The Memo by Howard Marks Behind the Memo: The Indispensability of Risk with Howard Marks, Bruce Karsh, and Maurice Ashley
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Jul 23, 2024 
Oaktree cofounder Bruce Karsh and chess Grandmaster Maurice Ashley join Howard Marks in a discussion about risk and decision-making, drawing parallels between chess and investing. They explore the importance of taking risks, making sacrifices, embracing uncertainty, and learning from failures on the journey to success.
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A Mother's Sacrifice
- Howard Marks relates Maurice Ashley's story of his mother's sacrifice, leaving her children in Jamaica for a better life in the U.S.
- This resonated with the concept of risk-taking in investing, where present sacrifice can lead to future, uncertain rewards.
Risk of Playing it Safe
- In both chess and investing, not taking enough risk can be the biggest risk of all.
- Incremental gains are easily countered by skilled opponents, so bold, surprising moves create winning opportunities.
Two Paths to Winning
- Investing in well-known, loved companies offers modest, reliable returns but limits potential gains.
- Targeting complex, undervalued assets holds greater uncertainty but also the possibility of significant returns if assessed correctly.