skip to content
Site header image reelikklemind

🎙️ How to Write Good: Howard Marks

How Writing Helped Him Raise Billions

🌲 Evergreen 🎧 Podcast ✏️ Writings 🧧 Investing

🎙️ How to Write Good: How he raised billions with simple ideas | Howard Marks

PODCAST INFORMATION

How to Write Good
How he raised billions with simple ideas | Howard Marks
David Perell (Host)
Howard Marks (Guest) - Co-founder of Oaktree Capital Management and author of "The Most Important Thing"
Episode Duration: 53 minutes

🎧 Listen here.


HOOK

Howard Marks, the investment legend who manages over $190 billion, reveals how his ability to transform complex investment concepts into crystal-clear memos not only built his business empire but demonstrates that the most powerful form of intelligence is simplicity itself.


ONE-SENTENCE TAKEAWAY

Extraordinary writing comes from distilling complex ideas into simple, accessible insights that make readers say "I never thought of it that way," while building a body of work that stands the test of time through principles-based thinking.


SUMMARY

In this episode of How to Write Good, host David Perell engages in a fascinating conversation with Howard Marks, the legendary investor and co-founder of Oaktree Capital Management, who has built a remarkable following through his investment memos over the past 35 years. Marks shares his journey from writing memos for just 100 clients in 1990 to reaching over 300,000 subscribers today, all while managing more than $190 billion in assets.

The conversation begins with Marks explaining his ultimate writing goal: hearing readers say "I never thought of it that way." He emphasizes that writing should challenge people's existing beliefs rather than simply confirming what they already know. Marks discusses how his logical, left-brain thinking allows him to break down complex processes in an orderly fashion, making sophisticated concepts clear and accessible.

Marks reveals his unique writing process, which begins without pressure or deadlines. He collects ideas on scraps of paper over time, waiting for inspiration to strike. When he has enough content, he organizes these thoughts and begins writing. He emphasizes the importance of extensive editing, going through multiple drafts to polish his work, and relying on a trusted group of "irregulars" who provide feedback ranging from substantive critiques to nitpicky grammatical corrections.


A central theme of the conversation is the value of simplicity in writing. Marks shares that someone once told him about Einstein's four levels of intelligence: bright, brilliant, genius, and simple; indicating that simplicity represents the highest form of intelligence. He contrasts his approach with much of the financial industry, which he believes uses jargon to create barriers between professionals and the public.

Marks discusses the surprising origins of his writing career, tracing it back to his college days at Wharton where he took Japanese literature courses. A demanding professor, E. Dale Saunders, helped transform him from an indifferent student into a serious writer by providing meticulous feedback on his papers. This experience, combined with his education at both Wharton (qualitative) and the University of Chicago (quantitative), gave him a unique perspective that he later applied to investment philosophy.


The conversation explores why Marks was willing to share his investment insights publicly through his memos. He explains that while he can tell people what's important, most still won't be able to implement it successfully. The implementation gap, he argues, protects his competitive edge while allowing him to enjoy the creative process and build relationships through his writing.

Marks and Perell discuss the importance of having something meaningful to say before writing. Marks advises young professionals to wait until they have genuine wisdom to impart rather than forcing content. He emphasizes the value of writing from a principle-based perspective rather than commenting on fleeting market events.


The conversation concludes with Marks sharing his approach to reconciling seemingly contradictory ideas, a hallmark of his writing. By finding the connections between disparate concepts, such as the qualitative approach of Wharton and the quantitative methods of Chicago, he creates content that is both intellectually stimulating and practically valuable.

Throughout the episode, Marks' humility, intellectual curiosity, and dedication to clarity shine through, providing listeners with a masterclass in both writing and thinking clearly about complex subjects.


INSIGHTS

  1. The highest form of intelligence is simplicity. As Einstein reportedly said, there are four levels of intelligence: bright, brilliant, genius, and simple. The ability to make complex ideas accessible represents the pinnacle of understanding.
  2. Writing should challenge readers' existing beliefs rather than simply confirming what they already know. The most rewarding response from a reader is "I never thought of it that way," which indicates you've added value to their thinking.
  3. Quality is the one aspect of your work that's completely within your control. In a world filled with randomness and factors beyond your influence, focusing on producing the highest quality output possible is both empowering and strategic.
  4. Having something meaningful to say is more important than writing frequently. Marks advises waiting until you have genuine wisdom to impart rather than forcing content for the sake of consistency.
  5. Writing from principles rather than events creates more valuable content. Commenting on daily market fluctuations is less useful than exploring timeless investment principles that stand the test of time.
  6. The implementation gap protects your competitive edge when sharing knowledge. You can tell people what's important, but most still won't be able to implement it successfully, allowing you to share insights freely without risking your advantage.
  7. Intellectual curiosity and making connections between disparate ideas leads to more interesting writing. Marks excels at finding relationships between seemingly unrelated concepts, such as sports, gambling, and investing.
  8. Writing should read like speech. Using contractions, common language, and accessible phrasing removes barriers between writer and reader, making complex ideas more approachable.
  9. The most interesting writing reconciles seemingly contradictory ideas. Finding the connection between qualitative and quantitative approaches, or theory and practice, creates content that is both intellectually stimulating and practically valuable.
  10. Extensive editing and feedback are essential to quality writing. Marks goes through multiple drafts of his memos and relies on a trusted group of reviewers to help polish his work before publication.


