Howard Marks (@howardmarksbook) is co-chairman and co-founder of Oaktree Capital Management, a leading investment firm with more than $120 billion in assets. He is the author of the new book Mastering the Market Cycle: Getting the Odds on Your Side, and his previous book on investing, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, was a critically acclaimed bestseller. Warren Buffett has written of Howard Marks: “When I see memos from Howard Marks in my mail, they’re the first thing I open and read. I always learn something.” Marks holds a B.S.Ec. degree from the Wharton School of the University of Pennsylvania with a major in finance and an M.B.A. in accounting and marketing from the University of Chicago. In this conversation, we discuss: Intro [00:00] An A.E. Housman poem. [05:49] What is mujō, and how did it become a part of Howard’s life philosophy? [06:53] You can’t predict, but you can... [09:22] Preparing for 2008’s bubble to burst and convincing investors to take the long view [11:09] Getting the odds on your side and turning 20 years of memos into a book [14:40] Cautious vs. aggressive investing—is either better? [18:13] Can one develop stoic resilience in the face of a mercilessly fluctuating market? [23:06] A 31-year partnership with Bruce Karsh and what each brings to the table [24:35] Is there a secret formula to getting along with business partners through emotionally trying times? [33:03] How might someone vet a potential partner as a good fit? [34:56] Having an opinion isn't enough. [37:37] The two kinds of people who lose a lot of money [42:36] Recommended reading [43:23] Can dumb money become smart money? [47:08] On maintaining and restoring a calm life [49:02] All knowledge is incomplete. [50:35] The case against stop-loss orders and other templated approaches to investment [52:50] What is superior judgment? [54:27] The one simple question Howard would ask of each investment under consideration [57:44] It’s not what you buy; it’s what you pay. [58:17] Expressions too absolute to be useful [1:01:31] How does Howard check the market’s temperature? [1:02:27] The three stages of the bull market (and, conversely, the bear market). [1:05:27] Hope and worry about today's economy [1:07:17] Why it’s important for people to invest only at a level that makes them comfortable [1:12:20] The twin risks of investing and the case for finding a comfortable middle [1:16:26] Where Howard disagrees with Warren Buffett’s style and strategies [1:18:08] Do the games people play accurately determine their risk tolerance for investing? [1:22:57] Investment misconceptions that prevail and what a lot of otherwise smart people miss about the nature of cycles [1:26:21] Lessons Howard learned from financial historian Peter Bernstein [1:31:21] Newsletters, columnists, economists, or writers Howard is excited to read these days [1:35:19] The book Howard is reading now and recommends [1:38:15] What is Howard’s take on cryptocurrency, and how do we measure its intrinsic value? [1:40:46] Growth or venture investors Howard admires [1:45:33] Mental models or heuristics that Howard has used as an investor that are particularly valuable across the board in life [1:49:11] Final thoughts [1:51:26] SUBSCRIBE: http://bit.ly/1dSzTkW About Tim Ferriss: Tim Ferriss is one of Fast Company’s “Most Innovative Business People” and an early-stage tech investor/advisor in Uber, Facebook, Twitter, Shopify, Duolingo, Alibaba, and 50+ other companies. He is also the author of five #1 New York Times and Wall Street Journal bestsellers: The 4-Hour Workweek, The 4-Hour Body, The 4-Hour Chef, Tools of Titans and Tribe of Mentors. The Observer and other media have named him “the Oprah of audio” due to the influence of his podcast, The Tim Ferriss Show, which has exceeded 200 million downloads and been selected for “Best of iTunes” three years running. Connect with Tim Ferriss: Visit the Tim Ferriss PODCAST: https://bit.ly/2rYjUBr Visit the Tim Ferriss BLOG: http://bit.ly/17jDHw3 Like Tim Ferriss on FACEBOOK: http://on.fb.me/1avYUxq Follow Tim Ferriss on TWITTER: http://bit.ly/17d94TE Follow Tim Ferriss on INSTAGRAM: http://bit.ly/2IfH37J