Howard Marks: 80 years of investing wisdom in 46 minutes
If you wait until you have nothing to be afraid about, probably the opportunity has passed.
I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days off on the road. Let's travel.
Howard, it's good to see you again. We had a lot of fun last time and we were like, look, I don't know if other people are gonna like that, but we loved that. And then over a million people listened to the last one. And so this morning I was reading, you wrote this blog post about how you changed your mind about AI. You, you had written, I don't know, a couple months back about the possibility of an AI bubble. And then as a good thinker tends to do, you got new facts, you sort of reassessed the situation. You wrote a new post about AI. Do you wanna summarize the story of how you changed your mind on AI?
Well, the story's very simple. I have this son named Andrew. He's a VC. He's dealing with AI every day. His companies use AI, some of them create AI, et cetera. I had written the first memo around December 9th, as I recall. And then in early February he said, Dad, so much has happened, you have to update the memo. And so I rewrote the memo entirely.
You, I was re— I was rereading one of your old books and you repeat this phrase a bunch, which is like, it's important to be rational and you can't get seduced into thinking something is a good idea because that's when smart people can make bad decisions when you get emotional about something. But then when I was reading part 2, I was reading it and I was like, Howard, you sound a little seduced. You sound a little seduced. You sound like you're into this. Are you at all approaching this in an emotional way, you think?
It depends on your definition of emotional. I upgraded my opinion of AI and its potential because it's ability to talk about its own strengths and weaknesses, to use humor, to put information in the context of me, to use what it knows about me. And, you know, this is really exceptional stuff. There's a quality to AI, or more than one quality, which are unprecedented in my opinion. The first, the obvious one is autonomy. All the other technological innovations from the railroad to computers to the internet, et cetera, were all tools or things to speed up and increase productivity. There's never been anything with the quality of Autonomy. The idea that you can give it a job and not tell it how to do it and it'll figure it out is really unique. And what comes with that, of course, is this nagging concern that it may take over. So that's really important. The other thing, and this is not kind of quantifiable is there's never been anything, in my opinion, so unpredictable. I don't think anybody knows the shape of the future. So I have never had that sense before. I never thought that the internet, for example, was beyond comprehension or beyond prediction.
Do you think that AI will be able to do what you do. And I know you talk about this in the memo, and I got to be honest, when I read it, I, you know, I almost felt like, you know, you read stories about Warren Buffett reading the Moody's Manual page by page, 800 companies, and trying to digest that information. Well, AI can do that in a heartbeat, right? Like, you know, a lot of the things that, that go into making investment decisions, they can do very well, very fast. And then also it's advancing so fast. So, you know, whatever we thought it could do 3 years ago is laughable compared to what it can do today. And as you pointed out, even 3 months ago. So I guess in your heart of hearts, do you think, you know, in the future, the next Howard Marks is not a human, but maybe a human with AI or just AI?
Everything I say on this subject, I preface with, I'm no expert, but I think I told the story in the memo about the fact that indexation put a lot of people out of the equity business because it disclosed that they couldn't do what they claimed to do. And most active equity investors underperformed the averages. And AI will unfrock or defrock another group of people whose talents are not as great as as they purport. I used to say about computers, when I went to school and learned about computers, all they could do was read, remember, add, subtract, and compare. They could do it with a lot of data. They could do it really fast. They could do it without making arithmetic mistakes. They could do it without making emotional mistakes. So while the list was limited, it was still better than most people. Now, what's the list for AI? Is the list for AI unlimited or limited? That's a big part of the question right there. And I don't know the answer, and maybe you do. And then is there anything left that AI can't do? And one example is, I think we've helped our clients over the years by not investing with bad people. And sometimes you talk to people and for undefinable reasons, you just say, you know what? It doesn't feel right. As somebody said to me, the hair on your neck goes up. And if that's true, and if AI doesn't have hair on its neck, then maybe there's a role left for experienced investors with judgment. I believe so. First of all, there will always be things for which there is no history to train on. And to the extent that a certain big percentage of what AI does is knowing history and recognizing and extrapolating patterns, there will always be stuff for which there is no history. There are just some people who have a better understanding of the probability distribution that defines future events.
