AI-Generated Content — This profile was created using AI and publicly available sources. While we strive for accuracy, details may contain errors or be outdated. Quotes may be paraphrased or taken out of context. Achievements and figures are based on public reporting and may not be precise. This profile does not imply endorsement by the individual featured. Not financial advice.
The Thesis
Marks deployed Oaktree's largest-ever distressed debt fund at the depths of the financial crisis, buying high-quality bonds at 50-60 cents on the dollar when forced selling created extraordinary bargains.
The Story
Howard Marks, the legendary distressed debt investor and author of the widely-read memo series, built Oaktree Capital into the world's premier distressed debt firm. His preparation paid off spectacularly during the 2008-2009 financial crisis. In the months surrounding the Lehman Brothers collapse, Oaktree raised and deployed its largest distressed fund ever, buying bonds from panicked sellers at deep discounts. Investment-grade bonds were trading at 60-70 cents, high-yield at 40-50 cents, and some securities at even steeper discounts.
Marks had been warning about excessive risk-taking in his memos for years before the crisis, and when the crash came, he pivoted immediately to aggressive buying. His famous September 2008 memo, published just days after Lehman fell, was titled "Nobody Knows" — acknowledging the uncertainty while arguing that prices had overshot to the downside. The distressed investments generated extraordinary returns as credit markets normalized over the following years. Marks proved that the discipline to prepare during good times and act decisively during bad times is the core of successful investing.
Key Insight
Prepare during good times, act during bad times — and keep writing down your thoughts so your framework is ready when the moment arrives.
“The biggest investing errors come not from factors that are informational or analytical, but from those that are psychological.”
Howard Marks
Enjoyed this? Get more like it.
Glen's Musings — AI, investing, and building things. Occasional. Free.
Explore More
See how Glen Bradford applies these principles to his own investing. Long Fannie Mae & Freddie Mac junior preferred — conviction meets patience.