Howard Marks — How to Invest with Clear Thinking | The Tim Ferriss Show (Podcast)

He describes a Japanese philosophical concept he studied—mujō—as impermanence and unpredictability, and says accepting that life will change (and can’t be controlled) is foundational to good investing and good living.

He says you usually can’t know what will trigger a crisis (he notes Oaktree didn’t predict subprime mortgage-backed securities), but you can recognize “dangerous ground” through deteriorating deal quality and overly permissive investor behavior and position accordingly.

He argues the best bargains appear when fear is highest, which is why Oaktree bought heavily after Lehman; waiting until “the dust settles” often means missing the low prices and returning only after prices rise.

He says successful investing requires either being unemotional or acting like it, and that most people struggle to flip from caution at the top to aggressiveness at the bottom; he’s unsure how coachable this is, comparing it to “you can’t coach height.”

He emphasizes assessing “where we are” rather than forecasting “where we’re going,” because cycle position largely determines risk; he describes the three stages of a bull market culminating in widespread belief that things will only get better forever.