FRAMEWORKS & MODELS

  1. The Writing Process Model
    • Components: Idea collection, incubation, first draft, multiple editing rounds, feedback incorporation
    • How it works: Marks collects ideas on scraps of paper over time, waits for inspiration, writes a first draft, then polishes it through multiple editing iterations with feedback from trusted reviewers
    • Application: This approach reduces pressure and ensures content is developed only when meaningful ideas have accumulated
    • Significance: It explains how Marks consistently produces high-quality content without forcing the writing process
    • Example: Marks' "Getting Lucky" memo emerged from collecting various thoughts on randomness and luck over time, then synthesizing them into a coherent piece
  2. The Simplicity Framework
    • Components: Complex ideas, logical breakdown, accessible language, visual analogies, clear explanations
    • How it works: Take sophisticated concepts and break them down into their fundamental components, then explain them using everyday language and relatable analogies
    • Application: Makes complex investment and economic concepts understandable to a broad audience without sacrificing accuracy
    • Significance: Demonstrates that the highest form of intelligence is making complex ideas simple rather than making simple ideas complex
    • Example: Marks' analogy of the economy as a ball held up by a water spout (representing Fed stimulus) helps visualize temporary versus permanent economic influences
  3. The Principle-Based Writing Approach
    • Components: Core beliefs, timeless concepts, philosophical foundations, practical applications
    • How it works: Write from a foundation of established principles rather than commenting on fleeting events or market movements
    • Application: Creates content that remains relevant over time rather than becoming quickly outdated
    • Significance: Explains why Marks' memos have remained valuable for decades while much financial writing becomes obsolete quickly
    • Example: Marks' repeated explorations of risk throughout his career, each time adding depth rather than chasing the latest market trend
  4. The Intellectual Curiosity Model
    • Components: Diverse reading, making connections, challenging assumptions, reconciling contradictions
    • How it works: Actively seek ideas from various disciplines and find unexpected relationships between them
    • Application: Generates fresh insights by combining concepts from different fields in novel ways
    • Significance: Creates content that stands out by offering unique perspectives rather than rehashing conventional wisdom
    • Example: Marks' memos connecting sports, gambling, and investing demonstrate how he draws insights from diverse fields to illuminate investment principles
  5. The Quality Control Framework
    • Components: Focus on controllable factors, excellence in execution, consistency of output, long-term perspective
    • How it works: Concentrate on producing the highest quality work possible rather than focusing on outcomes beyond your control
    • Application: Builds reputation and trust over time through consistently high-quality output
    • Significance: Provides a sustainable approach to writing and professional development that isn't dependent on external validation
    • Example: Marks continued writing his memos for years with few readers, focusing on quality rather than immediate recognition, eventually building a massive following


QUOTES

  1. "Heaven for me would be seven little words: I never thought of it that way." - Howard Marks
    • Context: Explaining his ultimate goal when writing investment memos
    • Significance: Captures the essence of what makes writing valuable—challenging readers' existing beliefs and offering new perspectives
  2. "There are four levels of intelligence: bright, brilliant, genius, simple." - Howard Marks (quoting Einstein)
    • Context: Discussing what makes his writing stand out in the financial industry
    • Significance: Highlights that the highest form of intelligence is making complex ideas accessible, not demonstrating complexity
  3. "If you think about the role of randomness in the world, there's so much that's not within your control. One thing that's within your control is the quality of your output." - Howard Marks
    • Context: Advising his son and others on how to approach their work and writing
    • Significance: Emphasizes the empowering focus on what you can control (your output quality), rather than worrying about uncontrollable factors
  4. "For the simplicity on this side of complexity, I wouldn't give you a fig. For the simplicity on the far side of complexity, I'd give you the entire world." - Howard Marks (quoting Oliver Wendell Holmes)
    • Context: Discussing the value of making complex ideas clear and accessible
    • Significance: Distinguishes between superficial simplicity and the profound simplicity that comes from deeply understanding complex subjects
  5. "Don't waste your time until you have something to say." - Howard Marks
    • Context: Advising young professionals on when to start writing seriously
    • Significance: Emphasizes that meaningful writing requires genuine wisdom and experience, not just the desire to write


