Investing

Howard Marks Reading List: Book Recommendations From the Co-Founder of Oaktree Capital

Howard Marks Book List
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Howard Marks is one of America’s most successful investors, with a net worth of more than $2 billion according to Forbes.

As founder of Oaktree Capital Management, Marks specializes in high-yield and distressed debt, and his fund raised nearly $11 billion to buy troubled assets in the aftermath of the financial crisis in 2008. 

Born in New York, Marks graduated from the Wharton School at the University of Pennsylvania in 1967. After graduating from the University of Chicago Booth School of Business, he began his career as an equity analyst at Citibank, but later transitioned to debt markets as high yield bonds became popular in the late 1970s. 

Despite Oaktree being purchased by Brookfield Asset Management in 2018, Marks still controls 38% of the company and handles the firm’s operations.

Given his tremendous success, people often ask what books he’s reading and what books he recommends for those interested in learning more about markets and sharpening their investing skills. 

We’ve scoured his past interviews, shareholder letters and more to compile what we believe is the most complete list of Howard Marks book recommendations on the web. If you know of one we missed, be sure to leave a comment below so that we can add it to this article. 

Books Recommended by Howard Marks

When Marks speaks, the investment world listens. Warren Buffett says Marks’ famous shareholder memos are the first thing he opens when he sees one in his mailbox, and many investors happily follow suit.

Marks is a prolific reader and his lists of favorite books and newsletters are often distributed to Oaktree clients and prospective investors. 

Here are a few of Marks’ favorite reads, listed in chronological order based on their date of first publication.

#1. The Loser’s Game

Author: Charles D. Ellis
First published: 1975

The Loser’s Game is an essay written by Charles Ellis (the founder of Greenwich Associates) that was published in the August 1975 issue of The Financial Analyst’s Journal.

In the essay, Ellis compares investing to a game of tennis, arguing that unlike in football or basketball — where the goal is to dominate your opponent and impose your will — successful investing (like tennis) is about limiting your mistakes while taking advantage of your opponents’ errors.

In 1998, Ellis published the book Winning the Loser’s Game: Timeless Strategies for Successful Investing, which expands on many of the ideas introduced in the essay. 

It was in 2005 that Marks referenced Ellis’ work in a talk to the Journal of Investment Consulting’s editorial advisory board, where he said:

My philosophy of investing was built primarily on experiences but also on things I read: John Kenneth Galbraith’s ideas about cycles, the importance of contrarianism and being a countercyclical, and the importance of not being a forecaster, and Charlie Ellis’s article on “The Loser’s Game” — the desirability of just keeping the ball in play rather than trying to hit home runs. Concepts like these were very important to me.

#2. A Short History of Financial Euphoria

Author: John Kenneth Galbraith
First published: 1990

John Kenneth Galbraith - A Short History of Financial Euphoria

Financial bubbles are as old as investing itself.

In his 1990 book titled A Short History of Financial Euphoria, Canadian economist John Kenneth Galbraith discusses many of these world’s most famous financial bubbles, from the Tulip Mania of the 1630s to the South Sea Bubble of the 1720s to the US housing bubble in the 2000s. 

History may not repeat, but Gaibraith argues it does whistle a familiar tune as financial bubbles all share a some common characteristics. 

The book was written in French and originally titled Brève histoire de l’euphorie financière

Marks discussed his thoughts about the book in an appearance on Barry Ritholtz’s Masters in Business Podcast, as well as in a more recent appearance on the Tim Ferriss Show, where he said:

There’s a little book by John Kenneth Galbraith called The Short History of Financial Euphoria that has a great quote. He said, “We have two kinds of forecasters: The ones who don’t know and the ones who don’t know they don’t know.” That has been very inspirational for me.

#3. The Warren Buffett Way

Author: Robert G. Hagstrom
Subtitle: Investment Strategies of the World’s Greatest Investor
First published: 1994

Robert Hagstrom - The Warren Buffett Way

Warren Buffett and Howard Marks share many investment ideals, but value investing has always been the modus operandi for the Oracle of Omaha.

In Robert Hagstrom’s 1995 biography The Warren Buffett Way, readers learn not just about Warren Buffett’s life and upbringing, but also about his approach to finding great investments. 

Some of the key features of value investing — like intrinsic value, quality management and fundamentals — are discussed in this book, which features a foreword from Marks in the Third Edition (published in 2013).

Related: The Warren Buffett Reading List – 15 Investing Books Recommended by the Oracle of Omaha.

#4. Against The Gods

Author: Peter L. Bernstein
Subtitle: The Remarkable Story of Risk
First published: 1996

Peter Bernstein - Against The Gods

If numbers are your thing, you’ll enjoy Peter Bersteins’s Against The Gods, which discusses the formation of risk management and how the science of probability shapes the directives of risk asset managers. 

Probability science is the foundation of many of our most prominent industries, such as insurance and capital management.

Marks has mentioned many of Berstein’s works in the past, but Against The Gods remains one of his top choices. 

#5. Fooled By Randomness

Author: Nassim Taleb
Subtitle: The Hidden Role of Chance in Life and in the Markets
First published: 2001

Nassim Taleb may be the owner of one of the most cantankerous accounts on Twitter, but his mathematical brilliance has long been on display in his writing. 

Taleb has written several books about how luck and randomness affect our lives, but Marks suggests that Fooled By Randomness is the best starting point for his work. 

In it, Taleb argues that the human brain is conditioned to look for patterns, whether they exist in reality or not.

We don’t like to view the world as a random set of occurrences because it forces us to realize how little control we have over outside forces. 

If you’re looking for a book to help you explain why a quarter coming up heads nine times in a row is the very definition of randomness, this is it.

Related: The Nassim Taleb Reading List.

