์ ์: ๋ฏธ์ ยท ํ๊ตญ์ธ
์์ฝ ๋ณด๊ธฐ
ํ์๋ ๋ง์ค(Oaktree)์ ์์ ์ ํฌ์ ์ฒ ํ์ ๋ค๋ฃฌ ๋ด๋ ์ด์ ํ ๋คํ ์์. 1999๋ ๋ท์ปด ๋ฒ๋ธ ๋น์ ๊ทธ๊ฐ ๊ฒฝ๊ณ ๋ฉ๋ชจ๋ฅผ ๋ณด๋ด ๊ณ ํ๊ฐ๋ฅผ ์ง์ ํ๊ณ ์ดํ ๋ฒ๋ธ ๋ถ๊ดด๊ฐ ํ์คํ๋๋ค๊ณ ์์ . 2022๋ '๊ฑฐ๋ํ ๋ณํ' ๋ฉ๋ชจ์์ 40๋ ๊ฐ์ ์ ๊ธ๋ฆฌ ์๋ ์ข ๋ฃ์ ๊ณ ๊ธ๋ฆฌ ํ๊ฒฝ์ ์์กด ๊ท์น ๋ณํ๋ฅผ ๊ฒฝ๊ณ . ์์์ ๊ฒธ์, ์์กด, ๋ฆฌ์คํฌ ํต์ ๋ฅผ ํต์ฌ ๊ตํ์ผ๋ก ์ ์ํ๋ฉฐ ์์ฅ์ ํ์๊ณผ ๊ณตํฌ์ ์ง์ ์ด๋์ ๋ฐ๋ณตํ๋ค๊ณ ์ค๋ช .
๋ค๋ฌ์ ๊ธ
The nights on Wall Street in the winter of 1999 were brighter than ever. It was a time when stock prices would skyrocket just by adding "God" to a company's name. Everyone was willingly intoxicated by this strange festival. Even startups with no track record have been valued at billions of dollars in .
People called this the new economy . The endlessly soaring green graph seemed to promise an eternal fire. This immense heat soon engulfed even the daily lives of ordinary people . There was an abundance of day traders who quit their decent jobs and jumped into the stock market . It was a true festival where reason was paralyzed.
Even experts were busy justifying this huge bubble . Traditional investment principles were ridiculed as relics of the past, and every morning the newspapers announced the birth of a new billionaire . The endless upward curve reflected in the window was like a religion that would never collapse. Words like the company's actual profit or value were thoroughly obscured behind that dazzling green light.
No one doubted that this splendid feast would come to an end. Amidst the endlessly rising bubble, Wall Street was racing at full speed toward the edge of a cliff. The catastrophe was already starting at our feet . At that very moment when everyone was continuing their race of greed, one investor was calmly facing reality .
It was Howard Marks of Oaktree Capital. He instinctively sensed that this huge illusion was about to collapse and began writing a warning note to send to customers. The memo contained the abnormal prices of tech stocks that were cut off from reason . He silently etched onto the screen the reality where the essential value of the company was ignored .
His resolute diagnosis toward the market's courtesans was clearly engraved on the printed, stiff paper. It was a warning letter containing the cold truth of the investment world that no asset can rise forever. It was by no means an easy task to warn of catastrophe amidst the cheers of the market . He handed over the completed memo and fell into deep anguish.
It required steadfast courage to walk against the crowd. With a short sigh and firmed determination, he placed his hands back on the laptop keyboard. These resolute sentences predicting the collapse of the bubble were soon sent to numerous customers. After finishing the daily transmission, he slowly closed his laptop.
Outside the window, Wall Street was still intoxicated by the festival of courtesans. On that night when everyone believed in eternal ascent, his quiet warning signaling the end of the bubble finally spread out into the world. Marks' warning was very specific. He pointed out the phenomenon where internet companies, unable to drive out even a single ounce of profit, surpass the value of traditional companies that have grown for decades [in music].
He pointed out the deficit financial statements stained red. People were obsessed with illusions like Aclics instead of profit. He asserted that this deformed market, which ignores the basics, is bound to collapse. The scattered financials all pointed to abnormal figures. Marks was convinced that this massive price tag, inflated by blind expectations, would eventually lead to a catastrophic collapse .
He criticized the phenomenon where astronomical amounts of money flow in simply because the name has "dot-com" attached to it . It was a painful warning that this massive, insubstantial bubble was bound to burst in its most terrible form. He directly refuted the market's blind faith that a new era had arrived .
No matter how innovative the technology was, if a company could not generate revenue on its own, it was nothing more than a sandcastle . The countless deficit reports that covered the desk were traces left by mechanical greed. He concluded by saying that this asexual festival would soon present the most wretched bill.
As soon as the third millennium dawned, his chilling prophecy became a cruel reality. During the Wall Street crash, countless monitors turned blood red, signaling the market crash . The tech-heavy Nasdaq index, which had been surging without end, began a literal vertical fall. The companies without substance that Marks had warned against so much were shattered into pieces in just a few days .
Investors who had been cheering for the endless rise fell into extreme panic and dumped their stocks. It didn't take that long for the huge illusion to evaporate into thin air . The monitors in the trading room were completely covered in blood . The stock price, which had been clamoring for innovation, turned into a piece of paper overnight.
The price of the bubble he warned of was horrific. It was only when people rediscovered Marks's notes that they realized his writings were not mere pessimism, but a precise prophecy that accurately [musically] depicted this catastrophic collapse . Markets' investment philosophy shone even more firmly over the stock market that had become a pair.
His tenacity, standing alone in the ground when everyone else had lost their reason and was racing, perfectly protected the assets from a fatal collapse. This amazing insight, which perfectly avoided the disaster of the double bubble, reached beyond Wall Street to the Sage of Omar. Even Wallace Buffett, known as the greatest investor in history, was the first to find and read Marks's memo .
Buffett expressed deep respect, saying that he doesn't just read but always learns something from his writings . With this remarkable achievement, Marks instantly established himself as an irreplaceable legend on Wall Street. The moment Marks' new memo is transmitted, the financial tycoons all come to a halt during their busy schedules .
Sitting in a unique study and deeply savoring his tea has now become the most important daily routine for top investors . Marks' new memo that arrived in the mailbox carried more weight than any thick report on Wall Street . As investors quietly scanned the text on the screen, they were able to reread the context of the massive market .
His notes contained a deep and weighty philosophy on investment that went beyond mere market forecasts . This is precisely why the book's top investors keep his writings close and constantly reflect on their own principles . Now, countless investors on Wall Street quietly wait for his next memo during every moment of crisis when not an inch of pressure is visible.
That profound insight, praised even by the Sage of Omar, has become the most reliable compass for navigating the market to this day. Then how on earth did he manage to maintain his cool reason all alone when he was swept away by greed ? Now, let's trace the origin of that insight that even Lawpit marveled at .
To find that answer, you must pay attention to his unique perspective of looking at people rather than numbers. It saw right through the unstable psychological pendulum of the public hidden behind the flashy economic indicators . It viewed the market not as a mere arrangement of numbers, but as a massive, living mass of emotion .
While others were absorbed in the monitor lights mindlessly rising and falling, he instead turned his gaze toward the outside the window. Looking down at the dark city lights spread out outside the window, he struggled to read the human nature hidden beyond the data. Greed and fear quietly observed the massive psychological waves in the vision .
I quietly realized that even though times have changed and dazzling new technologies are making a fuss as if they will change the world , the human greed surging within it is no different in the slightest from hundreds of years ago . Ultimately, the weighty truth that history repeats itself was the most powerful weapon that sustained him.
When everyone was staggering intoxicated by the cheers, this was the real secret to being able to prepare for the approaching waves all alone . Moving hundreds of billions of dollars in based on this philosophy . Oak Trick Capital was born. And at the very center of it all is co-founder Howard Marks .
Hundreds of billions of dollars in massive capital moves heavily under his position. Even amidst the countless financial firms on Wall Street, Oaktree has firmly established itself as an unshakeable giant. There were no flashy signs or extravagant embellishments. He proved his weighty status solely through cool-headed principles .
