answered this question, how can you expect to find a successful path to investing?
04 Find Your Own Risk Tolerance
Green, you wrote a memo closely related to this topic in 2024, titled 'Ruminating on Asset Allocation.' In that article, you introduced an important and highly practical concept: finding the balance you need between 'offense' and 'defense,' and between 'pursuing maximum returns' and 'prioritizing capital preservation.'
You particularly emphasized that the key is to establish one’s own target risk tolerance and continuously recalibrate based on that. I find this to be an inspiring framework.
Could you elaborate further on this issue? How should we determine our own risk tolerance? For instance, what factors influence this judgment? Psychological resilience, responsibilities, investment horizon, and so on. What kind of process should we undergo to make this decision?
Marks: I often wonder: when people make these investment decisions, do they really adopt a systematic approach? My assessment is that many people haven’t seriously considered this issue.
Their thinking might simply be: 'Alright, I’m going to start investing.' But behind this statement, it often just means: 'I want to buy something that makes money.' It sounds too casual and hasty.
I believe that especially when you are an institution or bear the responsibility of managing funds on behalf of others, you must address this issue in a more rigorous and systematic manner.
You may recall that eight years ago, I wrote a memo titled 'Calibrating.' In it, I proposed an idea: imagine there is a car in front of you with a speedometer ranging from 0 to 100, representing different levels of risk exposure. 0 indicates extreme conservatism, while 100 represents a willingness to endure the highest degree of volatility and risk.
I believe that whether you are an individual investor, institutional investor, or professional manager, you should clearly understand: under normal circumstances, where your 'reasonable risk level' roughly falls on this scale.
The factors you mentioned earlier are all crucial: for example, age, asset size, balance between income and expenses, family responsibilities, years until retirement, required rate of return, and most importantly—your psychological resilience.
After integrating these factors, you can make a rough judgment about where you stand within the 0 to 100 range.
For instance, if you are young, have fewer family burdens, sufficient time to withstand short-term fluctuations, and the ability to recover even if losses occur, you might be able to tolerate a risk level of 80 or even 85.
Of course, I must add that in reality, there is no clearly defined portfolio that can precisely tell you, 'This is an 85-point risk level' allocation. This concept is more of a framework for thinking about problems rather than a mathematical formula.
Once you have clarified your risk tolerance, the next question is: do you plan to maintain this level consistently? Or will you make rhythmic, dynamic adjustments based on market fluctuations and opportunities?
If you choose to make adjustments, at this moment, to what point do you wish to adjust your risk level? This decision itself should be an ongoing, continuously updated dynamic process.
In my view, thinking about investment in this way is a highly constructive approach.
05. Acting every day is not wise in itself
Green, I often reflect on this question myself. Over the past week, while re-reading some of your memos, I have been pondering this issue.
Because in one of your memos titled 'What Really Matters,' you wrote that investors should try to keep their hands off their portfolios most of the time.
And in an earlier piece, 'Selling Out,' you mentioned: When I was young, there was a popular saying, 'Don't just sit there, do something.' But in investing, I would reverse that: 'Don't just do something, sit there.'
So there is a certain tension here: for most of us, doing nothing is often the better choice, right? But at the same time, there are moments when recalibration is indeed necessary.
A few weeks ago, I had dinner with Nick Sleep (one of the founders of Nomad Fund), and I told him that I am somewhat worried now. After all, I've done well over the past 16 years, thank goodness, and I really don’t want to give back 50% of the gains.
He just said to me, "Don't make trouble, Williams, really, don't make trouble." He said that if it drops by 50%, it doesn't matter; you can just buy more, and everything will be fine.
As an ordinary investor, how do you make trade-offs or balance on this issue yourself?
Marks: First of all, I would like to say that these issues we are discussing today, as well as many other questions you might ask me later, do not have so-called standard answers.
There is only a series of possible options, none of which is perfect.
The question is where you want to position yourself along this spectrum.
Generally speaking, you don't want to be at either extreme. For example, you neither want to trade every day nor refrain from trading altogether. Most people neither pursue maximum returns 100% of the time nor focus solely on capital preservation.
This is a choice, and a personalized one. The key point is: there is no right or wrong here.
For me personally, I think Nick’s attitude is slightly idealistic.
I believe there are indeed moments—not every day, but occasionally—when the market presents opportunities for you to be slightly more aggressive or slightly more defensive.
Of course, I wouldn’t make too many adjustments because it’s easy to get it wrong. But I also wouldn’t let all these opportunities pass by.
And I believe it is precisely through doing this that we have created some favorable outcomes for our clients.
When I was writing the book Mastering the Market Cycle, I discussed this issue with my son Andrew.
I said that I think our judgment on cycles is generally correct. He replied to me, 'Yes, Dad, that's because you've only made five such judgments in 50 years.'
Therefore, there certainly aren't wise actions to take every day. Acting every day is not, in itself, a wise approach.
By the way, that memo titled What Really Matters might be one of the least noticed and least commented pieces I’ve ever written, but personally, I consider it one of my better ones.
I told a story in it about how Fidelity once conducted a study concluding that the best-performing accounts belonged to people who had passed away.
Excessive trading is a mistake. Not only does it fail to generate returns overall, but it is also costly and could even backfire.