#6. Bringing Down The House

Author: Ben Mezrich
Subtitle: The Inside Story of Six MIT Students Who Took Vegas for Millions
First published: 2002

Ben Mezrich - Bringing Down the House

Have you ever dreamt of getting rich at the blackjack table? Of course you have.

In this book, author Ben Mezrich describes the (somewhat) real-life tale of the MIT blackjack team, which successfully used high-level math and card counting strategies to win big at casinos all along the Las Vegas Strip. 

While not a true investing book per se, Bringing Down The House is an entertaining read full of larger than life characters (some of whom may have been exaggerated for creative purposes).

#7. Principles

Author: Ray Dalio
First published: 2017

Ray Dalio - Principles

Every person is guided by a set of principles, whether they understand them or not.

Ray Dalio, the CEO of Bridgewater Associates, discusses the importance of having a personal moral code in his 2017 work Principles. 

Dalio breaks the book down into three sections: the first is about principles in general and their importance in life, the second is about the principles he applies to his own life, and the third is about the principles used and learned from his time at Bridgewater. 

Dalio doesn’t tell readers what to think, but gives them a framework on how to think. 

In an interview, Marks said, “I think the guiding quote of the book is [one] from Mark Twain, ‘History does not repeat, but it does rhyme’.”

#8. Factfulness

Author: Hans Rosling, Ola Rosling and Anna Rosling Rönnlund
Subtitle: Ten Reasons We’re Wrong About the World — and Why Things Are Better Than You Think
First published: 2018

Hans Rosling - Factfulness

Is the world more dangerous and less healthy than ever? Many pundits and citizens would argue this is true, but statistician Hans Rosling demonstrates that it simply isn’t the case

For example, despite poverty and violence being near historic lows, many people believe the poor have never been poorer and the world has never been more violent. 

Rosling takes an optimistic look at the future, which is a sorely needed viewpoint considering the current environment. 

In an interview, Marks said the book “unmasks a lot of misperceptions that people have about the state of the world.”

#9. Thinking In Bets

Author: Annie Duke
Subtitle: Making Smarter Decisions When You Don’t Have All The Facts
First published: 2018

Annie Duke - Thinking in Bets

Annie Duke is a professional poker player, and few people know more about making decisions with incomplete information than card players. 

The book opens with a popular example: How could Seattle Seahawks coach Pete Carroll possibly have called a passing play at the goal line during the Super Bowl with stud running back Marshawn Lynch on the field? 

In Thinking In Bets, Duke cautions against “resulting” — judging decisions after the fact instead of before, when we had incomplete data. 

Many of the ideas poker players hold dear can be applied to the investing world as well, which is why Marks lists this as one of his favorite books. 

“The insights Duke offers in this book are incredibly helpful when we contemplate decisions in the face of multiple possible outcomes,” he said in a blurb for the back cover. “And that renders her book enormously applicable to the world of investing.”

Learn More: If you’re interested in learning how to make better decisions, read what Berkshire Hathaway’s Charlie Munger has to say about using mental models to process information.

Books Written by Howard Marks

In addition to being a prolific investor and passionate reader, Marks is a well-known author in his own right.

Marks has written three books since 2011, but his Oaktree Capital memos immediately bring investors of all shapes, sizes, and success levels together.

No matter what your opinion on the markets is, Marks’ writings are terrific learning tools for any prospective investor.

The Most Important Thing

Subtitle: Uncommon Sense for the Thoughtful Investor
First published: 2011

Howard Marks - The Most Important Thing

Marks’ first book remains his most widely quoted and circulated.

In The Most Important Thing, he uses career anecdotes and previous memos to explain his thoughts on risk, markets and capital. 

So what is the most important thing?

According to Marks, there are several — and each investor must follow several different trains of thought in order to arrive at the best decision in any particular case. 

Mastering The Market Cycle

Subtitle: Getting the Odds on Your Side
First Published: 2018

Howard Marks - Mastering the Market Cycle

Marks’ most recent book is a New York Times best seller about business cycles and how investors can harness emotions like fear and greed in order to inform their investment philosophy. 

Filled with memorable memos and timeless examples, Mastering The Market Cycle is a great look at how human psychology affects markets — and why investors often fail to notice changing trends in the business cycle. 

Emotions often get the best of us when it comes to financial decision making. Here, Marks provides a roadmap for avoiding common pitfalls as market cycles change.

The Oaktree Memos

First published: Ongoing series

Finally, the Oaktree memos themselves. Marks frequently provides commentary to Oaktree Capital clients, and all of his memos are available online

In the memos, Marks comments on a wide range of issues ranging from mundane topics like his amateur card games in college to more prescient ones like police brutality in the aftermath of George Floyd’s death and investment lessons for the coronavirus pandemic. 

Editor’s Note

A word of caution: Some of the Howard Marks book lists found online attribute recommendations like Zero To One by Peter Thiel and Blake Masters, The Lean Startup by Eric Ries, and The Innovator’s Dilemma by Clayton Christensen to the investor Howard Marks.

However, those books were never recommended by the Howard Marks of Oaktree Capital. Instead, they were recommended by a different Howard Marks — one who has done some impressive work in the startup space.

Summary

Reading is one of the fastest, cheapest and most effective ways to level up your investing knowledge and skill, and finishing even a couple of the books on this list will put you far ahead of the average investor. 

If you’re interested in learning what some of the world’s other top investors think you should read, check out the following articles:

And if you’re new to investing and looking for guidance, read this post to learn how you can get started with as little as $50.

 
R.J. Weiss
R.J. Weiss is the founder and editor of The Ways To Wealth, a Certified Financial Planner™, husband and father of three. He's spent the last 10+ years writing about personal finance and has been featured in Forbes, Bloomberg, MSN Money, and other publications.

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