In the center of the financial district as dusk falls, the heart of this massive organization is quietly beating . Even as darkness settles between the buildings, Oaktree's headquarters stands imposing like a sturdy fortress . Capital from all over the world crosses this massive threshold and willingly entrusts its fate to his philosophy.
Beyond the lit windows of this colossal fortress, intense deliberation regarding continues, determining the direction of these vast funds. The figure who shouldered the heaviest responsibility at the center of it all was none other than the Oaktree master Howard Marks. Today on Wall Street, his name transcends being merely an investor and is synonymous with a weighty philosophy in itself.
This is precisely why the whole world pays attention to his words during moments of crisis . As you follow his massive footsteps, you will come across a surprising fact. He did not pursue immediate profit. It was a geometric inquiry solely for the purpose of controlling risk . The investment was not a spectacular rush for him .
It was like a quiet yet fierce battle of wits, like a chessboard placed in the darkness, blocking unseen dangers one move ahead . He was more focused on avoiding a fatal defeat than on a spectacular victory. Every time I moved a piece on the chessboard, I thoroughly calculated the worst-case scenario hidden behind it.
He knew better than anyone that a single moment of carelessness could shatter everything. That is why they poured all their wisdom into solid defense to prevent fatal mistakes, rather than flashy offense . While others were distracted by the dazzling profits, he always [watched] the shadow of loss hidden behind them first.
I believed that if you cannot thoroughly control the risks, any profit is nothing more than a sandcastle. In the end, his entire investment life was not a blind pursuit of profit. It was a long and deep process of quest to tame unseen dangers and perfectly control risks. Where exactly did such deep insight and risk philosophy originate?
Let's go way back in time . Howard Marks was born in 1946 in an ordinary middle-class family on a quiet street in Queens, New York . Post-war New York was buzzing with new hope, but the streets of Queens where he grew up were far from the splendor of Manetton . The neighbors led diligent lives, working hard and sweating silently day after day .
It wasn't that grandiose financial knowledge or flashy investment philosophies were exchanged within the household. However, his parents' dedication to music and realistic attitude toward life instilled in young Howard a calm perspective on the world. It was a time when I learned how to calmly face the given reality rather than being given unrealistic dreams.
This solid attitude toward life, acquired in his childhood, later became the that protected him even amidst the temptations of Wall Street . Knowing the weight of the money his parents had earned through hard work, reckless gambling was an option that could not exist for the boy from the start. An attitude of valuing every penny has taken root deep within him.
These hours spent in the humble alleyways of Queens became the solid foundation for him to navigate Wall Street. The master's philosophy of substance over splendor began right here in this small town. His parents were not glamorous financial professionals . However, he silently passed down the value of honest labor and unwavering diligence to his son .
Every evening, practical wisdom for approaching life naturally comes to the simple dining table. My father used to meticulously calculate living expenses on an old ledger. Prudence in preparing for the future, rather than extravagant spending, was a strict rule of the household. Young Howard was unconsciously learning [through music] how to conserve and allocate limited resources on his shoulders .
My mother also never threw things away easily. The old, neat tableware placed on the simple table instilled in him a firm value system that prioritized practicality over roughness. Instead of going on a glamorous vacation like others, that void was filled with the rigid rules of daily life. At the dinner table gathered under the lights, he naturally breathed in the way of resisting today's temptations for the sake of tomorrow's stability .
After the meal, that humble dining table would often turn into young Howard's desk. While his parents quietly took care of the housework by his side, he silently read a book under the warm lighting . I did not inherit any grand fortune, but I gained a much more valuable attitude toward life. The unchanging and solid daily life of those days later became a powerful legacy that sustained him even amidst the rough waves of the market .
Growing up in a family atmosphere that valued practicality, young Howard showed an exceptional interest in numbers. Even the complexly intertwined calculation process felt like a clear-cut logic game to him . The old ledgers and receipts his father used to look at were excellent study materials for him.
I felt a deep fascination with discovering a certain pattern among the densely written numbers. That unique sense of having a clear-cut answer further stimulated the boy's logical thinking . Simple curiosity soon led to a personal record. I meticulously wrote down the flow of my allowance in a small notebook, categorized by item, and went down .
Watching the figures pile up one by one, the boy instinctively realized that numbers are not merely symbols, but mirrors reflecting reality . To him, the accounting ledger was not just a simple record book. That clear [musical] principle of perfect balance between income and expenditure came to the young boy as the most trustworthy and beautiful order .
The flawless world created by numbers has become 's own powerful weapon for deciphering the complex financial markets day after day. This boy, who understood the world through logic, was naturally taking his first steps toward the path of investment . A young man fascinated by the clear order of numbers knocked on the door of the prestigious Wharton School at the University of Pennsylvania in 1964.
It was here that he took his first step into the world of in earnest. The campus, lined with antique university buildings, was a completely new world to him. Among the artisans gathered from all over the country, curiosity about numbers gradually turned into a sharp intellectual ambition. As he climbed the heavy stone steps toward the classroom, he realized the weight that this historic academy demanded.
A grueling training awaited us, one that involved going beyond simple calculations to dissect the value of a company from a multi-dimensional perspective . The night in the library, filled with thick textbooks, continued without a break . It was a process of grasping the essence of the business hidden behind the numbers .
By analyzing numerous real-world cases, he further broadened his perspective on reading the market . The intense training at Wharton School completely changed his perspective. The ordinary boy who liked numbers was suddenly transforming into a prospective investor who could see through the massive trends of the market.
The major he chose at the Wharton School was Finance. It was a process of refining my vague sense of numbers into a solid academic framework for evaluating the actual value of a company. The nights spent poring over thick financial statements gradually grew longer. I traced the true meaning of cash flow amidst complex figures .
Instead of a flashy exterior, we fiercely learned the intrinsic value of a company through cold, hard numbers . Buried in thick textbooks in a dark corner of the library, he wrestled with numerous valuation models all night long . Beyond simply memorizing formulas, I delved deeply into the logic where numbers prove the reality of the company .
Training followed in applying the theoretical framework learned in the classroom to the actual histories of companies . He began to cultivate the discernment to read the signs of real crisis and opportunity behind the neatly organized financial statements . This academic training became a solid foundation that would later support him even in the face of the market's official maidservants .
It was the moment when the lifelong weapon of thorough value assessment was finally perfected . He, who built the framework of numbers with finance, has one more interesting background. It was the Japanese studies non-publication. I put down the cold calculator and started looking into unfamiliar cultures and societies.
On his desk, where he used to read the world only through numbers, books dealing with Japanese history and culture had suddenly appeared. It was training to grasp the complex context in which people and society operate, beyond rigid economic indicators . Japanese philosophy and history books demanded a completely new way of thinking from him .
Unlike financial equations with a clear-cut answer, it made me realize how human psychology and unique culture move the market . The two disciplines, which seemed different from each other, merged exquisitely within it . As we layered the color of cultural understanding over cold financial indicators, global trends that the numbers failed to reveal began to converge.
As a result, this unique journey made him different from ordinary financiers . Combining precise numbers with introductory insights, his unique investment philosophy has finally taken deep root. After finishing his studies at the school in 1967, he prepared for his next journey as an older brother. What led him to was none other than the snow-covered Business School of the University of Chicago.
Walking across the campus where the biting lake and wind blew, he sensed an academic challenge of a completely new dimension . The intense journey to delve deeply into the fundamental principles of financial markets, going beyond practical learning at Wharton, has just begun . The academic atmosphere here was distinctly different from before.
Fierce debates armed with thorough data and figures continued every day. He sharply developed his own unique perspective on the market amidst a flood of complex theories. The efficient market hypothesis, which was leading the Chicago School at the time, was both a huge wall and a new stimulus for him.
Walking through the snow-covered campus at dusk, he found the gaps in the seemingly perfect theory and firmly established his own philosophy . The intense time in Chicago was not just the process of earning a semester . It was the moment his solid investment philosophy, which would overturn Wall Street's common sense by constantly questioning conventional theories, was finally completed .