HABITS

  1. Pressure-Free Writing
    • Practice: Write only when inspired and without deadlines or regularity requirements
    • Implementation: Collect ideas over time and wait for them to coalesce into meaningful content before beginning to write
    • Application: Produces higher quality content by avoiding forced writing when inspiration is lacking
    • Benefit: Reduces the stress associated with writing and ensures that content is meaningful and well-developed
    • Pitfall to avoid: Letting too much time pass between writing sessions, potentially losing momentum or audience connection
  2. Idea Collection
    • Practice: Gather thoughts, quotes, and articles on scraps of paper over time
    • Implementation: Keep a physical or digital collection system for interesting ideas and connections you notice
    • Application: Builds a repository of raw material that can be synthesized into coherent pieces when inspiration strikes
    • Benefit: Ensures a steady stream of content ideas and helps identify unexpected connections between disparate concepts
    • Pitfall to avoid: Collecting too many ideas without organization, making it difficult to find and use them later
  3. Extensive Editing
    • Practice: Go through multiple drafts of each piece, refining and polishing with each iteration
    • Implementation: Write a rapid first draft, then revise multiple times, focusing on improving clarity, flow, and impact
    • Application: Transforms initial thoughts into polished, professional-quality writing
    • Benefit: Each revision significantly improves the quality of the final product
    • Pitfall to avoid: Over-editing to the point where the writing loses its natural voice and spontaneity
  4. Seeking Diverse Feedback
    • Practice: Use a trusted group of reviewers with different strengths and perspectives
    • Implementation: Share drafts with people who provide different types of feedback, from substantive critiques to grammatical corrections
    • Application: Improves writing by addressing weaknesses you might not notice yourself
    • Benefit: Results in more polished, error-free content that resonates with different types of readers
    • Pitfall to avoid: Getting too much conflicting feedback, making it difficult to decide which suggestions to incorporate
  5. Cross-Disciplinary Learning
    • Practice: Read widely across different fields and look for connections between seemingly unrelated ideas
    • Implementation: Explore subjects outside your primary area of expertise and actively search for relationships between different domains
    • Application: Generates fresh insights and analogies that make complex ideas more accessible
    • Benefit: Creates more interesting and original content by combining concepts from diverse fields
    • Pitfall to avoid: Making forced or superficial connections between ideas that don't genuinely relate
  6. Writing Like You Speak
    • Practice: Use conversational language, contractions, and accessible phrasing
    • Implementation: Read your writing aloud to ensure it sounds natural and flows conversationally
    • Application: Makes complex ideas more approachable and removes barriers between writer and reader
    • Benefit: Increases reader engagement and comprehension by making content feel more personal and accessible
    • Pitfall to avoid: Becoming too casual or informal when discussing complex subjects that require precision


REFERENCES

  1. Educational Background
    • Wharton School (1963-1967) - Practical, qualitative approach to business and investing
    • University of Chicago MBA - Exposure to the quantitative, theoretical "Chicago School" of investment thought
    • Japanese Literature courses with Professor E. Dale Saunders - Developed writing skills and appreciation for elegant expression
  2. Influential Thinkers
    • Peter Bernstein - Investment philosopher and author of "Against the Gods" who influenced Marks' thinking on risk
    • Warren Buffett - Admired for his turn of phrase and ability to make complex ideas accessible
    • Yogi Berra - Quoted for his insights on the difference between theory and practice
    • Oliver Wendell Holmes - Quoted on the value of simplicity on the far side of complexity
  3. Key Works
    • "The Most Important Thing" - Marks' book compiling his investment wisdom
    • "Mastering the Market Cycle" - Marks' book on understanding market cycles
    • Investment Memos (1990-present) - Marks' regular writings on investment philosophy and market conditions
    • "Can We Reduce Risk to a Number?" - Peter Bernstein's memo that influenced Marks' thinking on risk
  4. Investment Philosophy
    • The reconciliation of qualitative (Wharton) and quantitative (Chicago) approaches to investing
    • The importance of risk management in investment success
    • The role of randomness and luck in investment outcomes
    • The value of second-level thinking in investment decision-making
  5. Writing Principles
    • The importance of clarity and simplicity in communicating complex ideas
    • Writing from principles rather than commenting on fleeting events
    • The value of intellectual curiosity and making connections between disparate ideas
    • The goal of making readers say "I never thought of it that way"



Crepi il lupo! 🐺