Howard Marks says he drifted until 50 and found his career by luck
An idle afternoon, a boss with a question, and perfect timing put him on the path he is known for.
My First Million · If I was 21 again, this is what I’d do different - Howard MarksIn 1978, Howard Marks did not have much to do. He had been moved to the bond unit at Citibank three months earlier, and he was fairly idle when the head of the department called him up.
The department head asked, as Marks recalled it: "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?"
Milken was Michael Milken, a California financier who pioneered the market for high yield bonds. Those bonds are loans to companies with lower credit ratings, which pay higher interest to make up for the higher risk and were once called junk bonds.
Marks, the investor who later left with longtime partner Bruce Karsh to start Oaktree, says that phone call made his career. It was not planning or foresight. It was pure luck.
He describes his first 20 years of decisions as unconscious. He did not apply intention, he let other people make decisions for him, and he made choices haphazardly. He says he is embarrassed at how terrible his decision making was, and that it is a misnomer to even call it a process.
The examples he gives are blunt. He joined the investment research department after college in 1969 because, in Marks's words, he had "a good summer there the year before." He flopped in stock research and his bosses shifted him out of the group. He moved to California in 1980 for sunshine and palm trees. He dates his shift to intentional choice to roughly 1995, when he was about 49 and left to start Oaktree.
That is why he puts the Milken call down to timing. He cites Malcolm Gladwell, the author of Outliers, and the idea of being in the right place at the right time. "If that call came at lunchtime and I had been out at lunch, maybe somebody else would get the call," he says. "And they'd be me."
What he tells young people now is the opposite of how he started. Quoting the writer Christopher Morley, he says "there is only one success to live your life your own way." In his own advice to students, that means trying to "find something that will play to your strengths, avoid your weaknesses, and make you happy," without letting friends, society, or parents decide for you.
Questions people ask
Who is Bruce Karsh?
Bruce Karsh is the investor who co-founded Oaktree Capital Management with Howard Marks in 1995. He built his reputation managing distressed debt and value investments, and ran much of the firm's investing while Marks focused on clients and writing. The two worked together for nearly four decades.
What is the luck argument in Outliers?
Outliers is a 2008 book by Malcolm Gladwell arguing that extraordinary success owes much to timing, place, and opportunity, not talent and effort alone. Its famous examples include birth dates that helped young hockey players and early access to computers for future tech founders. Marks cites it to describe getting the high yield assignment by being in the right seat.
What is Oaktree, the firm Marks started?
Oaktree Capital Management is an investment firm co-founded in Los Angeles in 1995 by Marks, Bruce Karsh, and others. It specializes in credit and distressed debt, meaning buying the debt of troubled companies at discounts. It grew into one of the largest distressed investors in the world and is now majority owned by Brookfield Asset Management.