This is because if you excitedly buy at market peaks and despondently sell at market troughs, you are doing exactly the opposite of what you should be doing.
Overall, adopting a buy-and-hold strategy is far superior.
I simply believe that for those who possess both the ability and the right mindset, there are indeed moments when, if the market appears fragile, you can adopt a slightly more defensive stance; and when the market seems generous, you can be slightly more aggressive.
06. Wait until the judgment is strong enough and the probability of success is high enough before placing a bet.
Green, over the years, you have written extensively about the futility of macro forecasting and macro judgment, repeatedly emphasizing that they should be used sparingly. So, when I read one of your memos, I was particularly moved.
I think the memo might have been 'Taking the Temperature,' written around 2023. In it, you discussed making five highly successful market judgments in your lifetime, and these five were not spread out over 50 years but concentrated in the past 25 years.
Could you explain the subtle differences here? I think this point is very important because there are indeed moments when the market becomes so irrational that you seem to temporarily set aside your usual vigilance and disdain for macro forecasting.
Marks: Indeed, there were only five times, and they all occurred in the past 25 years.
What does this mean? It means it took me a full 30 years to gather the courage and feel I had enough insight to make a judgment.
The first time was on the first day of 2000, regarding the tech bubble.
Notably, at the time, I knew nothing about tech stocks, technology itself, the internet, or anything similar.
I call this process 'taking the temperature' because, essentially, it's not about predicting the macro environment but observing the behavior of people around me.
Buffett summarized it most succinctly: The more reckless others act, the more cautious we must be.
This is known as contrarian investing, or one could say counter-cyclical investing.
But as my son put it, over the past 50 years, there have been only about five moments that truly had overwhelming persuasiveness—where the logic was clear, the evidence compelling, and the likelihood of being right extremely high. And that’s why we made up our minds to take action.
I can frankly say I’ve never made those decisions in a state of 'absolute fearlessness.' But at such moments, you get a strong sense: this time, it’s probably right.
So, it’s worth a try.
But no matter how confident you are, never overestimate probabilities in investing. Even if you’re convinced you're right, you shouldn’t assume it’s an 80% chance of success. A more realistic assessment might be 70-30, or even lower.
However, I believe that as long as you know what you’re doing, these are moments worth betting on. Of course, no one gets it right every single time.
But what if it’s not five times, but fifty, or even five hundred? If I make a 'buy' or 'sell' decision every few days, for a total of five thousand decisions, what do you think the outcome would be?
I think my success rate would probably be around 50-50.
Here’s the key point: You can’t operate like that all the time. You need to wait for moments when your judgment is strong enough and the odds sufficiently high before making a move. Then, pray that this time, you’re right.
07. Bureaucracy and Outstanding Investment Are a 'Toxic Combination'
Green, you once quoted a passage from David Swensen, one of your favorite quotes.
He said, 'Active management strategies require institutions to adopt non-institutional behaviors, creating a paradox that very few can escape. To build and maintain an unconventional portfolio, one must embrace a highly unconventional approach to asset allocation, which is often seen by mainstream consensus as nearly equivalent to irresponsibility.'
I have always been curious about how you built a company like Oaktree Capital — one that has continued to grow in size without becoming bureaucratic, overly influenced by consensus, or succumbing to inertia and conservatism.
Marks: I don’t think we’ve become institutionalized; we’ve simply grown in size.
I suppose I just don’t like that kind of institutional life.
I’ve always felt that the most profound lessons one learns in life often come at the earliest stages. My first job was at Citi, where I worked for 16 years. It was there that I clearly realized I didn’t like institutionalization.
At the bank, if you said, 'Can we try this approach?' or 'Can we pay people this way?' they would often respond, 'No, there are institutional constraints.' For me, 'institutional' is a terrible word.
By the way, when I was a kid, 'living in an institution' meant being in a mental hospital (laughs). In any case, I have consciously avoided any bureaucratic tendencies.
Around 2005, I wrote a memo called 'Dare to Be Great,' which was largely a critique of bureaucracy and committee systems.
Think about it: when I was 29, still extremely inexperienced, I was appointed head of research at Citi. They made me join five committees, with meetings totaling 16 hours a week, and at that time, I wanted to shoot myself. I’m not much of a talker, I don’t have much patience, and frankly, I don’t enjoy listening to others much either.
I find that these meetings often continue until the person who most wants them to go on is satisfied. And if you happen to have an outstanding, unconventional insight—like the kind Svenson referred to—how could you possibly convince the majority of a ten-person committee to support you? How could you make most of them believe you are right?
If you have a young Warren Buffett, the best approach is to let him do his thing, rather than tell him, 'You can't act until you’ve convinced the majority of the committee.'
In medical terms, there are drugs that are 'contraindicated,' meaning they cannot be used simultaneously. I think bureaucracy and exceptional investment management follow a similar principle.
For example, in September 2008, at the moment when Lehman Brothers collapsed, we had just completed fundraising for what was then the largest distressed debt fund in history—three times larger than the second-largest fund—and we had $10 billion at our disposal.
The financial system appeared to be on the verge of collapse. The question was: Should we deploy this capital?
After Bruce Karsh and I discussed it, we reached a consensus: Yes, we should invest. That fund was managed by Bruce, who was extremely decisive. Over the following 15 weeks, we invested an average of $450 million per week, deploying a total of $7 billion within three months.
