By playing, you agree to uListen's Terms and Privacy Policy and YouTube's Terms of Service.

My First Million

I'm 80 and I wasted 25 years of my life. Don't make my mistake. - Howard Marks

Episode 841: Sam Parr and Shaan Puri talk to legendary investor Howard Marks about AI and making decisions in the face of fear and uncertainty.

Howard MarksguestShaan PurihostSam Parrhost

Jul 15, 202644mWatch on YouTube

Summaries, chapters, transcripts, and FAQs on this page are made by uListen, not YouTube.

CHAPTERS

Jump to publisher timestamps

Chapter summaries

Why Marks updated his view on AI: autonomy, unpredictability, and “nagging concern”
Howard Marks explains why he rewrote his AI memo after his son pushed him to update it based on how fast the field was changing. He describes what he finds unprecedented about AI—especially autonomy and how difficult it is to predict where it goes next.
- •He rewrote his earlier AI memo after his son Andrew, who works in venture capital, told him “so much has happened.”
- •He says AI impressed him with context, humor, and tailoring information to the user.
- •He highlights AI’s autonomy as something unlike prior technologies that were primarily tools.
- •He emphasizes AI’s unpredictability and his sense that the future “shape” is hard to forecast.
- •He notes the autonomy comes with a concern that AI could “take over.”
Can AI replace top investors? Where human judgment might still matter
The hosts ask whether AI will be able to do what Marks does as an investor. Marks argues AI will expose people whose claimed skill is overstated, but he believes experienced judgment may retain an edge in certain situations.
- •He compares AI’s potential disruption to how indexation displaced many active equity investors.
- •He suggests AI will “defrock” another group of professionals whose abilities are exaggerated.
- •He contrasts older computers’ narrow but reliable capabilities with AI’s potentially broader scope.
- •He gives an example of avoiding “bad people” based on an intuitive feeling that may be hard to replicate in AI.
- •He argues there will always be situations with no historical precedent to train on, requiring probabilistic judgment.
Second-level thinking and the limits of teaching “insight”
Marks introduces his core concept of second-level thinking: to outperform, you must see something differently from the consensus and be correct. He explains why he thinks this is hard to teach and ties it to open questions about whether AI can truly match human insight.
- •He defines second-level thinking as needing a “variant perception” versus the investing consensus.
- •He says outperformance requires betting on that variant perception and being right.
- •He states he can teach the importance of second-level thinking but not how to reliably generate correct variant perceptions.
- •He compares this to “you can’t coach height,” implying insight may be innate.
- •He connects the question to whether artificial general intelligence can do everything a human can do.
Investing through “end of the world” fear: deploying capital after Lehman
Marks recounts the uncertainty around investing during the 2008 crisis and why conviction still included doubt. He explains the logic that led Oaktree to invest despite existential fears about the financial system.
- •He describes raising a large distressed-debt fund before the crisis because they anticipated distress.
- •After Lehman failed, they faced the decision to invest amid talk of “the end of the world.”
- •He notes there was no data or prior experience for an “end of the world” scenario—only supposition.
- •He shares their reasoning: if the world melts down, investing won’t matter; if it doesn’t and they don’t invest, they failed their job.
- •He emphasizes they were not fully confident and believes acting without trepidation can be a red flag.
How Oaktree raised $11B: credibility, crisis-fit strategy, and “build the ark before the flood”
Pressed on how raising $11 billion happens, Marks lays out the components: relationships, track record through prior crises, and making the case that the market was failing its disciplining role. He also explains why fundraising must happen before panic peaks.
- •He cites long-standing relationships and strong results over decades as a base of trust.
- •He says distressed strategies can serve as a hedge because they can do well when crisis hits.
- •He argues they pointed to “dumb ideas” being financed when markets fail to act as disciplinarians.
- •He credits respect for Bruce Karsh as part of investor confidence.
- •He stresses you can’t raise money during the crisis; he quotes the idea of building the ark before the flood.
Investing with fear: courage, trepidation, and not waiting for certainty
Marks explains that fear doesn’t disappear in crises, even for experienced investors; the goal is acting despite it. He argues waiting until fear is gone usually means missing the best opportunities.
- •He describes how crises make terrible news feel terrible even to professionals reading the same headlines.
- •He says probabilistic thinkers who admit uncertainty can’t act without trepidation.
- •He recounts telling a fearful colleague during the 1998 turmoil to go back and do the job.
- •He uses the idea that a “battle hero” is afraid but acts anyway.
- •He states that if you wait until you have nothing to be afraid about, the opportunity has likely passed.
What makes a long partnership work: shared values, complementary skills, appreciation
Marks discusses his decades-long partnership with Bruce Karsh and what made it durable. He emphasizes mutual respect, alignment on values, division of responsibilities, and gratitude for what the other person contributes.