At that time, the University of Chicago was like a huge melting pot of modern finance. At the center of it all, a new and powerful theory called the rhythmic market hypothesis was just emerging [in music]. The 7th blackboard in the classroom is always packed with complex mathematical formulas. It was a very cold and pessimistic premise that all market information is already perfectly reflected in stock prices .
If this hypothesis is true, it leads to the helpless conclusion that no one can beat the market . Left alone in the empty classroom, he began to harbor small doubts about this seemingly perfect logic . As he quietly stared at the densely packed formulas, he felt a strange sense of disconnect. The theory seemed perfect without any flaws , but the reality was different.
The blind human greed and fear that shake the market were nowhere to be found in that cold formula. He discovered a rather huge opportunity in the gaps of this seemingly perfect theory . When everyone resigned themselves to the fact that they couldn't beat the market, he saw through the real answer hidden within people's anxiety and greed .
economic indicators and corporate earnings pouring out ceaselessly. According to the theory, this vast amount of information is already converted into a perfect price and established in the market the moment the type is printed on the paper. Finding hidden undervalued stocks to make huge profits is nothing more than a vain fantasy.
It was a cold and firm verdict that no one can consistently beat the market. The market was regarded as a huge, emotionless machine, like a ticker that constantly spits out paper . It meant that no matter how excellent an individual's analysis was, they could not move before this perfect machine . No matter how shocking the news breaks, the information solidifies into stock prices in an instant .
The very attempt to seize trading timing one step ahead of others was dismissed as nothing more than a meaningless, futile effort. In the end, the conclusion reached by the Chicago School was very clear. The point was that no matter how smart a fund manager is, they cannot achieve a long-term victory against this perfect market .
All individual analysis and effort became a thoroughly powerless existence in the face of that absolute efficiency. Marks also deeply agreed with the logical perfection of this theory . However, as he watched the people passing by outside the window, he thought of one crucial variable. It was humans who could never be calculated by cold formulas.
The formula on the paper was clearly perfect. However, the real market involving humans with emotions was different. I was convinced that the moment greed and fear swept through, a crack would inevitably appear even in that solid theory . Looking at his reflection in the window, Marks quietly became convinced.
The fact that no matter how brilliant an investor is, they are ultimately just an ordinary human being swayed by emotions. The perfect premise that everyone is rational. However, the moment that premise is shattered, cracks will inevitably appear in the market. He instinctively sensed that a huge opportunity was hidden within the wavering public sentiment .
Ultimately, the blind faith that the market is perfect was itself the cause of the greatest inefficiency. This , this young student's sharp insight, later became a solid foundation for a legendary investment philosophy. In 1969, after completing all his studies, Marks returned to his hometown of New York.
And I took my first step into the investment research department of Citibank, a giant of the financial world at the time. Leaving the world of theory behind, the New York financial district I encountered was overwhelming just by its sheer scale. By crossing the threshold of a massive bank, he finally plunged into the real market of outside of textbooks .
The magnificent bank buildings soaring towards the sky exuded the weighty authority of American finance at the time . It was in the very heart of this massive capital that the young Marksโ fierce real-life battle finally began . Pushing open the thick revolving door, the interior of the bank was suffocatingly solemn and bustling.
The vivid ledgers and numbers of countless companies piled up like a mountain on the desk of this rookie analyst . It was now time to apply the sophisticated formulas learned in the classroom to the rough ledgers of real companies. His true journey began at the place where perfect theory and imperfect reality intersected.
The first mission given to rookie analyst Marks was to analyze the blue-chip companies that were leading Wall Street at the time . To find the direction in which GT Bank's massive capital would move, he had to dig into the true value of the company through a mountain of reports. While others cheered for spectacular growth, he silently examined the very bottom of the financial statements .
We went through the endlessly continuing numbers one by one and focused on the actual cash flow generated by the company . On the desk, dozens of corporate annual reports were always piled up like a mountain. He wasn't simply satisfied with his brilliant past [musical] achievements . Instead, I continued my persistent analysis late into the night to find the subtle risk factors hidden behind those seemingly perfect numbers .
What he particularly focused on were the small footnotes in financial statements that the public often overlooks. I meticulously tracked the traces of debt or inflated assets hidden behind glamorous prospects . Digging into numbers that others did not see, he realized the bone-chilling truth of . The fact was that no matter how great a company is, if you buy it at too high a price, it becomes a failed investment .
At the time, Wall Street was completely captivated by the 50 super-blue-chip stocks known as the Nifty Fifty. It was an era dominated by a blind belief that these stocks would never fall and would rise forever . At that time, people scrambled to buy these stocks without looking at the actual value or price tag of the companies .
This is because it was a so-called one-decision stock, meaning you never have to sell it once you buy it. As blind buying poured in , the stock price chart drew a sheer vertical rise. The market at the time was in a bubble state that completely defied financial common sense, with stock prices rising as much as 80 times their earnings.
The phone in the picture frame rang incessantly from morning . The rational voices warning of the absurdly high prices were buried under massive, blind buy orders of greed, leaving no trace to be found. A massive collective delusion that you make money just by buying it, even if it is expensive, dominated the market.
However, the culmination of this endless greed later deeply imprints the most important theme of evil character on young Marks . Giant institutions, including CTN, also stood at the center of this frenzy . All that mattered to them was securing the shares. The purchase price written on the document was virtually meaningless.
Mechanical approval stamps were incessantly stamped over massive buy orders worth tens of millions of dollars. Thorough valuation was completely omitted, and only instructions were given to secure more shares . Even when the stock price skyrocketed overnight, not a single person stopped to raise any questions .
Huge capital moved simply by inertia, and the only fear was falling behind in this bull market . As the stock price was abnormally canceled, their buy orders actually became even more intense. Analyzing a company's book value or fair stock price was simply dismissed as a cumbersome waste of time . In the end, the final approval stamp was stamped unhesitatingly on the pile of documents.
No one asked about the price tag . Marks clearly witnessed this critical scene of a giant bank walking into a bubble of its own accord . However, the festival that seemed like it would last forever came to a very sudden end in 1973 . The oil shock originating in the Middle East struck the real economy, instantly freezing the market that had been rising unstoppably.
Even the ultra-high-quality stocks that seemed like they would never collapse were no exception. Stocks plummeted by nearly 90% one after another, and the market literally became a chaotic mess. The front page of the economic newspaper delivered every morning was filled with pessimistic news of a crash.
It was a shocking moment when the massive blind faith that was said to never collapse was thoroughly shattered. Soaring meat prices per barrel have slowly tightened the noose around companies. Faced with uncontrollable inflation, even the super-rich companies that were said to never collapse fell into a swamp of deficits in an instant.
The arrogant investment formula that ignored the price ultimately ended in a disastrous disaster . No stock can be great regardless of its price. It was the moment when a painful lesson was deeply engraved into young Marks's heart through . Left alone in the empty office where the market was full of jaundice, Marks fell into deep thought.
He calmly reflected on the true cause of the tragedy he had witnessed. The conclusion was simple but clear. The fact was that no matter how great a company is, it can never be a good investment if an absurd price is paid . No matter how dominant the number one company may be, if you pay a price much higher than its fair value, it inevitably becomes a failed investment .
It is that has realized deep down that investment is ultimately not a matter of what you buy, but how much you buy it for . No matter how flashy the adjectives attached to a company, if the price tag was not fair, he had to turn away decisively. This cold principle would later become the absolute philosophy that permeated all his decisions.
A proposition that would define the rest of Marks' life was completed in his mind. The fact was that buying something good and living well are completely different. It was a painful truth that in the investment world, true victory or defeat is determined solely by the purchase price . He sat in the silent office and uttered this bitter truth as if making a vow.
You shouldn't look for great companies, but buy them at a great price . This firm principle became the unwavering compass that guided his investments throughout his life . In 1978, five years after the market collapse, Marks was given a completely new mission . I was assigned to the Convertible Bond and Hyde Bond departments.
It was the moment I left the glamorous stocks behind and faced an unfamiliar bond certificate . His desk was piled high with heavy bond documents . It was a dry and complex world of type, completely different from the glamorous stock market . He carefully turned the first page of the unfamiliar document.
