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How to Make a Killing in a Financial Crisis


(Bloomberg Opinion) -- Making a killing in the financial crisis was easy! “You didn’t need caution, conservatism, risk control, patience, selectivity, discipline, any of those things. All you needed was money and nerve.”

So says Howard Marks, this week's guest on Masters in Business, with tongue planted firmly in cheek. Mark is the co-chairman and co-founder of Oaktree Capital, which manages $122 billion in distressed debt, and has averaged a return of about 19 percent a year after fees during the past 22 years. He is also the author of “Mastering the Market Cycle: Getting the Odds on Your Side.”  Our earlier conversations with Marks are here 2015 and here 2017.

Marks notes in all seriousness that it does take more than just money and nerve: “Sometimes money and nerve will get you killed," he said. "One of the keys to investing is to know which is which.” He likes to quote Elroy Dimson, professor at the London Business School on the subject of risk: “More things can happen than will happen.”

Marks is known for his Chairman’s Memos, missives on markets that have been his creative outlet since 1990.

His favorite books are listed here.

You can stream/download the full conversation, including the podcast extras on iTunesBloombergOvercast and Stitcher. Our earlier podcasts can all be found at iTunesStitcherOvercast and Bloomberg.

Next week, we speak with Rex Sorgatz, author of "The Encyclopedia of Misinformation."

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Barry Ritholtz is a Bloomberg Opinion columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He is the author of “Bailout Nation.”

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