I was reading this book on Steve Cohen, and there was this part where they were describing how he was kind of like the man at a very young age. They were like, he can just feel the ticker. he just like is in tune and in flow with it. And I was like, ugh, that's beautiful. But like, that's, I can't replicate that. And I was always curious about that because I think in one of your books, I think you said something like, I can't make, I can make someone better, but I don't think I can make 'em great. Can you talk to that about like what it is that makes someone who is a good investor good, but also how the average person could get better? Like, or do you believe that's not, that's not even possible that you just, you have it or you don't?
Well, In my first book, The Most Important Thing, Columbia, which published the book, we were talking about the book. They said, well, write us a sample chapter. So I sat down and I wrote a chapter that I had never even thought about. And it turned out to be the first chapter in the book. And it says—
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The most important thing is second-level thinking. Second-level thinking basically says if you don't see anything different from everybody else, you can't possibly be superior. So to be superior, you have to at some point see something different from other people, what's called a variant perception, that you have to either think that the consensus of investors overstates the quality of the company, the growth rate of the company, the earning power of the company, or maybe the multiple it deserves. And you have to have this variant perception and you have to bet. On your perception and you have to be right. So that's second-level thinking. I say in the book, and when people ask me, I say, can you teach me to be a second-level thinker? And the answer is no. I say in the book, I don't know, but I think it's more no than yes because what I say is I can teach you the importance of being a second-level thinker like I just have in this chapter. But I can't tell you how to have perceptions that are at odds with the consensus of investors and correct. In basketball, there's a saying, you can't coach height. And I think there's something called insight, and I think some people have it. And I don't know if AI can have it because when, you know, when you talk about artificial general intelligence and AGI is when a computer or AI can do everything that a human can do. Can it do that? Don't know. And when I talk about the mysteries of AI, that's a big one of them. Are there things it won't be able to do even when it
Can you think back to some of the biggest calls that you've had? How strong did that feel? Did you still have doubt or was it 100% conviction? I'm curious to hear what it feels like.
Great. I think in our last episode we talked about the day Lehman went under, you know, September 15th, maybe of '08. And we had thought that there was gonna be a mess and we had raised In the distressed debt world, the biggest fund in history prior to '07 was our '02 fund, which was $2.5 billion. And in '07, '08, we raised $11 billion for a distressed debt fund because we thought that there was a lot of distress coming. And we had it on the shelf. It was for deployment when the stuff hit the fan and Lehman goes under, which I think qualifies as saying the stuff has hit the fan. But people are talking about the end of the world and all the financial institutions are going to melt down and everything having to do with money is going to atomize. So we were faced with the question, do you invest the money? And there's no pattern recognition for the end of the world. And there's no, you know, in the pandemic, a Harvard epidemiologist said, when we make decisions, we have data, analogies to past experience, and supposition. Well, at the time of the Lehman bankruptcy, we had no data and no prior experience. We only had supposition. So this is an interesting question. Can AI have engaged in this kind of thinking? And what we said is that if the financial world melts down and we invest, doesn't matter. But if we don't invest and the financial world doesn't melt down, then we didn't do our job. So we have to do it. And we invested on that basis. And Bruce, who runs those funds, invested an average of $450 million a week for 15 weeks, $7 billion in a quarter. On that, well, was it only on that? We also, on quantitative measures, assuming the world doesn't melt down, we were getting great bargains. We were buying the debt of companies where we would break even if companies that had been bought out by private equity guys, 2, 3, 4 years earlier, if they ended up being worth a fifth or a fourth of what they had paid, we would still be okay. So that was pretty easy quantitatively, but we were absolutely not confident.
You weren't confident?
No.
I thought you were going to say the opposite of that.