I held the thick bond certificate in both hands . The paper was densely filled with the interest and situation that the company had to repay . Unlike stocks that relied on rosy prospects, it was a world of thoroughly calculated promises. I went through the complex contract clauses one by one with my finger.
The Hild book and the transition corpse he newly took on were areas that required a deep analysis of corporate survival potential, going beyond simple calculations. He clutched the thick certificate tightly. It was a rough market that everyone turned away from, but Marks was convinced of his own new path amidst this heavy bundle of paper .
The high-yield bonds he newly encountered were a sector thoroughly marginalized by the mainstream financial sector at the time . People called them junk bonds, meaning trash, because of their low credit rating. To respectable investors, these documents were nothing more than dangerous bundles of paper that could go bankrupt at any moment.
To the elites of that time who were obsessed only with blue-chip stocks, these bonds were treated as waste that wasn't even worth looking at . It was pushed into a dark corner of the market like a pile of paperwork that no one looked at . In a corner of the institutional investors' office, unopened investment prospectuses were crumpled and lying around .
Because a vague fear that one wouldn't even be able to recover the principal was dominating the market. For major institutions, this bond was a completely prohibited item to purchase . Even the thick internal rulebook strictly forbade looking at this ominous pile of papers. If a fund manager touched this risky asset, it constituted grounds for immediate dismissal .
Documents abandoned in a dark corner that no one pays attention to . However, the market's thorough neglect and blind fear were, paradoxically, concealing the most perfect opportunity for . Marks began to read the true value that no one had discovered within those crumpled papers that everyone had thrown into the trash .
To properly explore this unknown territory, Marks meets Michael Milken, the absolute pioneer of Hyde Market . The handshake between the two in the dim conference room became the first step in opening a new era of investment. Complex financial data was spread out on the table. Milka pointed out with clear data how much the risk of bankruptcy was inflated.
The true structure of Hyde Market, which had been obscured by vague fear, was clearly revealed. Wilken's explanation was not a simple numerical comparison. It was only then that Marks fully realized . A huge price gap created by blind fear . That was exactly the real structure of this market. The tremendous Premier Marks, hidden among the trash thrown away by people, clasped Milken's hand with firm conviction.
It was the moment he discovered a new stage to which he would devote his life. Their meeting was brief, but its resonance shook a lifetime. Marks now steps in earnest into this land of immense opportunity created by public fear . Based on the data presented by Milken, Marks closely analyzed the return chart.
The traces of the institutions' blind obsession with depth that absurdly lowered prices were clearly visible. As everyone was just blindly avoiding it, interest rates were abnormally high compared to the actual probability of default . The market's blind prejudice actually ended up creating a huge margin of safety.
Marks dug into the detailed indicators of the abandoned bonds one by one, as if using a magnifying glass . Behind the label of 'Jungk' , there were solid companies with steady cash flow hidden away. A single word, "ineligible," written in the investment prospectus caused the demand from all institutions to evaporate .
That mechanical selling pressure was abnormally crushing the price while concealing the reward of massive returns . Eventually, he realized. I mean that the real danger is not the rating on the label, but the absurdly wrongly priced itself. This simple truth, salvaged from the blind spots of the masses, later becomes the most powerful weapon of that runs through Marks's investment life .
As we eliminated the real risk of bankruptcy through a thorough separation of wheat and chaff, surprising results emerged. Junk bonds, which the market had discarded, have instead become the safest and most steady source of returns. As the fear subsided in the market, a massive premium accumulated on the books as Bossran's revenue.
Although it appeared to be the riskiest asset, the thoroughly controlled portfolio drew an unwavering upward curve. While others were backing away in fear of a crash, Marks' fund raked in massive interest every single month. Thanks to the market's severe prejudice, they were able to monopolize the most certain profits without any competitors .
Regardless of the noise in the market, the cash flow recorded in the books was solid and unwavering. If structural risks were strictly controlled, so-called junk bonds were no different from a goose that lays gold coins . As fatal risks were thoroughly eliminated, the junk bonds, which were once a deep target, became the most reliable revenue source.
The surest opportunity lies where others fear . This shining upward curve has perfectly proven that truth . This dazzling success has instilled a firm truth in Marks. The fact was that no matter how terrible an asset is, it can be an excellent investment if the price is low enough . When prices drop to an extreme level, a massive defense mechanism is formed in itself.
It becomes the safest state where there is nothing left to lose, even if there is a fatal flaw in the asset . The scales measuring risk were determined not by the quality of the asset, but solely by price. Even if it has fatal flaws, if the price tag is much lighter than that, the scales tipped decisively toward solid profit .
Conversely, no matter how excellent a company is, if its price is excessively high, it becomes the most dangerous asset . The bitter lessons learned from the collapse of the Nifty in the past have formed a perfect symmetry in this abandoned junk bond market, culminating in a philosophy. Ultimately, safe assets do not exist in the first place.
Only a safe price exists. Howard Marks' legendary investment philosophy was finally completed the moment he salvaged this simple yet sharp truth from a discarded pile of trash. In 1985, Howard Marks decided to spread his own investment philosophy on a wider stage . He left Citibank, where he had worked for a long time, and moved to TCW, an investment firm located in Los Angeles.
We needed an environment where we could escape the complex bureaucracy of massive banks and focus solely on investment . TCW was the perfect nest to fully support his unique high-heeled strategy. His footsteps as he entered the lobby of the modern headquarters in Los Angeles were filled with conviction .
Leaving behind the outdated practices of East Wall Street, I became able to fully design my own fund within the unique flexibility of the West . Here, he was not just a cog in the machine. With the company's full support, we began to build an independent portfolio focusing exclusively on Hyde bonds and convertible bonds .
As he was able to fully implement his own principles, his fund soon attracted a huge amount of capital . Subro's bold move to became the most decisive stepping stone on his investment journey, which would later become legendary . Marks, having settled into TCW, immediately began forming his own team .
In the process, he recruited Bruce Kashi, a young lawyer with keen analysis. With his uniquely meticulous legal knowledge, Tashi saw through the hidden aspects of the complex debt contract . Marks' investment philosophy and his sharp analysis combined to start creating perfect synergy. The two sat facing each other until late night, digging through the complex documents of companies on the brink of bankruptcy .
When Marks calculated the investment risks, Kashu found legal safeguards, and they worked in perfect harmony. A single line of clause that Kashi found amidst a thick stack of contracts would often prevent an investment that could have led to a huge loss . Their collaboration, perfectly filling each other's gaps, developed into a strong bond of trust that went beyond mere colleagues.
Marks had a hunch that this sharp lawyer was the perfect partner to spend his life with . The great journey of the two people who would later build a massive investment firm together began right on this table. If Marks controlled macroscopic risks and drew the big picture, Kashi filled in the microscopic gaps with meticulous legal knowledge .
As these two perspectives overlapped, perfect synergy blossomed. When Marks read the huge waves in the market, Kashi designed a sturdy breakwater to safely cross those waves . As financial charts and legal contracts were layered on the two men's desks, a meticulous investment strategy that no one could imitate was perfected .
Even when the huge waves of the market crashed down, the intricate legal mechanisms Carl pointed out served as a sturdy shield. A perfect fusion of macroscopic insight and microscopic analysis . This was the absolute formula for mismatched investments . While others gave up, fed up with the complex paperwork, the desks of these two became a site for discovering opportunities .
They were drawing up their own distinct revenue model amidst the chaotic entanglement of legal provisions and financial data . Financial charts and legal documents abandoned on the desk . Their intricate combination went beyond mere teamwork and became the solid cornerstone of a colossal legend that would shake Wall Street .
In 1988, the gaze of this perfect duo turned toward a completely new place. It was the bad debt of companies on the verge of bankruptcy . Amidst the piles of documents that everyone had dismissed as scraps of paper, they instinctively sensed the hidden value. The moment the gavel of the Volcano Court struck, the public fled in terror .
