The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 24 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 1 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Howard Marks: SEC doesn't scrutinize private credit valuations and LPs prefer it
“And by the way, the SEC doesn't look at these things, because these are private investments, so they don't require accuracy. And the investors in the fund are mostly happy without accuracy, because as I said, they don't have to report problems to their higher …”
Marks: Private credit is no longer special and is now fairly priced
“And I would say that the aspect of being undiscovered and unloved is over. It's a reasonable thing to do if you do it carefully, but I don't think it's a special strategy. It's just fairly priced.”
Marks: Private credit draws down less because valuations ignore market psychology
“Private credit and other private assets do not mark to market in the sense of reflecting the swings of psychology. When you go through a tough period and high yield bonds are down 10% and private credits down two percent, I think that's the explanation.”
Howard Marks: Private credit managers like avoiding mark-to-market accounting during downturns
“The people who run these funds Pretty much like the fact that they don't mark the market, because then in the bad times when the headlines in the papers are so negative, they don't have to go to the treasurer of the organization and say, we're down 10%. They c…”
Marks: Leveraged buyout math breaks down when borrowing costs hit 10%
“In the 20 teens, you could borrow money at six percent to do private equity deals. Now you have to pay it probably a nine to 10. Well, if you're going to buy a company and make 10 or 11% a year, you have to pay nine to 10% for the money, then a leveraged acqui…”
Marks: The post-2022 higher interest rate regime is structural and long-lasting
“I wrote a memo in December, 22, called The Sea Change, and it talked about the change in the interest rate climate, which I think is structural and long-lasting.”
Marks: No Asset Is Too Good to Overprice or Too Bad to Buy Cheap
“As time passed, I rounded that into a belief that there is no asset so good that it can't become overpriced and dangerous, and very few assets which are so bad that if it's cheap enough, it can't be a good idea.”
Marks: LBOs rebranded to private equity due to poor past results
“The leveraged buyout business actually had to reinvent itself, and you don't hear the term LBO business anymore. Now you hear private equity. Well, why did they change the name? Because nobody would do it if you called it leveraged buyouts because the results …”
Marks: Hedge funds stopped performing once they grew too large
“So you had the growth of the alternative investment business, and they tried hedge funds, but when the hedge funds got too big, they stopped performing, most of them, and then people fastened on private equity.”
Marks: In fixed income, avoiding losers makes winners take care of themselves
“If we avoid the losers, the winners take care of themselves. That's our official motto. And that's the right way to think about fixed income.”
Marks: Private equity funds hold roughly $3T in unsold portfolio companies
“And by the way, the private equity funds, I think they're sitting on about three trillion dollars worth of companies that they have to sell. To pay off the investors.”
Marks: Nifty 50 Equities Lost 95% Over Five Years After September 1969
“If you held the stocks for five years from the day I got there, you lost about 95% of your money in great companies.”
Marks: When neglected assets become popular, opportunity vanishes and risk remains
“As I say, if you do things nobody else wants to do, you can usually get a good deal. But then eventually other people figure out that it's a good idea. They flock in. It becomes more popular. And then of course, like everything, it gets overdone. Then the oppo…”
Marks: Lower Underwriting Standards Allow Competitors to Outbid Disciplined Investors
“That still presents a big problem because if you want to apply high standards and somebody else has lower standards, then they can bid more for a given deal.”
Marks: Current credit markets are slightly loose but not dangerously compromised
“So it's on today, but I don't think it's terrible today. It's just, the markets are a little bit generous today.”
Marks: Daily stock price swings reflect trader psychology, not intrinsic value
“Look at stock prices up and down one or two percent every day. That accurately tells you what some manic depressive is willing to trade at, but it doesn't accurately tell you what the company is worth.”
Marks: PE amassed $2.5T in dry powder and most remains uninvested
“The money gushed into private equity, and they got up to two and a half trillion or so of what we call dry powder, money waiting to get invested, and I think most of that is still dry, if I'm not mistaken.”
Marks: Public markets grade companies daily without understanding them
“We were semi-public from O seven to 12, and then public from 12 to 19, and people would say, how is that? I'd say, well, it's fine, except that every day you get a report card from somebody who doesn't know your business that well, called the market.”
Marks: Oaktree memos require differentiated viewpoints rather than consensus commentary
“The basic Thing is, I have to think I have something to write, which not everybody else has been writing or talking about, or I have to see something differently from everybody else. The last thing I want to do is put out a memo that says, me too.”
Marks: Private credit grew over 6x to $1.5T since 2007
“The banks were chastened, lost some of their capital, were more tightly regulated, We're discouraged from risk taking, and that led in 2011 or 12 to the creation of the private credit market, which is now over a trillion and a half. In oh seven, I think it was…”
Howard Marks: Private credit offers no liquidity once an investment is made
“If you buy a private credit and you change your mind, you shouldn't be able to expect to sell it. As my partner, Sheldon Stone, who's been with me for 42 years now, he was my first analyst at Citibank. He says there's no eraser on the pencil, which is, I think…”
Howard Marks: Oaktree records remedial debt exchanges as defaults
“When we do what Sheldon Stone called a remedial exchange, we mark that down as a default.”
Marks: Being raised by Depression-era adults instills fundamental investment caution
“If your parents were adults during the depression, they were traumatized, and you grew up hearing things like, don't put all your eggs in one basket and save for a rainy day. I think, if nothing else, that may be a rather, I would say, cautious person.”