No, no. But I mean, we're the kind of people Who always say, I could be wrong, or it could work in a way that's never been seen before. And so we always, I wrote a memo 3 or 4 years ago called Taking the Temperature about the 5 major calls, macro calls that I made in the last, well, in the last 26 years. And they're all with some doubt. When the markets are crashing, why are they crashing? They're crashing because the news is terrible. I read the same newspapers, I watch the same shows on TV, I'm attached to the same news feeds. I see the terrible news. It looks terrible to me. I overcome it in some way. and conclude, no, I should invest, but I'm not immune to what everybody else is reading. If you do these things without any trepidation, maybe there's something wrong with you. But people who look at the world probabilistically and admit to ignorance and uncertainty, Can't act without trepidation.
Hey, can you tell me about raising $11 billion? Because you said that, like, very casually, like, so we raised an $11 billion fund. And that's like if I just said, hey, I just turned water into wine. I think for most people, I'm just actually curious, how does that happen? Is that, is that you go to people and you say, hey, we think the world's— you make a really persuasive case. Are you using a pitch deck? Is this just prior relationships? Are you selling upside? Are you selling safety against downside and fear? Like, what actually goes into raising $11 billion like that?
So there's a list of things. Number one, certainly prior experience, relationships. People have, you know, we started this business in 1988, and so we're talking about 20 years later. And in the 20 years, we managed a lot of money and had very good results for a lot of people. And so you can work on that reservoir of goodwill. Number 2, this strategy is particularly well-suited for crisis. And we had managed money through a few crises, 1991 and '01, '02, and done exceptionally well. So we were able to convince people that, number one, so many of your investments are set up for prosperity. This is a good way to hedge it by making an investment that will do particularly well if the stuff hits the fan. But we were also able to call attention to flaws in the environment. The things that gave rise to the global financial crisis, we could talk about and we could point out, And the fact that the market was not acting as a disciplinarian, which is its main job. Main job is to, you know, people come in and say, I want money for this, this, and this. And the market's job is to say, no, that doesn't make any sense. That's a stupid idea. We're not going to invest in that. That's the job. And sometimes the market doesn't do that job. And when the market doesn't do that job, then dumb ideas get financed. And when they turn out to be dumb, people lose money. So I think we were able to convince people that some dumb things were happening. And then of course, there's great respect for Bruce Karsh, for the investing he's done over the years. I think those are the main reasons why we were able to do it. And by the way, you hit the nail on the head. We did it in advance of the crisis. The best time to invest is in a crisis. You can't raise money during the crisis because the news is so terrible. So my wife and I have a favorite movie we watched called Spy Game with Robert Redford. And he says in the— Redford says, when did Noah build the ark? Before the flood. You got to build the ark before the flood. you have to have some sense that there may be a flood. But one other point, in the prior 20 years, there had been these occasions when we thought there was going to be a great investment opportunity, and we were generally right because we took the temperature of the market accurately and we raised a large fund and we invested in it and we made a lot of money. But then our next fund was smaller because we thought the opportunities weren't as good. Now, most people in the investment business, if they have a fund that does great, the next fund is bigger because they can sell on the back of those results. But we make it smaller because we think those results mean that things have appreciated and are not so attractive. And I think that having done that for 20 years, I think we gained a lot of credibility and people tend, I think people tend to say when Howard and Bruce say there's a great opportunity, they're not just trying to raise money, they really believe it. And they tend to be right. And sometimes you have to speak against your own interest and admit your limitations and admit your uncertainties. So in 19— '98, we had the meltdown of Long-Term Capital Management. We had a Russian ruble crisis. We had a panic in Southeast Asia. And especially with Long-Term going under, one of the skilled portfolio managers, young portfolio managers at Oaktree came to me. He says, I think this is it. I think we're melting down. It's all over. And I said, well, tell me your concerns. And he laid out his concerns. And I said, okay, I understand it. Now go back to your desk and do your job. You know, a battle hero is not somebody who's unafraid. It's somebody who's afraid but does it anyway. If you're running into a hail of bullets and you're not afraid, there's something wrong with you. But you do it anyway because it's what you have to do. And I don't want to elevate— I'm not saying we're analogous to a combat hero, but you have to do it despite your trepidation. And by the way, if you wait until you have nothing to be afraid about, probably the opportunity has passed.