However, for the two of them, the declaration of bankruptcy was not the end of the business . It was a sure opportunity to restructure debt and be reborn under the protection of the law . Behind the bonds dumped on the market at rock-bottom prices, there were still valuable assets remaining, such as factories and real estate .
With Kashu's meticulous analysis serving as a legal shield, Marks accurately calculated the true value of the plummeted bonds . The distressed debt dumped by terrified investors was their greatest prize. It accurately grasped the fact that even amidst the complex procedures of a volcano, the creditor's rights are strongly protected .
While Wall Street turned its back on bankruptcy papers, the two men dug up a massive gold mine there. An empty market that no one looked at. This investment in distressed debt later became the most powerful and unrivaled weapon that would lead the two men to become legends . The moment news of corporate bankruptcies hit the market, Wall Street was plunged into blind fear.
Investors whose reason was paralyzed were busy dumping their bonds at rock-bottom prices. A 1-dollar bond plummeted to 20 t 10 t in an instant. No one calculated the remaining assets the company possessed. It was filled with nothing but a clamor to erase it from the ledger immediately. In particular, institutional investors were not even allowed to hold defaulted bonds due to regulations.
In the irrational trading room, only self-produced compositions demanding immediate disposal, regardless of price, rained down. The massive volume of goods that poured out completely overwhelmed the market where foreign buyers had disappeared. To the crowd terrified by the impending crash, objective data or the possibility of recovery were no longer on their minds.
As a result, prices plummeted, completely disconnected from the company's actual value . That bottom of extreme terror, where everyone had fled, was the perfect hunting ground that the two had been waiting for . They very coldly dug into the corporate ledgers left behind in the wake of the fear . No matter how messed up the company was, there were clearly still real estate, equipment, and cash assets that could be sold immediately .
Karsh meticulously calculated the true value he could secure by disposing of the remaining assets . If the liquidation value far exceeded the plummeted bond price, it would no longer be a pile of debt, but rather junk that would generate massive profits. The two of them flipped through a mountain of financial statements and meticulously tapped on their calculators .
Even looking solely at the legally guaranteed collateral assets, they were easily surpassing the plummeted bond prices. The market dumped the bond for just 10, but even the worst liquidation value exceeded that by several times. It was the moment we confirmed an overwhelming margin of safety where failure was impossible.
The scraps of paper that others had thrown into the trash were transformed into treasures that would yield enormous profits the moment they underwent their meticulous calculations . This was the real appeal of distressed debt investment that Wall Street was missing. Based on this conviction, the two finally set out to act.
In 1991, after persistently persuading conservative institutional investors, we finally officially launched the first distressed debt fund. As a fountain pen passed over a thick contract, a new era of investment began. It was the moment when the bonds of a bankrupt company, which everyone had turned their backs on, were finally recognized as an official investment target by institutions.
The massive initial capital amounting to tens of billions of won demonstrated the market's firm confidence in the two people's analysis . It was as if a massive bridge of capital had finally been built upon a pile of trash that no one paid any attention to . Before the ink on the contract had even dried, the two hurriedly began their action.
The massive threads they inflicted were about to become the sharpest weapon in the huge hunting ground known as Hongrakjang. The moment the ink dried on the documents, the signal flare of a massive investment empire was fired. In the abandoned market that others had been digging into, the two finally began to build a sturdy fortress.
Immediately after the fund's launch, dark clouds of recession loomed over the U.S. economy. companies went bankrupt one after another all over the country. However, this fading crisis became the perfect hunting ground for them, who had just loaded their ammunition. The huge factories that had closed down and the machines that had stopped working showed how severely the economy had frozen at the time.
However, the debt of these companies, thrown out at rock-bottom prices in the market, became the most tempting prey for the fund and was piling up steadily. In the aftermath of the fierce storm of the recession, even solid companies collapsed helplessly. As heavy dark clouds gathered thickly over the factory district, cheap bad debts poured down like a flood.
For them, it was an endless sea of โโ opportunity. Rain fell incessantly over the iron gate of the Gukchin factory . Pessimism weighed down the entire market, but they were different. Even in the harbor, the bargain-priced low-tier dungeons began quietly sweeping up the real assets. Cold rain poured down on the rusty factory walls .
People hung it up avoiding the room, but these people were different. He continued the perfect hunt by quietly sweeping up the prime assets thrown into the blood money. As soon as they emerged from the tunnel of Blang, their thorough analysis was immediately proven by numbers . While controlling risk to the extreme, the fund achieved a phenomenal annual return of over 20% .
This was by no means a coincidence or a stroke of luck . Even when the entire market was gripped by extreme fear and under investigation, their portfolios continued to draw a solid upward curve . Wall Street was shocked by this overwhelming achievement salvaged from a garbage heap . Above all, what surprised Wall Street was the element: overwhelming defensive power.
Even during a period of successive bankruptcies, the fund's assets remained solid. It is thanks to the fact that I didn't just blindly buy cheap , but only thoroughly verified companies. As I completely controlled my losses, profits snowballed, riding the magic of compound interest. Even in a dark market, their performance indicators alone shone brilliantly and spread out unhindered.
This phenomenal return of 20% per year was not just a simple number. In a pair that others turned away from, through thorough calculation and control, it was a symbol of perfect victory for the vision . However, behind the overwhelming achievement, new concerns were emerging . As the fund grew uncontrollably, the stifling bureaucracy typical of massive organizations began to hold them back.
The non-performing loan market was a race against time. However, the massive organization's slow payment lines were a fatal obstacle. After clearly missing the opportunity, they finally decide to pack their bags for . We could no longer be bound by outdated regulations. I desperately needed an independent environment where I could focus solely on investing.
Packing my bags in a dark office, I finally decide to take a new leap in . At the moment the briefcase was decisively wounded, there was no lingering attachment to in their hearts. The time has come for them to leave the massive organization and sail solely with their own philosophy . Leaving behind the familiar and safe nest, I quietly turned off the lights in the office.
It is the beginning of true independence, where one must break free from the shadow of a giant signboard and prove one's solely through skill. In April 1995, they finally established a new nest to implement their independent investment philosophy . Five core members, including Howard Marks and Bruskash, joined forces to open Oaktree Capital Management.
It was n't simply a matter of putting up a new sign. That name, meaning a sturdy oak tree, held a firm resolve that would never be shaken, no matter how turbulent the market may be . A brass signboard reading " ," embodying their philosophy with weight, hung on the wall of the newly prepared office.
It was Muwon's declaration to focus solely on the essence of investment instead of flashy decorations. Every morning, as they passed that signboard, the members reaffirmed their initial resolve. It is that has finally completed an ideal environment where all cumbersome reporting procedures are eliminated, allowing one to focus solely on the essence of investment.
This firmly fixed brass string quietly foreshadowed the legendary history to be written . The true story of Oaktree Capital, without any compromise, has finally begun. The reason they chose the name Okri was clear. It was a declaration to lead the company like an oak tree that takes root deep in the unseen ground and grows slowly and firmly .
Rather than spreading its branches splendidly to provide immediate growth, it chose the path of building a solid foundation deep underground where it was not visible . It was to establish a firm center that would never collapse even amidst the fierce external winds of the market. A thick pillar that has endured for hundreds of years is never built overnight .
The name Oaktree was imbued with a weighty philosophy of steadily proving its value through the test of time, rather than seeking a fortune overnight . Even when the harsh economic winter strikes, the oak tree silently stands in its place, having shed its leaves . Likewise, it was a promise to serve as a reliable refuge for investors, never wavering even in the face of market volatility .
The massive oak tree standing silently in the middle of the rough tranquility of the wall is a monument in itself. The seed of this philosophy they planted would later cast its shadow over her, the most prominent and massive woman on Wall Street . The first principle Oaktree put forward was , which was very clear and firm.
Do not try to pick a winner; thoroughly avoid the loser. The start of the investment was not about generating profits, but about thorough defense that firmly closed off the risk of loss . Companies with fatal flaws were ruthlessly weeded out of the portfolio . It was a firm belief that if fatal losses were thoroughly prevented, the surviving companies would generate profits on their own.
