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AcquiredAugust 30, 2022
Howard Marks & Andrew Marks: Something of Value
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We sit down with legendary investor Howard Marks of Oaktree Capital and his son Andrew who, while less-well-known, is also an incredibly accomplished investor in a very different arena: early-stage VC. The purpose of the conversation was to discuss their joint work together on Howard’s all-time most popular memo, “Something of Value”, which made the then-shocking argument that Value and Growth investing are not diametric opposites but rather two sides of the same investing coin. We of course dive deep into that, and also cover plenty of fun Oaktree and investing history, as well as Andrew’s favorite topic: selling (or not selling, as the case may be). This is not one to miss!
9 book mentions in this episode.
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Books Mentioned
“The speaker mentions internalizing principles from reading the Buffett letters, indicating their influence on investment philosophy.”
Sentiment: Deep Dive
Trigger: investment philosophy evolution
For: Aspiring investors and finance enthusiasts
Key quote: “I got fortunately into the Buffett letters really young.”
The host mentioned the 'Buffett letters' as a significant influence on the guest's early investment education. This reference highlights the transition from value investing to understanding growth investing principles, showcasing the evolution of investment strategies over time.
ASIN: B00DUM1W3E
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“There's a famous book called Hickman, which talks about bond experience from 1900 to 19, I think, 43. Supposedly, Mike found that book and he read in it that the lower a bond's rating was, the higher its actual rate of return was.”
Sentiment: Deep Dive
Trigger: bond investment strategies
For: Investors interested in bond markets and financial history
Key quote: “And there's a famous book called Hickman, which talks about bond experience from 1900 to 19, I think, 43.”
The host mentions the book 'Hickman' to illustrate the historical perspective on bond ratings and their returns. This reference highlights the importance of understanding the risks and rewards associated with lower-rated bonds, which can lead to significant investment opportunities.
ASIN: B0FK22SXWH
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increasing returns in the new world of business
Brian Arthur
“One of my favorite writings on investing, it's not actually about investing, but it's this guy, Brian Arthur, and he wrote something called increasing returns in the new world of business.”
Sentiment: Deep Dive
Trigger: technological adoption and business
For: Business leaders and investors
Key quote: “One of my favorite writings on investing, it's not actually about investing, but it's this guy, Brian Arthur, and he wrote something called increasing returns in the new world of business.”
The host mentions Brian Arthur's book to illustrate how technological advancements, particularly the Internet, have transformed business dynamics. He emphasizes that companies can achieve increasing returns and dominate markets more than ever before due to these changes.
ASIN: 0472094963
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All the Pretty Horses
Cormac McCarthy
“Brian Arthur was friends with Cormac McCarthy, the author who wrote All the Pretty Horses and No Country for Old Men. Cormac helped shape the prose in that piece.”
Sentiment: Passing Reference
Trigger: Cormac McCarthy's influence
For: Readers interested in the intersection of literature and economics.
Key quote: “Brian Arthur was friends with Cormac McCarthy, the author who wrote All the Pretty Horses and No Country for Old Men.”
The host mentions Cormac McCarthy in relation to Brian Arthur's writing on business and economics. McCarthy's influence is noted as a contributing factor to the clarity and success of Arthur's work.
ASIN: 9123978643
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No Country for Old Men
Cormac McCarthy
“Brian Arthur was friends with Cormac McCarthy, the author who wrote All the Pretty Horses and No Country for Old Men. Cormac helped shape the prose in that piece.”
Sentiment: Passing Reference
Trigger: impact of market changes
For: Readers interested in economics and business literature
Key quote: “Brian Arthur was friends with Cormac McCarthy, the author who wrote All the Pretty Horses and No Country for Old Men.”
The host mentions Cormac McCarthy in relation to Brian Arthur's influential writing on business and economics. This connection highlights the literary quality of Arthur's work, suggesting that good writing can enhance complex ideas.
ASIN: 1529064430
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“The speaker references their notes from business school, highlighting a key concept about risk and capital loss from the book.”
Sentiment: Deep Dive
Trigger: venture capital investing
For: Investors interested in venture capital and risk management
Key quote: “I went back through my notes from business school from Howard, your book, The Most Important Thing Eliminated.”
The host mentions 'The Most Important Thing Eliminated' to emphasize the importance of avoiding permanent capital loss in investment strategies. They reflect on how their skills align more with venture capital, which involves higher risks and potential rewards compared to traditional investing.
ASIN: B0G2B1XL4S
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“The speaker mentions that the book evolved from a memo of the same title and discusses its content related to running a company and shared values among partners.”
Sentiment: Deep Dive
Trigger: investing and market changes
For: investors and financial analysts
Key quote: “If you would have told me when I was reading the paper, and this was the most important thing in America, well, newspaper values are mostly going to go to zero because all of the consumer attention is going to be shifting to consuming everything on their computers in an interconnected web of servers that doesn't really exist yet.”
The host discusses the evolving nature of consumer behavior and its impact on traditional businesses, particularly newspapers. They reference 'The Most Important Thing' to emphasize the need for investors to understand future cash flows and the potential for disruption in established industries.
ASIN: B0G2B1XL4S
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“A friend of mine wrote a book on investing in the UK, and the title is Simple But Not Easy.”
Sentiment: Deep Dive
Trigger: investing and judgment
For: Aspiring investors and finance professionals
Key quote: “A friend of mine wrote a book on investing in the UK, and the title is Simple But Not Easy.”
The host mentions 'Simple But Not Easy' to emphasize that while the principles of investing can be straightforward, executing them effectively is challenging. This highlights the importance of judgment and qualitative assessments in successful investing.
ASIN: 0985559608
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“In CS, there was a book called Programming Interviews Exposed, written by three ex-Microsoft guys.”
Sentiment: Passing Reference
Trigger: hiring and evaluation process
For: Job seekers in computer science
Key quote: “In CS, there was a book called Programming Interviews Exposed, written by three ex-Microsoft guys.”
The host mentions 'Programming Interviews Exposed' as a resource that can help candidates prepare for technical interviews in computer science. However, they emphasize that true evaluation goes beyond memorization and requires understanding a candidate's experiences and decision-making processes.
ASIN: 0471383562
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