If this decision had been left to a committee, it would have been impossible to achieve!
Fortunately, we had already raised the funds, so there was no need to lobby clients further.
You can never raise capital during a crisis, and often the best opportunities arise precisely when everyone is panicking and paralyzed into inaction.
I remember a friend who worked at a newspaper asking me, 'What are you guys doing?' I said, 'Buying.' He looked at me as if we were crazy.
Of course, this is an unconventional approach and naturally a very uncomfortable decision. We are not sure if we are right. But it 'feels right,' so we went ahead with it. You have to overcome that instinctive discomfort.
The one thing I would not do is try to convince 20 people that I am right.
08. A truly healthy partnership must be built on this understanding.
Green: So what kind of investor is Bruce exactly? To be honest, I rarely hear him speak in public. Until a few days ago, I listened to a podcast by Oaktree featuring the three founders — you, Bruce, and Sheldon — reflecting on the founding history of the company.
I was quite surprised: he sounded so composed, wise, and extremely principled, with a strong fixation on family, character, and long-term institutional building. Could you tell us more about him? He is clearly an indispensable part of Oaktree Capital's success.
Marks: Yes. He reached out in 1987 when I was still at TCW.
Bruce, who originally came from a legal background, once helped Los Angeles' most influential figure, Eli Broad, with investments. He proposed setting up a distressed debt fund, and we actually did it in 1988, making it one of the earliest such funds in financial institutions.
The first fund raised only $65 million, and after the second round of fundraising, we had a total of $96 million. At the time, we thought, 'Wow, we already have control of all the money in the world.'
But the key point is that Bruce’s analytical ability is extremely strong. He is like a chess master, and in fact, he is one, always thinking several moves ahead of others.
He is ambitious, intelligent, focused, and possesses exceptional execution capabilities.
We have been working together for nearly four decades. This collaboration is one of the most precious parts of my life, second only to the profound friendships within my family.
A few weeks ago, Warren Buffett wrote a letter announcing his retirement. In it, he spoke about his relationship with Charlie Munger, saying that Charlie was like an older brother who always provided him with guidance and protection.
In my view, Charlie acts as the philosopher, offering foresight and wisdom, while Warren serves as the executor, analyzing and making decisions.
My favorite line from the letter is this simple yet profound statement: We never said, 'I told you so.'
The relationship between Bruce and me is similar.
He is nine years younger than me, and we both sincerely acknowledge that the other can do things that we ourselves cannot. A truly healthy partnership is built on this recognition.
If you start thinking, 'I can do my job, and I can also do yours,' then your collaboration has reached its end.
We have always recognized each other's uniqueness and never blamed each other for mistakes. For instance, in the fourth quarter of 2008, investing $7 billion would not have been possible without such trust and support.
What you need is someone standing behind you saying, 'I support you,' rather than coldly remarking, 'If it were me, I definitely wouldn't have done it this way.'
You need to establish some form of cognitive advantage in the asset classes you are involved in.
Green: There's one more point that I find particularly important – it was Bruce who first approached you with the idea of entering the distressed debt market. This also brings up a core argument that you have repeatedly emphasized in many of your articles.
As early as in the 2014 article 'Getting Lucky,' you wrote that one of the easiest ways to succeed in investing is to remain in an 'inefficient market.' In fact, in your 1995 piece 'How the Game Should Be Played,' you had already pointed out that the key to achieving excess returns lies in knowing more than others, focusing on details, and building a true advantage at the knowledge level.
Could you talk about this topic? Because I see similar traits in many great investors.
For instance, your friend Joel Greenblatt succeeded by mastering 'special situations' investments; and Bill Ruane once told me, 'I just try to understand seven or eight good ideas better.' They both focus deeply on a small number of targets within relatively inefficient markets, which seems to play an absolutely central role in your paths to success.
Marks: I often say that the most important question in investing is: What are you going to win with? In other words, where does your competitive edge lie? Because success essentially means doing better than others.
But you can't simply rely on 'I'm very smart,' because there are too many smart people in this world, especially in the investment industry, where no one is stupid; nor can you say 'I graduated from a prestigious university,' which doesn’t mean much; and certainly not 'I possess some universal intuition that allows me to beat the market across all asset classes,' which is completely untenable.
You must build some kind of cognitive advantage in every asset class you participate in.
This usually includes two aspects: one is developing a correct methodology and adhering to it consistently; the other is having access to more information or gaining deeper insights than others.
Building an informational edge is not easy, especially in highly regulated and transparent markets like the U.S. However, you can still gain an edge in two ways: processing data better or discovering more and seeing deeper within the same dataset.
Or, as you mentioned earlier, choose to enter a market that is inherently inefficient, meaning establishing a leading advantage in markets where information has not yet reached full symmetry.
The core question remains: If you have no competitive edge, what makes you think you can win?
Investing is an extremely competitive game, where participants are mostly smart, proficient with numbers, skilled in using tools, and fully committed. You must find a genuine foothold: focus is one way, while seeking inefficient markets is another.
To help others understand the concept of an 'efficient market,' I often use an example:
Imagine that in 1969, right after I graduated from the University of Chicago, an underground bookmaker approached me. He said, 'I set odds for football games. If I could predict which team wins the coin toss, I could make a lot of money. Now, I’ll give you 15 PhDs and a supercomputer—you handle the prediction.'
