Thursday, February 17, 2011

Exclusive Notes from Howard Marks Presentation


One of the perks of being in school again is that I get access to a number of great investors who take time out of their busy schedules to speak to the UCLA Anderson Student Investment Fund. As a group, we are very fortunate that our advisor has a relationship with the President of Oaktree Capital, Howard Marks. Mr. Marks was gracious enough to spend close to 90 minutes with me and my classmates this past Monday.

I first became aware of Oaktree in March of 2008 when a copy of the latest memo from Howard Marks came across my desk. The memo was entitled "The Tide Goes Out" and after reading it I decided to email the contact person listed on the Oaktree website, begging her to allow the investment community to have access to all of previous memos. While she was reluctant at first, all of them are now available.

At the time, I was living in New York and was working for an equity-focused hedge fund. Consequently, I had no idea how prominent a firm Oaktree was in the fixed income world. However, since moving out to LA and meeting investors who live and work in the area, I have learned just how well-respected Oaktree is. Not surprisingly, I have read every memo released since March of 2008.

Further, my first opportunity to hear Mr. Marks speak was at a Wharton Hedge Fund event in New York. I have been lucky enough in my young career to have met and listened to a good number of very savvy investors discuss their investment philosophies. However, to this day one particular comment from Mr. Marks has stuck with me. He said that his main job is to manage risk and to protect capital. As a value investor, that mandate really resonated with me. I think it fits in perfectly with the margin of safety concept that I try to incorporate in all of my stock analysis.

Fortunately, Mr. Marks' wisdom will soon be available for all of us to consume. He has written a book called The Most Important Thing that can be pre-ordered on Amazon now and will be available on May 1st. I have already put it on my Amazon wish list and humbly suggest that you do as well. However, if you cannot wait that long, check out this interview on the Financial Times' website with Howard Marks (Update: link is fixed) from last November.

Finally, Mr. Marks has graciously allowed me to post the notes from the event last Monday. Given the length (no, the notes are not quite as long as those from the Berkshire Annual Meeting), I have put the notes into a Scribd format. The settings should allow you to download a PDF copy. But, if you have any trouble, feel free to email me and I will send you a copy.

I have to say that even after following Mr. Marks for the last few years, in person, his temperament and the way he articulates his investment philosophy far exceeded my expectations. I hope you enjoy the notes.



(Picture of Howard Marks was taken from his bio page on Oaktree's website)

Howard Marks Presentation to UCLA Student Investment Fund