That's a great point. You mentioned Bruce, and I wanted to ask you about this because it seems like you guys have had a very long-term partnership now. 30-plus years. I think people don't talk about that enough, the value of compounding in a relationship and how to be a good partner for the long term. You know, a bad partnership can ruin you. Yeah. But we don't really talk about what it takes to make a great partnership at the same time. If you were gonna teach me and Sam, if we said, hey, me and Sam wanna do this podcast for 30 years, or, you know, I have a business partner, Ben, I wanna be in business with him for 30 years, what do we gotta get right
Well, it's a great question, John. It's very important. Bruce and I have been partners for 39 years this month, and it's one of the greatest things in our lives. After, I think we would both say that after family and maybe some good friendships, it's really the best thing we've had. We've worked together closely for all that period. We've obviously produced a lot of success. Had a lot of fun, have never had a fight. We have intellectual disagreements, but we've never had a fight, probably because neither of us is really a financial maximizer. And a lot of fights are probably about money. The bedrock of our relationship is mutual respect. And I think it would be very hard to have a successful long-term relationship with a partner if you didn't have respect for each other. And that ties into something I wrote in '02, I think. But in '02, I wrote a memo called The Most Important Thing, and there was a section in there which talked about having a successful partnership. And I said, the key to a successful partnership is shared values, And complementary skills. If you don't share values, I don't think you can have a successful partnership. Let's say one person is super aggressive and the other is a chicken. One person is super ethical and the other one likes to cut corners. I don't think you can have a successful relationship, partnership. And I've seen many, many, I mean, a friend of mine when I was a kid, AT&T went public. Can you imagine the days before AT&T was public? But anyway, they went public. It was the biggest deal in history. And they had a full-page tombstone ad in the newspaper and it listed all the investment firms that were the investment bankers. And there were probably 40. And a friend of mine, Ed Ramsdell, used to carry that ad around. And every time one went out of business, he would market off. And eventually I think they almost all disappeared except for Goldman Sachs. But why do they go under? You have some cowboys and some chickens. And in bad times, the chickens say, the cowboys are getting us killed. And in good times, the cowboys say, the chickens are holding us back. And they disparage each other. So you have to share values, in my opinion. The other thing is you have to have complementary skills. So the beauty of a partnership is when your partner can do things you can't. That means that you are both additive to each other, synergistic. If I can do everything you can do, or if I think that, what do I need you for? It's not going to last very long because eventually I'm going to say you're overpaid. I don't need you. And the beauty of my relationship with Bruce is that we both recognize that there are things that the other is good at that we are not, and that the other wants to, is willing to do that we don't want to do. For example, from the very beginning, Bruce approached me in '87 with the idea of a distressed debt fund. I went into the high-yield bond business in '78 and He had a background in law and got into some distressed investments, which went well. And he said, came to me, he said, we should do a distressed debt fund. And it was quite a novel idea. But from the beginning, you know, I go on the road and talk to people and Bruce stays back and manages the money. I go on podcasts with people like you. And Bruce doesn't. But the third element is you gotta be appreciative and you have to thank your lucky stars that you have a partner who will do the stuff you don't want to do.
Can you do the same towards parenting? Because both on this episode and last one, you referenced your son a bunch. Do you have any insights into how you've been able to raise a kid that you not just love, but you enjoy being around?