But if the coin is fair, there’s simply no possibility of prediction. You would never be able to gain an advantage—it would all be wasted effort.
That’s what an efficient market is: no edge, unbeatable.
In contrast, an 'inefficient market' refers to a place where excess returns can be achieved through effort and skill.
In my essay 'Getting Lucky,' I mentioned that I was indeed fortunate to encounter some such markets early in my career.
For instance, in August 1978, I received a call that changed the trajectory of my career. It was from the head of Citi's bond department, who said, 'There’s a guy named Milken in California doing high-yield bonds—go see what it’s about.'
At that time, these bonds were called 'junk bonds,' and almost no one wanted to touch them due to their high political risk and poor reputation.
Particularly the public pension funds in the United States, which were one of the largest sources of investment capital in the market at that time. It took me 18 years to land my first public pension client. They simply did not want to be labeled as 'investors in junk bonds.'
But my reaction at the time was: Fantastic! You mean there’s an asset class with almost no competition, where no one wants to buy even if prices are low?
This could imply that it is mispriced, undervalued, and a market full of opportunities.
The market mechanism works like this: If an asset is chased by everyone, with people scrambling to buy it at any cost, it’s unlikely you’ll find bargains in such a market.
When I joined Citi in 1969, the company was a staunch buyer of the 'Nifty Fifty' stocks. These were considered the finest companies in the U.S., often described as 'buy and forget.'
However, if you had bought these stocks on the day I joined and held them firmly for five years without wavering, you might still have lost 95% of your principal. This is because, at the time of purchase, they were already regarded by the market as 'greater inventions than sliced bread.'
Therefore, we must remain vigilant at all times.
True opportunities often lie along less-traveled paths.
10. In uncertainty, try to tilt the odds in your favor.
Green, you just mentioned the 'Nifty Fifty' and their subsequent collapse, which had a profound impact on your career and investment philosophy.
I have been repeatedly reflecting on a key issue you mentioned in several of your memos: how should we respond to extreme external events, such as stock market crashes, pandemics, wars, or other completely unpredictable scenarios?
In the second memo you wrote in 2020 about 'uncertainty,' you proposed an approach: we need to acknowledge that these events will eventually occur, and when economic conditions, market sentiment, and investor behavior make the system more vulnerable to shocks, we should make our portfolios more conservative.
Could you elaborate further on this topic? Because 'how to face uncertainty' seems to be one of the core tenets of your investment philosophy.
Marks: Indeed.
There is a saying I particularly like: there are two main types of people who lose money in the market—those who know nothing and those who think they know everything.
I hope I never fall into the first category; but I also remain vigilant not to become the second.
I have always firmly believed that the macro future is unpredictable. But sometimes, we can find clues that help us sense the direction things might take.
This is the logic behind my book 'The Cycle': we cannot know where the market is heading, but we can assess where we currently stand and determine where the market is inclined to move.
For example, when you observe years of continuous market rallies, with prices and valuations at high levels, credit spreads becoming extremely narrow, and investors starting to ignore risks and exhibit exaggerated sentiment… at this point, you don’t need to predict the future; you just need to acknowledge that the odds of success are declining.
Therefore, you don’t need to predict the future; you only need to observe the present.
As I’ve said before, the five most important investment decisions in my life were not based on forecasts but rather on observations.
This is also a phrase I often repeat: We don’t need to know where we are going, but we must know where we currently stand.
Is the current valuation too high? Are risks being underestimated? Is market sentiment overheated? If the answers to these questions are yes, then you should exercise restraint and reduce aggressiveness.
This approach is far more reliable than 'predicting future trends.'
Additionally, regarding that book, I actually didn’t like its main title much. I originally wanted to use a more academic name, but the publisher insisted on this title, saying it would sell better (laugh).
However, I really like its subtitle: 'Getting the Odds on Your Side.'
This phrase precisely captures the key point I want to convey: You can never control outcomes, but you can try to increase the probability of success.
When the market is at a cyclical low, the odds are in your favor; when the market is at a high, the odds are against you. This 'sense of probability' doesn’t guarantee profits in the coming year, but it helps you make more advantageous long-term decisions.
The essence of investing is not about pursuing certainty but about trying to tilt the odds in your favor amid uncertainty.
11. Do not fight objective reality with subjective wishes.
During the five years I spent writing my book, one realization had the greatest impact on me: we must make decisions based on the future, yet the future itself is inherently unpredictable.
To be honest, I owe this profound understanding largely to your influence. Could you elaborate on this topic? I've noticed that almost all great investors share this ability—they acknowledge the unpredictability of the future yet remain capable of making rational judgments amidst uncertainty.
Take Edward Thorp, for example, whom you mentioned—he’s a quintessential figure. He never engages in games where the odds aren’t in his favor; he only bets when he holds a probabilistic edge. Could you expand further on this principle?
Marks I do think about this often.
Buffett explains this beautifully, often using baseball as an analogy. He says that as investors, you need to stand in the batter’s box and wait for the perfect 'pitch' to come along.
But the prerequisite is knowing what constitutes a 'good pitch' versus a 'bad pitch.'