- •He says the bedrock is mutual respect and notes they’ve had disagreements but never a fight.
- •He argues many partnership blowups come from mismatched values (ethics, risk tolerance, aggressiveness).
- •He gives examples of “cowboys” versus “chickens” dynamics tearing firms apart in good and bad times.
- •He says partnerships work when skills are complementary and each does what the other can’t or doesn’t want to do.
- •He adds appreciation is essential—thanking your “lucky stars” for a partner who takes on tasks you avoid.
Parenting choices and support: letting kids decide and learn from mistakes
Asked about raising children he enjoys being around, Marks focuses on consistent support and avoiding ego-driven superiority. He explains why letting kids make choices—even imperfect ones—helps them grow.
- •He references an idea that men’s problems can be inversely related to support from their fathers.
- •He says he never wanted to be the father who asserts superiority over his children.
- •He describes allowing his son to be “smarter” in some areas and supporting what his kids want to do if it’s not injurious.
- •He shares an example of letting his daughter choose between two good school options rather than imposing the parents’ preference.
- •He emphasizes the value of kids learning decision-making, including learning from incorrect choices.
Living your life your way: intention, self-knowledge, and choosing for happiness
Marks admits he drifted through early life without intentional decision-making and calls that a mistake. He shares the quote he considers central: success is living life your own way, and explains what it means in practice.
- •He says he made early decisions haphazardly and feels embarrassed by the lack of intention.
- •He quotes Christopher Morley: “There is only one success: to live your life your own way.”
- •He tells students to find work that plays to strengths, avoids weaknesses, and makes them happy.
- •He warns against letting friends, society, or parents decide your path.
- •He notes it’s difficult because people change over time, making self-knowledge and long-term fit hard.
Luck, timing, and humility: “I could be wrong” as a risk lens
Marks details how chance shaped his career path and connects that to humility and probabilistic thinking. He argues overconfidence is what creates blowups, and that acknowledging uncertainty is protective.
- •He describes career turns as driven by circumstance (a good summer job, being told to move roles, moving for lifestyle).
- •He recounts being asked to figure out “high-yield bonds” after a call about “a guy named Milken or something,” framing it as luck and timing.
- •He agrees it’s important to see the other side of an investment and recognize what could go wrong.
- •He quotes Mark Twain about what you “know for certain” that isn’t true causing trouble.
- •He contrasts safe phrases (“I could be wrong”) with dangerous certainty (“I’m 100% convinced”).
Lunch with Buffett: how they met and why Marks wrote his first book
Marks shares the origin story of his relationship with Warren Buffett, beginning with the Enron-related Osprey situation. He explains how Buffett’s encouragement and promise of a blurb accelerated Marks’ decision to write a book.
- •He says Oaktree became the largest holder of debt in an Enron-related entity called Osprey, with Buffett as the second-largest holder.
- •He recounts Buffett giving them his proxy and letting them run the position, which Bruce restructured successfully.
- •He describes receiving an invitation to lunch in Omaha after the successful outcome.
- •He says they didn’t do further business together because Buffett sought large acquisitions unlike what they focused on.
- •He reveals Buffett suggested he write a book and offered a blurb, prompting Marks to write The Most Important Thing.
What people miss about Buffett: the Buffett–Charlie bond and how Charlie changed the style
Asked what lore gets wrong, Marks says the public largely sees Buffett accurately, but may not grasp the depth of Buffett’s love for Charlie. He also explains Charlie’s influence in steering Buffett away from “cigar butt” bargains toward higher-quality businesses.
- •He says the main underappreciated aspect is the depth of Buffett’s love for Charlie.
- •He describes Charlie as a sounding board and logic checker for Buffett.
- •He explains “cigar butt investing” as buying very cheap, unattractive situations for a few “free puffs.”
- •He credits Charlie with shifting Buffett toward buying “great companies at a good price” instead of “any company at a great price.”
- •He notes Charlie often focused on ideas more than investments in conversation, and their relationship included humor.
Recommended reading: euphoria, cycles, and randomness
To close, Marks recommends two books that shaped his thinking about cycles and the role of chance. He explains what each taught him and why it matters for evaluating risk and track records.
- •He recommends A Short History of Financial Euphoria by John Kenneth Galbraith as influential on booms, busts, and mental weaknesses behind them.
- •He connects the Galbraith book to taking an objective view of cycles.
- •He recommends Fooled by Randomness by Nassim Nicholas Taleb to understand how randomness affects outcomes.
- •He says randomness impacts attitudes toward risk, portfolio construction, and interpreting published performance records.
- •He mentions people can read related memos as a shorter version of the Taleb ideas.

Publisher timestamps

Get more out of YouTube videos.

Read along on your phone, search it beside the video, or ask your favorite AI app what was said.