It is by no means an easy task to firmly lock the door in the face of the temptation of 100 million won . However, they completely isolated the risk factor of uncertainty from the portfolio . Instead of forcibly opening the top of the profit, they completely sealed the bottom of the loss like a thick vault door .
This is because if you completely eliminate the risk of bankruptcy, the overall return of the portfolio naturally follows an upward trajectory . Inside the heavily damaged iron gate, the asset sprouts and grows on its own. This simple principle of defense to avoid fatal defeat . That was the steadfast magic unique to Oaktree that achieved the greatest victory .
As time passed, in 2006, the world turned in the exact opposite direction of Oaktree's philosophy. The American evening housing market was truly engulfed in madness, and Wall Street was deeply intoxicated by a huge bubble of greed . Muge loans were issued indiscriminately to people who did not even have the ability to repay them .
On the outskirts of the city, new houses that might never be sold were being built endlessly, like a thriving village . In the residential area on the outskirts as the sun set, only darkened, empty houses stood eerily in a row. On the outside, it was a glamorous symbol of wealth, but on the inside, it was like a cyano-cyano bomb that could explode at any moment.
Wall Street scraped together these bad loans and packaged them into massive derivatives. They thoroughly hid their rotting insides and slapped on the fancy label of safety rating . No one doubted that the party would end. The entire market was racing at full speed toward the most dizzying edge of a cliff amidst the huge illusions of endlessly rising housing prices and flashy financial engineering .
When everyone was blinded by greed, Mark's gaze was cold . As he sifted through the complex mortgage papers piled on his desk one by one, he smelled the exact same disaster as the 2000 Dawn Bubble. Loans of hundreds of thousands of dollars were being poured out indiscriminately, even to people with no income or jobs.
As he peered into the terrible truths hidden throughout the documents, he was convinced of the massive catastrophe to come. The moment he checked the hidden clauses of the complex contract through a magnifying glass, he finally reached a conclusion. It is merely a flashy facade; this is a massive entertainment establishment, exactly the same as the Dark Comber Unit of the past .
He traced how these fatal bad loans flowed into the heart of Wall Street . Even huge financial institutions were holding onto this rotten fairy tale thread like a lifeline . Finally, all the puzzle pieces have been put together. Marks took his eyes off the complex paperwork and sensed the massive tsunami that was about to strike.
Now, the only thing left was to erect the warning barrier in preparation for the catastrophe. Marks immediately took action . I quickly liquidated my assets to prepare for the coming massive collapse. They quietly loaded a massive reserve amounting to a whopping 11 billion dollars. This huge fund was not injected into the market immediately .
Instead, thoroughly sealed away, they silently waited for the coming moment of crash . It was as if he was preparing for war all alone while others were raising a toast . Even carrying this enormous amount of cash, they never moved rashly. Even amidst the sweet temptations of the market, this massive thread remained firmly locked, quietly waiting only for the moment of launch .
It was an overwhelming power stockpiled solely for the coming massive crisis . At that moment when everyone was dancing on the foam, the massive funds were chillingly standing me still . It was the perfect preparation for a hunt to scoop up assets that would be dumped at rock-bottom prices amidst the impending catastrophe .
This $11 billion, kept deep in Oaktree's vault, was about to become the most reliable shield and sharp weapon amidst the massive storm of the impending financial crisis. Now all preparations are complete. In September 2008, what was bound to happen finally happened . Lehman Brothers, a giant with a 158-year history, has declared bankruptcy.
3 kills capturing the global market. The curtain rose on the financial crisis . A procession of people packing their bags and being kicked out of the building covered Wall Street . The old cardboard boxes abandoned in the rain were a shabby trace showing that the era of greed, which seemed like it would last forever, had come to an end.
The documents soaked in rainwater and the worn business cards made me keenly feel the collapse of Wall Street, which once commanded the world. It was a massive catastrophe that was unimaginable just a few days ago. This single bankruptcy was not merely the collapse of a company . It was the moment when a massive domino of terror collapsed, paralyzing the global financial network in an instant.
The global financial system has truly frozen solid. It was an unprecedented collapse of trust where no one could trust each other . On that cold street of despair, the time was finally approaching for Oaktree to step forward . At the moment the market panicked and dumped all assets, the seal of 11 billion dollars was finally broken.
In a panicked market, they boldly started scooping up blue-chip assets . The trading room was absolute chaos. Even in front of the monitor pouring out red numbers, Marks and Karsh [did not waver at all with the music]. Rather, amidst this chaos, I coolly calculated the true value of the blue-chip asset that was thrown into the pearl price .
Their first target was the blue-chip bonds that others had thrown away in fear . The $11 billion that had been stockpiled for a long time finally started sweeping up the bottom of the market. When all the monitors on Wall Street were heavily colored , endless buy orders flashed on Oaktree's screen .
unhesitatingly devoured assets like offerings that others had thrown away . The deepest bottom of the blood-splattered market . There, Marks gave the most confident . Thoroughly calculated courage began to be proven as a vivid green light in the deep darkness . As time passed, the storm in the financial market began to subside.
The assets that Oaktree had collected for a pittance amidst extreme fear finally recovered their original value and transformed into a huge golden mountain. High-quality bonds that had been discarded like scraps of paper began generating massive cash in just one year . The profits Oaktree Guy raked in amidst the crisis amounted to billions of dollars.
It was a perfect victory with that no one could imitate. It was a remarkable result that went beyond solid success . That fair, which everyone else had run away from, became a massive vault of wealth for Oaktree. This bold decision was recorded as the most legendary investment in Wall Street history.
While other financial institutions were still dealing with the aftermath, massive wealth accumulated in Oaktree's vaults . It was the moment when the bargain-priced assets lying on the ground transformed into dazzling gold . At the end of the mud-like despair, the old bonds they gave finally responded with a huge golden light .
Unprecedented astronomical profits. That is how Oaktree became the most brilliant legend on Wall Street. After turning a massive crisis into a legendary success, Marks begins to organize his 40-year investment philosophy. Thoughts on the famous fish investment book that captured all the teas of 2011 It is finally being published.
It was not a solid theoretical book . It was a weighty record that fully captured the essence of the notes he had taken for customers for decades, as well as his wisdom in seeing through the aimlessly repeating cycles of the market . Immediately after its publication, this book instantly became a must-read among Wall Street experts.
This is because it presented a profound insight that went beyond simple profit generation techniques to control risk and see through the hidden aspects of the market. The most powerful topic raised by this book was so-called secondary thinking. The point is that you can never beat the market by thinking the same way as everyone else .
He emphasized that only those who delve beyond the visible phenomena and uncover the true dangers hidden beneath will survive . Even the master of value investing, Wallace Buffett, spared no praise for this book . Even to this day, it stands guard on the desks of countless investors, serving as an unwavering compass for investment .
The secondary bone broth emphasized by Marks is a process that goes a step beyond ordinary intuition. While others simply think, "Let's buy the stock because it's a good company," he poses a question of a completely different dimension . If that good company is already receiving everyone's praise, isn't the stock price already at rock bottom?
Wouldn't now actually be the time to sell? When primary thinking stays at the phenomenon right in front of you, secondary thinking sharply digs into what lies beneath. The market never moves in a straight line . Countless variables and psychology intersect in a complex way. Secondary thinking is a sophisticated [musical] insight that identifies hidden patterns that the public has missed right at this intersection .
If you reach the same conclusion as the ordinary majority, you can never surpass the market average. While others are satisfied with fragmentary results, you have to calculate countless possibilities and probabilities in a three-dimensional way. The path of thinking differently from others is inevitably lonely.
Because it requires the courage to go against public consensus. However, Marks is a member. That very solitary insight is the only key to producing excellent results in . Marks explains this difference with a very intuitive example. It is a truly excellent company, so let's buy the stock right now .
This is the typical primary thinking that the public often falls into . On the other hand, secondary thinking goes a step further and asks this counter-question. It is true that it is a great company. However, since everyone believes that, the stock price of has already become ridiculously expensive.