Well, you know, I think it was Forbes 30 or 40 years ago had an article about so-and-so who was the only shrink with an office on Wall Street. And they asked this guy about his patients' problems, and he said that his patients' problems, and they were all men, of course, because it was Wall Street a long time ago, his patients' problems were inversely proportional to the support they got from their fathers. We had people over for dinner last night and one of the guys, and we were talking about so-and-so who was a character of some kind. And one of the guys said, well, you know what? His father treated him like hell. I just never wanted to be that father. And it's amazing how many men, and especially so successful men, have to assert their superiority over their sons, maybe daughters too, but I think it's more with sons. And I guess it's Freudian or something else, but what a terrible thing that you have to— if you have this kid and you have to prove you're smarter. And so, I mean, I always let Andrew be smarter than me in some things. And of course, I always gave him full support in the things he wanted to do. If your kids want to do something and A, it's not going to be injurious, and yeah, maybe there's no B, let them do it. Like when my daughter was getting out of lower school and had to choose an upper school, she applied to the 2 good schools in LA, got in, And we'd let her choose. My wife and I had a sense for which one we wanted her to go to, but we concluded that, like I always say, we could be wrong. Her choice could be the wrong choice. And anyway, of the 2 choices, while one might be better than the other, neither was a bad choice. So if that's true, let the kid make the choice and they get experience with making choices. And maybe they get experience with making incorrect choices, which is very important.
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First, I wanna say upfront, Ken, that the thing you describe, I did a terrible job of. I was unconscious. The decisions I made in my first 20 years. As they say in religion, I did not apply intention. I just, I let other people make the decision. I made decisions haphazardly. I didn't think about it a lot. I'm embarrassed at how terrible my decision-making process was. In fact, it's a misnomer to apply that term. But having said that, I think it's desirable to make your choices with intention, well-reasoned, et cetera. And what I tell kids is my favorite quote is from a writer named Christopher Morley who said, there's only one success, to live your life your own way. I think it's a beautiful quote. I go to Wharton and Harvard and all these places and Columbia. And I say, and the fact that you're in this room probably means that you can live your life your own way. You probably have what it takes to live your life your own way, intellectually and work ethic and so forth. But you have to figure out what it is. That's the hard part. Who are you? And what I say to them is, Try to find something that will play to your strengths, avoid your weaknesses, and make you happy. What that means is, well, that sounds obvious. Well, who the hell wouldn't follow that instruction? Well, the answer is, what it means is you can't let your friends decide what you should do. You can't do things because your friends are doing them. You can't let society decide what you should do. You can't let your parents decide what you should do. You have to think it out for yourself. Having said that, it's very difficult because it's hard to know yourself. And we know that in 20 years you'll be a different person. How can you make a decision today on what will make that person happy? Very difficult, but you got to try. That's my advice, which I didn't take when I was a kid and I was derelict, but I got lucky.
Well, you eventually did become, as you described, living well-intentioned.
Yes.
Something must have changed. Do you remember, did you do any exercises to become that way?
Not that I recall. I think part of it, and I said for the next 25 years I didn't do it. That took me up till Roughly '95, which is when I left with Bruce to start Oaktree. That was really—
That's so interesting. Wait, so you think that up until the age of 50 or 49, you were floating or living according to other people?
Well, not, not just that, but just not making good decisions, conscious decisions. You know, why did I go to Citibank Investment Research Department when I got outta the University of Chicago in 1969? Because I had a good summer there the year before. Why did I move from the equity research department to the bond department? Because my work in equity research was unsuccessful and I was told to get out. Why did I move to California in 1980? Sunshine, palm trees. I just can't claim that I was making good decisions. I got sent to the bond department at Citibank in 1978, and 3 months later, the head of the bond department calls me up since I didn't have that much to do. I was fairly idle. And he says, there's a guy named Milken or something in California, and he deals in something called high-yield bonds. Do you think you can figure out what that means? That was just luck. If you read Malcolm Gladwell and Outliers, it was just luck. Right time, right place. And if that call came at lunchtime and I had been out at lunch, maybe somebody else would get the call and they'd be me.