He once recounted the story of Ted Williams, who was not only an exceptional hitter but also meticulously optimized his batting performance. Williams divided the strike zone into 18 smaller sections, analyzing the success rate of hitting from each area. He knew which zones allowed him to hit with power and which ones would likely result in a strikeout.
Investing works the same way. You need to be aware of your 'areas of advantage' and then patiently wait for the right opportunity that suits you.
What Buffett emphasizes is patience and selectivity rather than frequent action. He says investing isn’t like baseball—where missing three good pitches results in an out—but in investing, you can wait indefinitely. No one forces you to swing.
Of course, this doesn’t apply to everyone. Buffett doesn’t worry about being fired, but those of us managing money for others don’t enjoy such freedom (laughs).
If you remain inactive for several consecutive years, clients may leave. Nevertheless, patience remains an essential quality.
You shouldn’t jump on the bandwagon just because others are enthusiastic about a certain asset class. You need to know what you’re waiting for and what you’re good at, set your criteria in advance, and act when you believe 'the odds are in your favor.'
These are the true disciplines of investing.
Green: I think there’s another related but equally critical lesson that I’ve been trying to internalize from you over the years — don’t deceive yourself, and don’t harbor illusions about the market environment we’re in.
I always remember a quote from Peter Bernstein that you’ve referenced before. He said the market is not a machine that “sympathizes with people.” It won’t automatically grant high returns just because you desire them.
Can you elaborate on this perspective?
Marks: At its core, the key is not to fool yourself.
There’s a quote by Charlie Munger that I really like. He often references the ancient Greek philosopher Demosthenes, who said, “People always believe what they want to believe.”
We do tend to do this, and it’s extremely dangerous.
For instance, if you’re a stockbroker earning commissions, you naturally tend to believe that “there’s always something worth buying in the market.” That way, you have a reason to keep urging clients to buy, ensuring you continue making money.
But there are times when there really is nothing worth buying in the market.
You have to acknowledge this, be more mature, patient, and restrained. Do not fight against objective reality with subjective wishes.
At its core, all of this represents a way of thinking: you need to be mature, rational, calm, understand yourself, understand human nature, know how biases affect judgment, and know how money is actually made.
Then, when a truly good opportunity arises and the odds are in your favor, you hit the gas pedal hard and go all out.
My personal approach is to always maintain some level of investment in the portfolio, but adjust the intensity of offense and defense according to the environment.
There are times when you should be more conservative, times when you need to dare to act, and during truly critical moments, you must strike without hesitation.
12. Munger turned his talent into an entire system.
Green: You’ve also mentioned that Charlie Munger made his real fortune through just four major concentrated bets during his lifetime.
Marks: Charlie often says that all his money was made from four big concentrated bets.
Green: Over the years, you’ve written quite a few articles about Charlie. I remember you once quoted a brilliant line of his, which I believe he said during one of your meals together: “Investing isn’t easy; anyone who thinks it is, is a fool.”
Could you talk about what you've learned from Charlie? Not just about investing, but more importantly, about 'how to live a good life.'
Marks: Charlie is truly a genius. He reads extensively, thinks deeply, and can immerse himself in his own world of thoughts all day long.
One of his most representative contributions is the concept of 'multiple mental models,' later referred to as the 'latticework theory.' It’s essentially like an investor's toolbox.
Ultimately, a significant part of an adult's work, especially for investors, involves 'pattern recognition.'
If you live long enough, observe carefully enough, and add a bit of intelligence, you'll gradually develop this ability: when you see something happening, you won't need to analyze it from scratch: 'What is this? Why? What does it mean? What should I do?' You’ll instinctively realize: 'I’ve seen this before; I know how to handle it.'
And to achieve this, you need to build your own 'toolbox,' capable of recognizing which tool or model to apply in different scenarios.
This is where Charlie's strength lies. He is not only extremely intelligent but also profoundly thoughtful, with a highly systematic way of thinking.
He is also very straightforward and never beats around the bush. Regardless of who he's speaking to, the setting, or whether it’s politically correct, he always expresses his opinions directly.
He is a kind person, but he doesn't mince words. His style is, 'If I think it’s right, I say it.'
The title of his biography captures his essence perfectly: 'Damn Right.' If you ask him, 'Charlie, do you really think that?' he would reply, 'Of course, damn right!'
What I admire most is that he not only possesses talent, but more importantly, he has transformed that talent into an entire system. His abilities are structured, methodical, and framework-driven — this is what ensures longevity.
Moreover, these ideas profoundly influenced Buffett.
One of the most famous examples was when he persuaded Buffett to abandon the 'cigar butt' strategy — which involved picking up companies with extremely low prices but poor fundamentals — and instead invest in companies that are truly excellent, albeit at a reasonable price.
It can be said that this philosophy directly shaped the Buffett we know today and contributed to the success of Berkshire Hathaway.
13. The current state of AI indeed bears the strongest resemblance to the internet bubble of the past.
Green: You just mentioned 'pattern recognition.' There’s a lot of interest now in how you view the current market environment. I know you’ve just returned from a three-week trip across Asia, where you met with many clients and were undoubtedly asked this question frequently.
In August, you wrote an article mentioning that the market had shifted from being 'overvalued' to becoming 'concerning.'
