My First Million – “79 Years of Investing Wisdom in 55 Minutes”

Date: August 22, 2025
Hosts: Sam Parr & Shaan Puri (with Howard Marks, co-founder of Oaktree Capital)

Episode Overview

In this episode, legendary investor Howard Marks joins MFM to openly discuss the core principles that have shaped his investing career across nearly eight decades—from historic market bubbles to crisis investing and behavioral finance. Sam and Shaan probe Howard on his trademark contrarian wisdom, how he managed risk, the human psychology at the heart of market cycles, and actionable advice for non-professional investors. Marks generously unpacks his approach to reading the market, managing emotion, and why “fewer losers” outperforms “more winners” across a lifetime.

Key Discussion Points & Insights

1. The Basics: Zigging When Others Zag

• Howard Marks’ reputation: Legendary for contrarian thinking, sharp memos, risk awareness.

  “He made billions zigging when others zag, especially in crises.” (A, 00:00)

• Discussion of Sam’s “vanilla” index fund approach vs. Shaan’s riskier style (00:32–01:32).
  • Sam: Holds mostly S&P 500 index funds and trusts the 10% long-term average.
  • Shaan: Pushes for alternate asset classes; skeptical of averages feeling “too certain”.

2. Is the S&P 500 Really Safe in the Long Run?

• Howard’s nuanced take:

  • It’s logical to keep your money safe if you have a surplus (“First purpose of your money should be to make you comfortable.”) (B, 01:56)
  • But the belief that there is “no risk” is dangerously risky.
  • “The risk in the markets does not come from the companies ... The risk in the markets comes from behavior of people.” (B, 02:38)
  • Cautions about current high PE ratios on the S&P: historically, buying at a PE of 23 translates to 10-year returns between +2% and -2%. (B, 04:50–06:12)

• Memorable quote:

  “The riskiest thing in the world is the belief that there’s no risk.” (B, 02:38)

3. Diversification, Rebalancing & The Role of Bonds

• Investing is not all-or-nothing. Consider risk “speedometer” between aggressive-defensive (B, 10:30).
• For non-professionals: Rebalancing into bonds, especially high-yield, is a viable option.

  “When you buy a bond, there’s a contract... and they almost always pay.” (B, 08:07)

  • High-yield bonds currently yield 7–8%, which is competitive after taxes.
  • Most successful portfolios are about mix, not total conviction in one asset class.

4. Understanding Market Cycles & Behavioral Patterns

• Marks’ rule: Don’t try to forecast markets; focus on understanding where we are in the cycle.

  “We never know where we’re going, but we sure as hell ought to know where we are.” (B, 13:23)

  • Story from 2000 – ‘Bubble.com’ memo, identifying parallels between tech bubble and past bubbles (South Sea, etc.)

• Memorable moment:

  “History does not repeat, but it does rhyme.” — Mark Twain (quoted by B, 16:03)

  • Human behavior, not numbers, drives cycles.

• Emphasizes observing the present, not predicting the future:

  “If you succumb to human nature, it tends to get you to do the wrong thing at the wrong time.” (B, 20:51)

5. Contrarian Investing: Doing the Hard Thing

• It’s emotionally challenging to buy when everyone else is afraid.

  “When the time comes to buy, you won’t want to.” (B, 20:51)

• Buying low feels wrong because the environment is bleak (bad news, pessimism), but that’s precisely when opportunities exist.

6. Handling Emotions, and Investment Temperament

• Howard’s natural unemotional nature helped him; acknowledges it’s hard for most (“I was born unemotional… for me, it came naturally.”) (B, 27:03)
• Biggest personal mistake: being too conservative from Depression-era upbringing.

  “If I wasn’t as conservative, I’d be richer today. I’m not sure I’d be happier…” (B, 27:53)

• Even so, taking calculated risks at critical moments (e.g. ‘07–’08 crisis) paid off handsomely.

7. Case Studies: Market Inflection Points

• Tech bubble (‘99/2000): Recognized the exuberance from historical patterns and avoided the FOMO.

• Global Financial Crisis (‘07–’09):

  • Raised and invested massive distressed funds early (not after the crisis hit).
  • Logic: “If we invest it and the world melts down, it doesn’t matter what we did. But if I don’t invest it and the world doesn’t melt down, then we didn’t do our job.” (B, 33:04–34:44)

• Notable quote:

  “You make the big money catching falling knives carefully.” (B, 33:01)

8. Investment Philosophy: “Fewer Losers, Not More Winners”

• Consistent, above-average performance (never top, never bottom) trumps heroic big swings.
  • “If you can do well 14 years in a row … you can pop up to the top.” (B, 39:37)
  • Oaktree’s style: Always good, sometimes great, never terrible.

9. On Becoming an “Investment Folk Hero”

• Marks on teaching & writing: Knowledge is freely shared because the “simple” stuff is not “easy.”
  • "We can tell them all day long what you should do, but it’s hard to do. … It’s simple, but not easy." (B, 44:20)
• The new breed of investment “philosophers” have broad cultural influence.

10. How to Assess Markets & Yourself

• Marks' checklist: Do you mistake current trends for a forecast of the future? Do emotions drive your actions?
• Example “Poor Man’s Market Assessment”: Are markets overheated or frigid? Are investing TV shows popular? Do investors get mobbed at parties or shunned? (B, 46:12)

Notable Quotes & Memorable Moments

| Timestamp | Quote | Speaker | |:-----------:|:--------------------------------------------------------------------------------------------------|:-----------| | 02:38 | “The riskiest thing in the world is the belief that there’s no risk.” | Howard | | 13:23 | “We never know where we’re going, but we sure as hell ought to know where we are.” | Howard | | 16:03 | “History does not repeat, but it does rhyme.” — Mark Twain | Howard | | 20:51 | “When the time comes to buy, you won’t want to.” | Howard | | 27:03 | “I was born unemotional ... for me, it came naturally.” | Howard | | 27:53 | “If I wasn’t as conservative, I’d be richer today. I’m not sure I’d be happier…” | Howard | | 33:01 | “You make the big money catching falling knives carefully.” | Howard | | 39:37 | “If you can do well for 14 years in a row ... you can pop up to the top.” | Howard | | 44:20 | “It’s simple, but not easy.” | Howard |

Timestamps for Key Segments

• 00:00–01:32 | Opening context: how Sam and Shaan invest; Howard’s investing intro
• 01:54–06:12 | Is S&P 500 “safe”; dangers of complacency, PE ratios, and true long term
• 07:59–10:30 | Bonds, high yield, and how to rebalance for non-professionals
• 13:23–19:26 | Understanding cycles, ‘bubble.com’, reading history for patterns
• 24:10–27:43 | Managing emotion; why temperament matters more than genius
• 31:20–37:40 | GFC in depth: How Oaktree invested during the 2008–09 meltdown
• 39:31–41:50 | “Fewer losers, not more winners” investing explained
• 46:12–48:04 | Howard’s final checklist: How to assess markets and yourself as an investor

Howard Marks’ Advice for Listeners

Ask yourself:

• Do you (falsely) believe you know the future?
• Are you mistaking current trends for eternal truths?
• Do your emotions drive your investment actions?

“The things we have to do are simple. They’re just not easy to do.” (B, 44:20)

For those who haven’t listened:
This episode delivers a masterclass in practical investing, risk management, and the psychological hurdles that define markets. Howard Marks elevates the conversation from rote financial rules to enduring wisdom that applies as much to life’s decisions as to financial ones. If you want a rare, distilled tour of what lasting investment success looks like—and why it’s so hard—this is a vital listen (or read).