So, you should actually sell it right now. It was seeing through the true value of hidden beyond the favorable news right in front of us. Primary thinking weighs only visible splendor . However, let's consider secondary thinking and the price bubble created by crowd acclaim . It is about coolly discerning true, substantial value over superficial charm .
When the public, intoxicated by the splendor, scrambles to pay money, investors of secondary thinking capture the imbalance of weight. Because the more perfect an object looks, the more expensive it already is. Ultimately, secondary thinking is not being swayed by flashy appearances . It is the discernment to recognize the true value of a heavy and solid stone rather than a coveted gem.
Howard Marks brings up a very intuitive ratio when explaining market volatility . It is none other than a giant clock axis that swings ceaselessly from side to side, โthat is, a pendulum. A pendulum never stays on a stable central axis for long. It is just drawing an arc from one extreme to the other without any advancement.
The psychology of the market surrounding us is exactly the same as the scale of this huge pendulum. When additional gains hit one end, the market heats up with optimism and greed . People believe in eternal ascent and jump into danger without fear. However, at the very moment it reaches its highest point, the pendulum already begins to prepare to fall to the other side.
The pendulum swings in a strong direction at a terrifying speed . There is never a stopping point at a stable middle ground . With that same acceleration, it is swept toward another extreme of fear and despair . Even fear that has reached the extreme is never eternal. This is because a pendulum always changes direction and returns once it exhausts its accumulated energy.
Marks finds opportunity precisely within this unchanging rhythm of the pendulum . Marks says that the scale of this giant pendulum is a mirror of human psychology . As soars toward one end called additional greed, the market gradually loses its reason. At the tail end of the of greed that has reached its highest point, people mistakenly believe that this ascent will be eternal .
But just as cannot defy gravity, it leaves a brief silence behind and begins to collapse toward the opposite side of the gear . A pendulum falling from the highest point never stops at a reasonable midpoint . As fear instantly fills the void left by the collapse of greed, and the market plunges furiously toward the opposite extreme, the moment it reaches the edge of fear, the public imagines only endless despair .
However, at that very darkest point, the pendulum already holds the energy for ascent. Ultimately, an excellent investor wisely turns this irresistible pendulum rhythm against itself . It is to quietly approach the darkest moment when the public is terrified and throws everything away, and to pick up the opportunity that has fallen to pearl prices.
Amidst extreme market volatility, Powered Marks directly refutes a long-held belief of modern finance . It is precisely the attitude of downplaying risk as mere price volatility. Scholars point to fluctuating graph lines and teach that this is danger. However, Marks was different. This is because the mere fluctuation of prices itself does not pose a real threat to .
To him, the fluctuating prices were nothing more than passing, temporary noise. Scholars were busy calculating this shallow volatility, but Marks asserted that it masked the true face of the risk. It points out the delusion of scholars who believe they have controlled risk by calculating volatility with a formula.
Marks firmly drew a line against that old premise that defines the fluctuating graph itself as a danger . He boldly erases the sharp graph symbolizing volatility . Instead, it turns its attention to the real threats that investors should truly fear. It was by no means a mere fluctuation of numbers .
The only real risk to that Marks pointed out was one. A state where the invested capital has vanished without a trace and can never be recovered again. In other words, it is the loss of research capital itself. The temporary drop can be recovered if you wait. However, research losses are different. It is like a burned-out assembly turning into a handful of zero, never to return to its original state.
The capital that has become mine loses even the opportunity to participate in the next bull market. This fatal loss that severs the very survival of the investor is the only real risk he warned of. An investor who realizes the true nature of this fatal threat no longer gets overly excited by routine price fluctuations .
Instead, you focus all your [musical] insights on avoiding the real trap that will shatter your principal . Ultimately, the final task of investment is to thoroughly prevent that single fatal blow that causes capital to vanish forever . Defending this absolute line of defense. That is the essence of risk management that he dedicated his entire life to emphasizing.
To prevent such fatal losses, Marks obsessively clung to a single principle . It is the solid shield known as the margin of safety, which even Wallace Buffett emphasized throughout his life . The principle of the margin of safety is clear. It means buying at a price much lower than the asset's true value.
Even if the fierce waves of an unpredictable market crash down, this sturdy barrier absorbs fatal blows. Our analysis cannot always be perfect. Sometimes, unexpected bad news strikes, or meticulous calculations go awry. Safety Margin is a thick concrete barrier that thoroughly prepares for even the possibility of such errors .
Even if the worst market crash hits and violent waves crash, if you have this margin of safety, will never be swept away. It serves as the last line of defense, allowing you to fully protect your capital and plan for the next opportunity. Ultimately, this obsession with a thorough margin of safety starkly separates those who survive from those who disappear in the market.
It serves as more than just a shield; it is the most powerful foundation for building wealth over the long term . After thoroughly securing a margin of safety, the next attitude he took was to boldly abandon perfect predictions. He asserted that even the most insightful investor cannot completely see through the massive macroeconomic landscape.
Huge variables such as interest rate direction and inflation are intricately intertwined. It is virtually impossible to calculate these countless gears without error with the shallow intellect of humans . The attitude of being certain that one knows the future is the most dangerous arrogance he chose.
Because staking your entire fate on an uncertain outlook is like building a sandcastle that could collapse at any moment. Acknowledging the severe limitations of the future . That is by no means pessimism. Rather, it is an extremely strategic humility that arms oneself so as not to sink even when encountering unexpected reefs .
Even if we cannot know the future perfectly, we can clearly know where we are in the present . boldly discarding vain prospects and focusing on tangible value right in front of you . That was the only answer he found in the vast fog . Based on his previous realization, he presents a clear task . Instead of trying to figure out if it will rain tomorrow, I should check how wet the ground under my feet is right now .
This is the first step in determining the current position of the cycle . Although we cannot know the exact destination of the future, we can estimate where the current cycle of the pendulum is . It is about objectively measuring the temperature of the market to see if it is currently in a state of abnormal overheating or has fallen into an excessive slump .
It is just like a navigator taking out a compass on a rough sea to mark the current coordinates . Instead of finishing tomorrow's winds, it is to coolly assess right now where the ship is floating. The truth revealed by the compass on the map is clear. It is about accurately reading the objective coordinates of whether the market is currently at the end of greed or at the bottom of fear.
If you have clearly recognized your current position, it is now time to act accordingly. It is about deciding for yourself the best [musical] stance you can take right now, without relying on vain predictions. His profound thoughts, which saw right through the flow of the market, began to emerge into the world in 1990 as a single note in .
This introductory poem soon established itself as the most powerful must-read that the entire Wall Street took notice of . Even Wallon Buffett, the investment genius, confessed that he opens the old man's memo in his mailbox first. Even the best investors of the time willingly became students in the face of his insights.
There are no flashy graphs or short-term stock recommendations . Instead, it is densely packed with philosophical insights that penetrate the essence of the market . It was like a reliable lighthouse that helped investors not lose their way in a chaotic market . Whenever the market panicked and lost its reason, his memo was invariably found on the fund managers' desks .
It was because it was the heaviest and calmest voice that held the center in the midst of the crisis . Records accumulated over decades have now gone beyond simple market analysis for . It has gone down in history as the wisest text on Wall Street today and a timeless classic of investment . His memo is on Wall Street.
It is because it boldly removes confusing formulas and complicated financial terms, and captures the essence of the market in easy language that anyone can understand. The void left by removing difficult financial terms was filled with philosophical thoughts that penetrate the essence of the market.
It reads as smoothly as a well-written essay, but the profound insights contained within have served as an unwavering compass for countless investors . When the noise of the market reaches its peak, a single well-crafted line of his clears away the fog in an instant. This is because a single refined piece of writing filled with philosophy illuminates the path forward more clearly than a hundred pages of reports packed with complex figures.
His sentences, imbued with sincere contemplation, leave a deep resonance in the hearts of readers. It gives a sense of relief, as if sitting calmly face-to-face with a wise teacher and having a conversation in the middle of a noisy market. Whenever the market fluctuates and a new crisis strikes, people open his notes again .
