The Memo by Howard Marks

Howard Marks, Oaktree Co-Chairman, and Armen Panossian, Head of Performing Credit, explore the potential sea change reshaping investments, discussing tail risks, borrowing costs, credit analysis, surprises in the economy, and the shift to a full return world.

The podcast discusses the sweeping alteration of the investment environment and the need for significant capital reallocation. It explores the potential consequences of low interest rates, rising inflation, and the challenges in finding bargains in the current market. The chapter highlights the potential for higher returns in high yield bonds and credit investments. They discuss the uncertain transition in interest rates and the role of optimism in investing. The podcast advocates for increased investment in credit due to competitive returns and lower uncertainty.

Wayne Dahl, Robert O’Leary, and Mark Jacobs discuss topics from Oaktree's Quarterly Letters, including navigating the interest rate environment, attractive sectors for credit investors, misconceptions about the real estate market, and more.

In this podcast, Howard Marks talks about the importance of avoiding losers and holding a diversified portfolio. He discusses the concept of risk in investing and emphasizes the need to bear risk intelligently. He uses tennis as an analogy to discuss the concept of balancing offense and defense in investing. He explores a graph that helps explain the relationship between risk and returns and emphasizes the importance of making informed choices. Lastly, he discusses the impact of alpha on investment outcomes and whether investors should focus on fewer losers or more winners.

Howard Marks discusses the choice between more winners or fewer losers in investing. He explores risk control in bond investing and the analogy between tennis and investing. The impact of style and execution on outcomes is examined, along with the challenges of keeping up with equity indices. The relationship between risk and returns, the efficient market hypothesis, and psychological factors in investor behavior are also discussed.

Armen Panossian, Madelaine Jones, and Nael Khatoun discuss the current state of European credit, challenges created by the end of the easy money era, risks from geopolitics and AI, and the quality advantage in European markets. They also explore the shift from bank dominance to private credit, macro themes in European and US markets, jurisdictional differences in European investing, labor shortage concerns, and navigating uncertainty in the market.

Armen Panossian (Head of Performing Credit), Danielle Poli (Assistant Portfolio Manager, Global Credit), and Megan Messina (Head of CLO Capital Markets) discuss topics from the 2Q2023 Performing Credit Quarterly.  They consider the current tug-of war between fiscal and monetary policy, opportunities in credit, and what many investors are getting wrong about today’s CLO market.

In his latest memo, Howard Marks discusses five market calls he’s made during his career. He argues that investors seeking to take the temperature of the market should focus on understanding prevailing market psychology and the nature of cycles. Just as importantly, they should learn to control their own emotions and have the humility to know when not to make a call.The memo is read by LJ Ganser.You can read the memo here (https://www.oaktreecapital.com/docs/default-source/memos/taking-the-temperature.pdf?sfvrsn=93bb5366_6).

David Rosenberg, co-portfolio manager of Oaktree’s U.S. and Global High Yield strategies, and Howard Marks discuss topics from the June 2023 edition of The Roundup. They consider the evolution of the high yield bond market, investor optimism and why this time might actually be different in financial markets.

Oaktree Investment Risk Officer Wayne Dahl explains why economic statistics can tell conflicting stories and what this means for credit investors trying to make sense of today’s noisy data.