So I’d like to ask you: if we place the current moment on the historical pendulum spectrum — oscillating between greed and fear, optimism and pessimism, risk appetite and risk aversion — which past period do you think it resembles most? For instance, 1973–74, 1999–2000, or 2007–08?
If you believe we have not yet entered an 'extreme phase,' what is your basis for making such a judgment?
Marks: I am not constantly monitoring market data day by day, so I cannot tell you precisely where we stand on the pendulum at this very moment.
But if I have to draw an analogy, I think the current situation is fundamentally most similar to the dot-com bubble of 1998–2000. Although the magnitude is different, the logic is similar.
The 'Nifty Fifty' episode was somewhat different. It wasn’t driven by technological imagination but rather revolved around already excellent companies with stable fundamentals, and the bubble didn’t focus on new innovations.
Take, for example, the bubble from 2005 to 2007, which was driven by subprime loans and MBS (mortgage-backed securities). It wasn’t about technological transformation but rather a misallocation caused by financial innovation. No one thought subprime loans would change the world; people just thought they could sell more houses and securitize more loans.
But the internet was different—it truly was a technology that would fundamentally change the world.
And this time, I think it’s similar: the power of artificial intelligence is real, and it may indeed change the world.
But what’s different from back then is that in 1999, we had a much clearer idea of how the internet would take root, how it would form business models, and how it would make money.
At that time, the excitement was focused on e-commerce, and today, e-commerce has indeed become a pillar industry. Those visions have largely come true.
But now, to be honest, I haven’t heard anyone clearly, coherently, and specifically explain: In what ways will AI change the world? What business models will it create? How will people make money from it? What fundamental changes will it bring to our lives?
I’m no expert in this field—in fact, I’m far from being one—but so far, most of the answers I’ve heard have been rather vague.
But it has indeed sparked the imagination. Behind almost every bubble, there’s something new that ignites humanity’s fantasies about the future.
In 1969, it was growth stocks; in 2006, it was subprime mortgages; in 1999, it was the Internet; in 1720, it was the South Sea Company; and in 1620, it was Dutch tulips.
Bubbles always take off from the imagination of humanity.
You will never see a bubble in a lumber company because it is too easy to understand, too realistic, and too uninteresting.
But once a new thing full of unknowns appears, people start fantasizing: 'Can trees grow all the way to the sky?'
Bubbles always occur where there is the most fantasy.
Green, you had an exceptionally insightful conversation with Edward Chancellor, the author of 'Devil Take the Hindmost.' I particularly remember your mention during that talk that this book greatly influenced you during the dot-com bubble of 2000.
In that dialogue, you made two very bold predictions: first, artificial intelligence will change the world; second, most companies currently 'betting on AI' in today's market will likely end up worthless.
You also pointed out that once investors begin leaping to conclusions, thinking that an 'irresistible trend' necessarily means 'guaranteed profits,' that is precisely where risks begin to accumulate.
Marks: Maybe I should go back and read that memo again (laughs).
But you're right—'changing the world' is one thing, and 'making investors money' is another.
Buffett once said something at a shareholders' meeting around 2000 that left a deep impression on me. The gist was: 'The Internet has undoubtedly enhanced productivity, but whether this can translate into corporate profitability remains highly uncertain.'
I think this statement applies equally to AI.
If AI can maintain GDP levels while reducing the workforce, technically speaking, this indeed implies greater efficiency or higher productivity.
But the question is: does this really mean profitability? Who will be the ultimate beneficiary? To whom will the cost savings flow? Will they become corporate profits, or will they be eroded in price wars?
No one can say for sure.
Green, you often remind people to ask themselves: 'In this situation, what is most likely to go wrong?'
Although none of us can predict the ultimate outcome of AI, as of now, what mistakes do you think investors should particularly avoid?
Marks, I have witnessed many typical errors during periods of market euphoria, and the two most common are:
First, one cannot assume that today's leaders will continue to lead in the future. It might happen, but you cannot bet everything on that assumption.
Second, it is also wrong to buy laggards simply because the leaders appear overvalued and the laggards seem cheap.
This is what is known as the 'lottery mentality': the probability of these companies succeeding is very low, but if they do succeed, the returns can be substantial. The problem, however, is that they are highly unlikely to succeed.
Many people are now investing in pure AI concept companies, which have nothing except the concept of AI. This is a classic 'binary gamble' – either you soar or you lose everything.
By comparison, some choose to invest in large technology companies that are already profitable. Even if AI is merely an incremental part of their business, they still generate stable cash flows, making them much less risky.
This brings us back to our original question: How exactly do you want to play this game?
Are you going to bet on a startup with no revenue, no profits, and reliant on AI storytelling? Or will you buy into a company with solid profitability where AI is just an added bonus?
Whatever your choice, you must understand your own style and recognize the type of risks you are taking.
14. Remaining cautious about Bitcoin and gold
Green: Speculation around gold and Bitcoin is also heating up. For example, gold recently broke through $4,000 per ounce, while Bitcoin prices have been volatile at high levels.
I remember you once wrote a line in a memo that left a deep impression on me: 'You either believe in gold or you don't, just like believing in God or not.'
You also said, 'If an asset does not generate cash flow, it cannot be valued through analysis.' Personally, I’ve never convinced myself to buy Bitcoin.
So how do you view Bitcoin and gold? Do you think they should have a place in an investment portfolio?