Your humility is very striking to me. We have a lot of people on this podcast that I think claim to be humble or try to be humble. You really are an extremely humble person. I mean, one note I wrote down is, From now on, at the top of all my investor memos, I'm just gonna start it with, I could be wrong, but... Because I think whenever I make an investment, I'm so boastful about my excitement and my exuberance and why this is right and why it's the right move to do. And I think, you know, you've kind of infected me with a little bit of your humility there.
Well, you make the investment because you believe in it, but it's important to see the other side. And know what you're doing. By the way, Churchill said he's a humble man and he has a lot to be humble about. But Mark Twain says, it ain't what you don't know that gets you into trouble. It's what you know for certain that just ain't true. And I always tell people, in line with what you just said, Jon, no sentence that starts with, I could be wrong, but, or, I don't know, but, ever got anybody into trouble. The sentences that get people into trouble are, I'm 100% convinced that... And if you really feel that you're 100% right and you bet like you're 100% right, and it turns out it was only 80/20 and the 20 comes up, that's how you get into big trouble. So I think the thing that Mark Twain said was incredibly important.
Yeah. Last memo Sean sent me about some deal he had was, bet everything you have. This is it. Yeah.
Mortgage the house. Hey, can I ask you about Buffett? You know, Buffett famously has said, you know, he reads your memos. I assume you guys have interacted. Do you guys hang out? What's, what's he like? You know, gimme some, some Warren Buffett stories from, from your, your life, your experience.
Well, Bruce actually was always a Buffett watcher. And if you go back to the '80s, no, I don't think anybody had heard of Buffett. Maybe not the '90s. I don't remember exactly. In the late '90s, people said, well, Buffett's lost it because he's not in tech. And then of course tech blew up and then they said, ah, maybe Buffett knows what he's doing. But anyway, when Enron melted down, Enron did most of its misbehavior through off-balance sheet entities. And there was a lot of opportunity there. And so we became the largest holder of the debt of one of them. It was called Osprey, and Warren was the second largest holder. And I don't remember how it came to pass, but he gave us his proxy. And he let us run that position for him. And Bruce did a masterful job of restructuring that company, and we came out with a big win. So this was around '02. So around '03 or '04, Warren writes Bruce a letter and he says, nice job on Osprey. And if you ever find yourself in Omaha, let me know. we'll have lunch. So Bruce and I write him a letter, or Bruce writes him a letter, says, it happens that Howard and I will be in Omaha this week. Can we take you to lunch? And so that's how we met. And the relationship had a lovely start and it went on like that. We never actually did any business together after that because he was always looking for something big that he could acquire. And we don't really deal in big acquirable things, but it was a very nice personal relationship. And I've never said this to anybody else before, but in '09, I wrote a memo in which I mentioned him and I sent it to him and I said, I want to make sure that you see this memo because it mentions you. And he says, I do see the memos and blah, blah, blah. And I have seen this. He says, and by the way, you should write a book. And if you do, I'll give you a blurb for the book. And that's why I wrote the first book, Most Important Thing. I always thought I'd write a book when I retired, but instead, when you get that kind of note from a guy like Warren Buffett, you can't let it sit. So that was the start of that. But I've been fortunate to visit him. A few times and it's a big plus.
Is there any part about the Warren mystique, the Buffett personality that you think like popular lore gets wrong or is inaccurate?
No, I think it's mostly what you see is what you get. The one thing I'll say that I don't think people know about, they don't get wrong, they don't know about, is the depth of his love for Charlie. And Warren sent out a note, I think it was at Thanksgiving last year, and he said, I'm not going to be at the Berkshire meeting and I'm not going to be writing this or that, whatever it was. And he talked about his relationship with Charlie and anybody who wants to should get ahold of that letter and see it because it's, you know, we talked earlier about the importance of the a partnership and how great a contributor to your life it can be. And that's what he had with Charlie. I think he, as I recall, he talked about Charlie being the big brother and himself being the little brother. And I think we can say that about my relationship with Bruce. And for one reason or another, he's always been very kind to me about my role and generous about my role. And he's certainly as smart as I am and as talented as I am, maybe in different ways, but there was always this feeling of respect. And affection and love. And as the more time passes, the more we're conscious of that, he and I. And that's what Warren and Charlie had. And it was a beautiful thing to watch. And also, Warren used to love telling funny stories about Charlie, of which there were a lot. And their relationship was always suffused with humor.
