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Howard Marks: the memo writer who bought the 2008 panic

In the autumn of 2008, while banks were failing and most investors were selling, Howard Marks's firm was buying, about half a billion dollars a week by its own leaders' accounts. He'd been preparing for a moment like that for years.

Story · 7-minute read · Updated 2026-10-21

Who they were

Howard Marks was born in New York in 1946. He studied finance at the Wharton School and then earned an MBA at the University of Chicago.

He spent his early career at Citibank. There, in the late 1970s, he was asked to run a fund that bought high-yield bonds. These are loans to companies with weaker credit, sometimes called "junk bonds."

Back then, many big investors wouldn't touch them. Marks's view was that a risky asset can be a fair deal if the price is low enough.

What happened

1985. He moved to the investment firm TCW and ran its high-yield and distressed-debt teams. "Distressed debt" means loans to companies that are in trouble, often bought at a deep discount.

1990. He started writing memos to his clients. They were plain letters about risk, cycles and investor mood. He's still writing them.

1995. Marks and several colleagues, including Bruce Karsh, left TCW and founded Oaktree Capital Management in Los Angeles.

2 January 2000. He sent a memo called "bubble.com." It warned that tech-stock prices had lost touch with reality. Within weeks the dot-com crash began. The memo made his name outside his own clients.

2007–2008. Oaktree raised a very large fund for distressed debt, widely reported at about $10.9 billion. The point was to have cash ready if credit markets broke.

September 2008. Lehman Brothers collapsed. Credit markets froze.

Autumn 2008. Oaktree started buying. Its leaders have described putting about $500 million a week to work for weeks on end. Accounts vary on the exact pace and total.

2011. He published The Most Important Thing, a book built from his memos. Mastering the Market Cycle followed in 2018.

2019. Brookfield Asset Management bought a majority stake in Oaktree.

The moment everyone remembers

Late 2008 is the famous part. The news said the financial system might collapse. Everyone wanted cash.

Marks has described the choice he and Karsh made in simple terms. If the world really ended, nothing they did would matter. If it didn't end, this was a rare chance to buy at very low prices. So they bought, in steady amounts, week after week, without knowing where the bottom was.

That's the key detail. They didn't call the bottom. They had a plan, the cash to follow it, and they followed it in steps.

One of his memos, from November 2001, has a title that sums up his whole approach:

What it teaches

1. Preparing beats predicting

Marks has said many times that he can't forecast the economy. What he can do is decide in advance what he'll do in different situations.

A trader can do the same. A trading plan answers "what will I do if…?" before the market asks. Check scheduled news first with the economic calendar, so a big report is something you planned for, not something that surprised you.

2. Price decides whether something is risky

His core idea: there's no such thing as a "good" or "bad" asset on its own. There's only a good or bad price for it.

For a trader, the same idea shows up as where you enter. A trade at a clear level, with a nearby exit, has a small, known risk. The same trade in the middle of nowhere does not. See support and resistance and risk-reward ratio.

3. Act in steps, not all at once

Oaktree didn't spend the whole fund on day one. It bought in steady amounts.

For a beginner, the version of this is simple: one trade is one small slice of risk, about 1%. The position size calculator turns that slice into a trade size from your stop. No single decision has to be perfect.

4. Watch the crowd's mood

His memos talk a lot about the pendulum of investor mood, swinging from greed to fear. When everyone feels safe, risk tends to be high. When everyone is scared, prices can get cheap.

That doesn't tell you when to act. It tells you to notice how you feel, and to check whether you're following your plan or the crowd. See FOMO trading.

What it doesn't mean

It doesn't mean "buy every crash." In 2008, Oaktree had decades of experience, long-term money and the patience to hold for years. A crash bought with borrowed money or short-term savings is a very different thing.

It doesn't mean Marks was always right. He's written openly about calls that were early or wrong. Being early can feel the same as being wrong for a long time.

And it doesn't mean you can expect his results. Big institutional funds buy things retail traders can't, on terms they can't get. The lesson to borrow is the habit, not the trade: prepare, size small, act in steps.

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