Marks: At Oaktree Capital, we have always considered ourselves value investors.
Value investing means determining the intrinsic value of an asset and then assessing whether its market price is undervalued. The 'intrinsic value' is measured by the future cash flows it can generate.
For example, if I own a building that generates $1 million in net income annually, and I want to sell it to you, we can negotiate the price based on your desired rate of return.
If you require a 12% return, you might only offer $8 million; if I am willing to accept a 9% return, the price might be negotiated at $11 million.
This is value investing. It has an 'anchor,' a central reference point.
However, if you are buying gold, Bitcoin, diamonds, or artworks, which do not generate cash flows and therefore lack intrinsic value, what basis do you use to evaluate their worth?
I sometimes use oil as an example. In 2007, oil prices surged to $147 per barrel, but six months later, they dropped to $35. Yet, the oil itself did not change, nor did market demand fundamentally shift.
The price fluctuation depended entirely on what the market was willing to pay, making analysis lose its foundation.
I recall the gist of my memo was this: You can buy gold because you believe in it, think it will rise, or consider it a store of value. But you cannot analyze it like a stock to determine if it is undervalued.
I still stand by this view today.
For instance, buying gold last year did yield substantial profits. However, I checked a piece of data before lunch: if you had purchased gold at the end of 2010, the annualized return up to now would be approximately 7.7%; in contrast, the annualized return of the S&P 500 Index during the same period was 12.7%.
Therefore, while gold is not a poor investment, it can hardly be considered an outstanding one. One should not overlook its mediocre long-term performance simply because of recent rapid gains.
15. Bonds remain a relatively attractive asset.
Green, in December 2022, you wrote an important memo titled 'Sea Change,' in which you mentioned that an era has ended — we can no longer rely on continuously declining interest rates for returns, a trend that had persisted for over 40 years since 1980.
You also noted that today’s investors can achieve decent returns from credit assets, meaning they no longer need to overly depend on higher-risk assets to meet their overall return objectives.
Could you explain what might be a good way for ordinary investors to participate in markets such as high-yield bonds?
If we aim to achieve equity-like returns in an environment with uncertain prospects, what are some pragmatic and intelligent approaches?
Marks, for example, high-yield bonds fall under what I categorize as 'lending-type assets.'
In the market, these assets are referred to as debt, fixed income, bonds, notes, loans... Essentially, they all mean the same thing.
You lend out your money, and the borrower “rents” your funds, paying you interest every six months and repaying the principal at maturity.
Based on this information, you can calculate a fixed rate of return. As long as today’s interest rate is known and future principal and interest payments are guaranteed, you can determine the yield.
Why are these types of assets called fixed income?
Because it represents a contractual relationship where the return is pre-agreed. As long as there is no default, you know exactly how much you will get back.
Thus, once you purchase such an investment, the only uncertainty lies in whether the other party will honor their commitment and make timely interest and principal payments.
This is where credit analysts come in; their job is to assess the probability of default. This is a specialized field. You shouldn’t buy a company’s bonds just because you like its products.
Many people buy stocks because they like the company, its brand, or its founder (I don’t recommend this approach, but it happens frequently).
But credit investment doesn’t follow that logic. You can’t say, 'They make delicious burgers, so I’ll buy their bonds.' That’s not professional. It’s an entirely different game.
Therefore, I usually suggest that, for most people, rather than taking direct risks, it’s better to choose professionally managed products like mutual funds, ETFs, etc.
As Charlie Munger once said, 'Investing isn’t easy. Anyone who thinks it is, is a fool.' This statement applies not only to what I do, but also to stocks, mutual funds, ETFs, index funds, and various other areas.
One interesting aspect of investing is that achieving the market's average return is relatively easy, but obtaining excess returns is extremely difficult.
However, if you are satisfied with average returns, this can be achieved through products with relatively low management costs, and there is a high probability of success.
Take high-yield bonds as an example. They currently offer yields of around 7%, while other credit products might provide slightly higher returns. If you can accept this range of returns, there are already many funds available in the market that can help you achieve this.
16. "Emotional stability" is one of the most critical qualities of many outstanding investors.
Green: Let’s return to the topic of “how to deal with risk and uncertainty.” You often quote Elroy Dimson’s classic statement: “Risk means that many things can happen, but only one will occur.”
I feel that the world today appears more uncertain than at any other time in our lives. How do you view this uncertainty? Not just from an investor’s perspective, but also as a father and grandfather. When you talk to your children or grandchildren about the future, what do you think?
You also frequently mention Peter Bernstein’s line that I particularly like: “We walk into the great unknown every day.” So, how should we coexist with this “great unknown”?
Marks: Only in the past few months have I truly realized that the hardest questions to answer often begin with “how.”
I can tell you that we need to control our emotions and stay calm; I could also say that if you want to be more conservative, you must make your portfolio more robust.
But how to achieve these things is the real challenge.
If you let emotions drive your investment decisions, the outcome is often counterproductive.
When the market is booming and everyone is enthusiastic, you might be tempted to buy, but it’s usually too late; when the market is sluggish and full of pessimism, you might choose to sell, which is typically at the lowest point. This is precisely a path destined for failure.
Therefore, 'emotional stability' is one of the most critical qualities I’ve observed in many excellent investors.
