AI Summary
5 min readHoward Marks, the 78-year-old co-founder of Oaktree Capital Management, recently changed his mind about AI after his son Andrew, a venture capitalist, told him he needed to update a memo he had written just two months earlier. Marks upgraded his opinion because of something unprecedented: AI has autonomy. "All the other technological innovations from the railroad to computers to the internet were all tools to speed up and increase productivity," he says. "There's never been anything with the quality of autonomy. The idea that you can give it a job and not tell it how to do it and it'll figure it out." The second thing that makes AI different is its unpredictability — Marks says he never felt the internet was beyond comprehension or prediction, but AI is.
What AI can and cannot replace in investing
Marks is clear that AI will "unfrock" many investors whose talents are not as great as they purport, just as indexation exposed active equity managers who underperform the averages. AI can read, remember, and process vast amounts of data faster than any human. But he identifies two things that may remain beyond its reach.
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What you'll learn
- 1 (00:07) **Defining the AI Shift** - Howard Marks explains why he changed his mind about AI after his son Andrew pushed him to update his memo
- 2 (03:42) **Can AI Replace an Investor?** - Marks assesses what AI can and cannot do in investing
- 3 (07:05) **Second-Level Thinking: The Uncoachable Skill** - The core of superior investing is seeing what others miss, and it can't be taught
- 4 (10:26) **The Lehman Moment: Acting Without Certainty** - How Oaktree deployed $11 billion during the 2008 crisis despite deep doubt
- 5 (14:51) **How to Raise $11 Billion Before a Crisis** - The mechanics of raising a massive fund ahead of the storm
- 6 (19:00) **The Battle Hero Mentality** - How to act when you are afraid but must proceed
- 7 (20:25) **The 39-Year Partnership: How to Make It Last** - The ingredients for a long-term business partnership with Bruce Karsh
+ Full timestamped outline available in the app
Guests on this episode
Show Notes
Investing Guide: https://clickhubspot.com/epkr
Episode 841: Sam Parr ( https://x.com/theSamParr ) and Shaan Puri ( https://x.com/ShaanVP ) talk to legendary investor Howard Marks about AI and making decisions in the face of fear and uncertainty.
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Show Notes:
(0:00) AI Hurtles Ahead
(8:26) second level thinking
(10:21) investing through the end of the world
(14:47) raising $11B at a time of crisis
(17:54) investing with fear
(20:22) the key to a successful partnership
(25:01) being a good father
(27:37) only 1 success: to live your life your way
(34:17) Having lunch with Warren Buffett
(37:18) What people don't know about Buffett
(39:37) cigar butt investing
(41:35) recommended reading
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Links:
• AI Hurtles Ahead - https://www.oaktreecapital.com/insights/memo/ai-hurtles-ahead
• A Short History of Financial Euphoria - https://www.amazon.com/History-Financial-Euphoria-Penguin-Business/dp/0140238565
• Fooled by Randomness - https://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219
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• Hampton (joinhampton.com): My community for founders. Average member does $25m/year. Many of the guests are members. Get after it...apply: http://joinhampton.com/mfm
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• Shaan's weekly email - https://www.shaanpuri.com
• Visit https://www.somewhere.com/mfm to hire worldwide talent like Shaan and get $500 off for being an MFM listener. Hire developers, assistants, marketing pros, sales teams and more for 80% less than US equivalents.
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My First Million is a HubSpot Original Podcast // Brought to you by HubSpot Media // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano /
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