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Did they make a lot of the decisions together? I mean, I've read a little bit about 'em and their relationship was a little challenging for me to understand because I don't think they've ever lived in the same place.
Yeah.
Did they talk daily?
I don't know exactly how they made their decisions, but I think Warren used Charlie as a sounding board, a logic checker. You know, I think this, do you think this makes sense? That kind of thing. Of course, Charlie's great credit is that Warren Buffett used to engage in what we call cigar butt investing. I don't know if you know about this, but cigar butt investing means you're walking down the street and you look in the gutter and you see a used cigar and you pick it up and you conclude that it has 3 puffs left. So you pick it up. It's a disgusting thought. You pick it up and you smoke it. and you get 3 puffs for free. That's cigar butt investing. But, and Warren would buy really cats and dogs because they were cheap. And Charlie's great contribution was talking Warren out of cats and dogs, out of cigar butts. And his revolution was that he convinced Warren not any company at a great price, great companies at a good price. Most people credit that as Charlie's greatest contribution. But synergistic, mutual respect, love, complementary skills. Interestingly, they probably had the highest combined IQ of any partnership in history, but they were different kinds of IQ. Charlie was more of a classicist and humanist and a man of letters. And Warren, of course, was an incredible computing machine.
A man of letters, Sean. We need to bring that back. That sounds beautiful. I want to be a man of letters.
Charlie, when we would get together, he wouldn't talk about investments or money. or companies mostly. He would talk about ideas.
Well, let's wrap it with one last quick one, which is give us some homework. Give us a book that shaped the way you think or you thought brought some good ideas to the forefront. What's a book we should read as recommended by Howard Marks?
So one is A Short History of Financial Euphoria by John Kenneth Galbraith. This was very influential in my thinking, and it teaches you about the mental weakness that gives rise to booms and busts. And of course, taking an objective view of cycles is a big part of what I do. So that was very influential, and I was lucky to get to meet Galbraith. And then The other book would be Fooled by Randomness by Nassim Nicholas Taleb. And it talks about, see, I'm a great believer that a lot in life is random. And so this is one of the reasons, maybe it's my rationale for not being such a decisive thinker. Taleb basically says in the short run, anything can happen. because of randomness. And this determines our attitude toward risk, our attitude toward portfolio construction, our attitude toward published records. You see a published record, the guy had a great return that year. Is he a great investor? Did he get lucky that year, et cetera? And so I think that fooled by randomness is really, and I've written some memos if anybody wants to the, what we used to call the classic comic version. They can read the memos rather than reading the whole book. But I think it's very valuable and I would recommend it strongly.
Well, we appreciate you, man. This is fun.
I hope so.
We gotta do one with your son, actually. That would be a lot of fun.
Well, we did one in January of '21 called Something of Value because He moved in with us during the pandemic, and I thought that the opportunity for 3 generations of Markses to live together was of great value. And we spent most of the time arguing about value investing. And I think with the possible exception of the latest AI memo, I think that one got the most positive reception. But we'll keep working together. And you guys don't need an excuse for another session. Thanks.
Well, thank you for playing therapist for us.
Okay.
Thank you so much, Howard.
That's it. That's the pod.
I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel, never looking back.
All right, let's take a quick break to talk about a podcast. Because if you're listening to this, you like podcasts. And what's better than one podcast? Another podcast, and let me tell you another podcast you should check out. It's called Success Story. If you like hearing about different success stories and hearing Q&A sessions with successful business leaders, or hearing keynote presentations, or just checking out conversations about sales and business and marketing tactics, this is a great podcast for you. So check it out wherever you get your podcasts.