This essentially means: don’t operate too frequently, and don’t always think about 'needing to do something.' Often, the best action is to remain inactive.
The essence of investing isn’t about relying on luck or gambling; its long-term effectiveness stems from economic growth and companies generating profits.
What we can do is board this train of growth and stay on it — the earlier you get on, the more you invest, and the longer you persist, the better the results. This matters more than whether you successfully time the market, pick the right stocks, or catch the rhythm.
Green, you once told me a viewpoint that left a deep impression on me: don’t push everything to the limit.
In your 2015 memo 'Rethinking Risk,' you also mentioned agreeing with a humorous yet profound statement by Einstein: 'I never think about the future—it will come soon enough.'
Were you serious when you said that, or was it somewhat of a joke? Did it really help you better face uncertainty?
Marks: I am indeed not a futurist. I have never felt that I understand the future better than others, nor do I spend much time predicting it.
I focus more on the present: which assets are worth buying right now? Where is the market positioned at this moment?
Of course, you might ask, 'How do you know these things will perform well in the future?' Indeed, investing ultimately comes down to making judgments about the future. But that doesn’t mean you can outperform the market by forecasting.
As you just mentioned with Dimson’s phrase, the future isn’t a straight line that clever people can predict accurately; it’s a probability distribution.
Every major event—whether it’s GDP growth, inflation, the next president, geopolitical conflicts, or financial risks—has multiple possible outcomes.
Only one of these outcomes will ultimately occur, but you shouldn’t place all your bets on any single result unless you have exceptionally unique expertise in that area, which is exceedingly rare.
Therefore, humility is truly the talisman in investing.
I once wrote in a memo my favorite saying from a fortune cookie, which you might remember: 'The cautious rarely make mistakes, but they also don’t write great poetry.'
You must strike a balance between the two: Do you want to chase poetic and magnificent returns, accepting the risk of failure? Or do you prioritize avoiding mistakes, settling for modest results while ensuring you stay in the game for the long term?
You can’t have it both ways.
Of course, we all hope to avoid significant risks while achieving favorable outcomes, but the real world doesn’t work that way.
You must ask yourself: What is the bottom line you truly want to uphold? On which side are you willing to bear uncertainty?
The only success in life is being able to live according to your own way.
Green The final question. When I listened to your conversation with Bruce Karsh and Sheldon Stone, the two co-founders of Oaktree Capital, a few days ago, I was particularly moved by one thing.
Sheldon mentioned that when he first met you in 1983 and started working with you on high-yield bonds, you were already emphasizing the importance of maintaining a work-life balance and setting aside time to enjoy personal life.
Bruce also noted that the “importance of family” is a consensus among the founders of Oaktree.
When reviewing your past, I noticed that you have always managed to set aside significant time for playing tennis, backgammon, card games with your friend Bruce Newberg, buying and renovating houses, and spending time with your children and grandchildren… You even mentioned that over the past 40 years, you and Bruce have accumulated thousands of hours playing chess and cards together.
What advice would you give to those investors and professionals who must work extremely hard to succeed in competitive environments, so they can strike a balance between their careers and personal lives?
Marks Each of us must figure out what is most important to us.
Charlie Munger often says, “This person is crazy.” – By “crazy,” he means those who only know how to work tirelessly and care only about making money.
You need to ask yourself: Is that really the life you want? For me, it’s not.
There is a very common but true saying: 'No one on their deathbed ever said, I wish I had worked more overtime.' I think that's right. That's not how I want to live my life.
As you said, I have many hobbies that I love and don't want to give up. When you already have 'enough money' or 'more money,' why sacrifice happiness for more?
One of my favorite quotes comes from writer Christopher Morley: 'The only real success in life is being able to live your life the way you want.'
Of course, the hard part is, you first need to know what truly constitutes 'your own way.'
You're 22 years old, just starting out in your career. You need to think about this: What will truly make me feel fulfilled when I'm 70, looking back 40 years from now?
This isn't easy. We change, and we may not fully understand ourselves.
If you had asked me 40 years ago to describe what kind of person 'Howard Marks' would become, I certainly wouldn’t have described who I am today.
Perhaps I misunderstood myself back then, or perhaps I've changed. Either way, the direction we should strive for is being able to say sincerely at the end: I am satisfied with the choices I made in my life.
And this should be a conscious decision.
Not because everyone else is doing it, not because of media hype, not because you want to emulate someone, or dream of becoming the richest person in the world—unless that is genuinely the life you desire deep down.
For me, the lifestyle of 'just striving to make money' is not suitable for most people. Therefore, I have always believed that one should live life in their own way, find the path that truly suits them, and then walk it with determination.
Green, when I look back at your career and life, I find that you have indeed achieved this. You have arranged your life just right.
You are passionate about writing, so you focus on writing memos; you don’t pick stocks yourself, nor do you directly manage a team; instead, you spend your time setting investment philosophies and communicating with clients—things you are truly good at and passionate about.
I think this is a very touching example of aligning knowledge with action. You have found your rhythm in life and work in the way that suits you best. This is a model that each of us can learn from.
Marks, my idol Buffett often says that he dances his way to work every morning. I indeed share that feeling.
I am very happy to go to work, and I love what I am doing. Moreover, I hope I can continue doing this for a long, long time.
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