โs clear and solid philosophy that transcends the times will continue to serve as a compass for investors, unchanged . In 2019, Oaktree welcomes a massive turning point in business history . They announced a new partnership by selling a majority stake in the company to global alternative investment giant Brufield Asset Management .
This combination was more than a simple acquisition; it was an almost perfect harmony between the two. Brufield, a powerhouse in real assets, and Oaktree, the ruler of the credit market , meshed together like giant gears, completely shaking up the landscape of the alternative investment market . Although it was a massive deal involving the transfer of a majority stake, Oaktree firmly maintained its management independence.
The founding members continued to hold the helm and steadfastly maintained their unique investment philosophy . This strategic combination opened a new stage for Oaktree . With the addition of a powerful global network to Brookfield, they have become able to take control of larger and more complex deals in a single stroke .
Ultimately, this partnership completed Oaktree as a perpetual institution that transcends generations. Beyond the era of the individual founder, within the massive fence of Brufield . Their steadfast philosophy will continue unwavering even amidst the numerous upcoming economic cycles . Although a massive stake sale took place, Oaktree's helmsman did not change.
Powered Marks and Bruskash are still at the forefront of management, leading all investments . Although Brufield's capital has joined, the final authority over investment decisions still remains with Oaktree. Marks and Karsh consistently hold the center of the conference table , personally coordinating every deal with complete independence.
They did not step back leaving only their names behind. At the weekly investment committee meetings, we personally review dozens of reports and scrutinize risks with the same strict standards as in the past. The atmosphere in the conference room he led had not changed at all from before the massive sale .
His profound insight and calm charisma still keep the huge ship called Okri moving forward without wavering . In the end, even with the influx of massive new capital, the heart of Moktree did not lose its original beat. The principles established by Howard Marks will remain unchanged and continue to be the most powerful compass guiding this formidable empire .
In early 2020, the financial market froze as coldly as the empty streets . Amidst the unprecedented market crash brought about by an unknown virus, people were losing their reason and plunging into endless fear . Just as everyone was panicking and dumping their stocks, a new memo from Marks arrived.
He urged them to face reality coolly instead of being swept away by blind fear . He pointed out that even though the fear of the epidemic seems endless, the worst-case scenario is already sufficiently reflected in asset prices . Even in the pitch-black night when the world seemed to have stopped, his gaze, which sees through value, was instead quietly searching for the light of new opportunities in .
Amidst bottomless fear, he advised that now is the time to aggressively buy . He picked up assets that others were selling for dirt cheap, proving once again his philosophy that crisis is opportunity by releasing . In the end, his judgment was correct this time as well. The world that had come to a standstill moved again, and the assets that had been thrown away at bargain prices recovered their value.
His wisdom, which did not lose its center [in music] even amidst endless terror, became the most shining milestone in an unprecedented crisis. Just as the aftermath of the COVID-19 pandemic was subsiding, another massive storm was approaching the ocean of the macroeconomy . At the end of 2022, he issued a strong warning to the market through a memo titled "Huge Change ." It was a declaration that the sweet era of low interest rates, which had lasted for a whopping 40 years, had finally come to an end .
The tailwinds of the past, when it was easy to borrow money, have now completely stopped. A massive change struck, completely overturning the ocean currents themselves . He [argued] that a completely different set of survival rules is needed amidst the waves of expensive capital . Now it is time for to reveal the true faces of the companies that were barely surviving on Kapsan Biz.
He warned that in a harsh system of rising interest rates, only solid profitability would withstand the rough waves of . The sweet formula for success from the past no longer works. Amidst the rough waves of interest rate hikes, he advised that the asset allocation landscape needs to be completely reorganized .
This is because even safe investment destinations can become massive obstacles under the new system . Marks' warning is firm. These rough waves are not a temporary storm that will soon pass. Instead of vaguely waiting for the calm seas of the past, only those who adapt to the completely changed new currents can survive.
Brilliant insight that pinpointed massive changes in the market. However, this price of reading billions of dollars in fire never becomes arrogant . He quietly bows his head, saying that there is still so much more he doesn't know . In the face of the market's massive flow, the glorious past is merely a record of yesterday .
Instead of blindly trusting his long experience, he always takes his next step carefully with the mindset of a beginner . The moment an investor becomes arrogant, believing they know everything, the market unfailingly punishes that arrogance. He realized this [musical] truth deeply through long experience .
That is why I always humble myself, quietly stop walking, and listen [to] the subtle sounds of the market. Stepping back from the noise of the bustling market, he occasionally walks alone on a quiet path. It is to quietly reflect on the truth that one's judgment can be wrong at any time . Ultimately, for him, humility is not a mere virtue.
It is the most powerful [musical] weapon for protecting capital in an unpredictable market, and essentially the true philosophy of a master that has permeated his entire life . The reason he [musically] humbles himself so thoroughly is clear. It is to become the last survivor who inevitably survives no matter what crisis strikes, rather than becoming a flashy hero boasting the highest returns .
Those who go on a reckless bet on Tammyo-chwi are the first to be swept away when the storm rages . However, only the survivors who silently protected their capital can greet the dazzling sun the next morning . You must resist the temptation to dance splendidly on the rough waves . Avoiding a single bankruptcy like a steadfast lighthouse.
That is the true victory he speaks of. If you endure without giving up in the midst of a fierce storm, time will eventually be on the side of the survivor . Because when the sea returns to calm, only the survivors can lead the intact boat further . Surviving is not just passive defense. is the surest and most powerful attack for enjoying the magic of compound interest for a long time.
This is the final lesson of Howard Marks, who became a legend precisely because he did not dream of being a hero . Wall Street, the street of greed where endless competition for returns takes place. The footprints he left here give a [musical] profound resonance. It went beyond mere wealth accumulation and became a great legacy that permeated the entire financial world.
It is not simply the technique of stacking fire that was passed down. He changed Wall Street's fundamental attitude toward risk. For countless junior investors, his philosophy became a compass for navigating the darkest times. On this street where dazzling success stories pour out, he quietly established the most solid standard.
His writings have established themselves as an unwavering principle in every meeting room wounded by countless financial institutions . In the ceaselessly spinning streets of greed, his philosophy cast a calm and heavy shadow . It is the discovery of the deepest and solidest wisdom in the most splendid center .
Trends change and market cycles repeat endlessly, but the wisdom he left behind will never lose its [musical] light . Humility, survival, and a deep insight into riskโthat is the greatest legacy Howard Marks left on this street. As Howard Marks' insight suggests, the market's massive pendulum will not stop in the future .
Even as countless years pass, it will ceaselessly oscillate between greed and fear [with music], creating a new cycle . When people reach one end, they always mistakenly believe that this time it will be different . You end up believing in eternal ascent or endless fall. However, the gravity of the market eventually pulls that pendulum to the other side.
The moment overheated optimism collapses, the pendulum plummets toward fear at an uncontrollable speed. It is like the coldest and most unpleasant hangover that follows the most glamorous party. When fear engulfs the market, people dump all their assets at rock-bottom prices as if the world were ending .
The very moment the pendulum strikes the edge of pessimism hard, the greatest opportunity that only a great investor can see through is born . Ultimately, there is no such thing as a perfect prediction in the face of the massive vibrations of the market. Simply humbly accepting the rhythm of the pendulum and silently surviving.
This is the solid wisdom Howard Marks left us. Then, how should we [musically] balance on this constantly swinging pendulum? The solid answer is hidden within the records that Fowd Marks dedicated his entire life to . The first step is to let go of impatience . Do not try to force tomorrow to fit in.
Instead, taking a step back and calmly reflecting on where we currently stand . If you have grasped where you are standing now, all that is needed is to endure the weight of time. Amidst the pages densely filled with records of the past, must lay down its own solid foundation . Just as clock hands turn silently, the market's time flows at its own pace.
that waits for the next cycle while quietly reflecting on wisdom rather than forcibly chasing opportunities . That calm patience is required. Ultimately, the success or failure of an investment does not lie in knowing the future . That profound humility of fully acknowledging one's own limitations. The deep and [musical] solid wisdom left by Powered Marks will become the most perfect compass to protect us in a turbulent market
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