Nobody knew Lehman would collapse. Nobody knew Covid would shut...
Kintsugi Investing@kintsugiinvest
50 views
Apr 12, 2025
~4 min read
Advertisement
1
Nobody knew Lehman would collapse.
Nobody knew Covid would shut down the world.
Nobody knows what Trump’s tariffs will do now.
But when uncertainty reigns, great investors don’t freeze — they act.
Howard Marks’ latest memo breaks down exactly how: 🧵
Nobody knew Covid would shut down the world.
Nobody knows what Trump’s tariffs will do now.
But when uncertainty reigns, great investors don’t freeze — they act.
Howard Marks’ latest memo breaks down exactly how: 🧵
2
1. The best time to invest is when chaos reigns and others are frozen.
In 2008, most investors panicked.
Marks put $10B to work in deeply discounted distressed debt — while everyone else waited for “clarity.”
In 2008, most investors panicked.
Marks put $10B to work in deeply discounted distressed debt — while everyone else waited for “clarity.”
3
2. Honest ignorance beats false confidence.
In 2008, Marks wrote Nobody Knows just four days after Lehman’s collapse.
He made it clear: he didn’t know what would happen next — but he had to act on logic, not fear.
In 2008, Marks wrote Nobody Knows just four days after Lehman’s collapse.
He made it clear: he didn’t know what would happen next — but he had to act on logic, not fear.
4
3. You can’t analyze the future — because it doesn’t exist yet.
In the current tariff standoff, Marks points out that no one — not economists, not governments — has reliable models.
Trade wars of this scale haven’t happened in the modern era.
In the current tariff standoff, Marks points out that no one — not economists, not governments — has reliable models.
Trade wars of this scale haven’t happened in the modern era.
5
4. Crisis favors the prepared.
In 2008, Oaktree had raised a fund specifically for distressed debt — then deployed it when the storm arrived.
Marks followed the plan while others were still processing what just happened.
In 2008, Oaktree had raised a fund specifically for distressed debt — then deployed it when the storm arrived.
Marks followed the plan while others were still processing what just happened.
6
5. Fear prices assets irrationally.
In 2008, Oaktree bought high-grade debt with extraordinary yields — securities they’d never been able to touch before.
Why?
Fear had made even the best assets toxic by association.
In 2008, Oaktree bought high-grade debt with extraordinary yields — securities they’d never been able to touch before.
Why?
Fear had made even the best assets toxic by association.
7
6. You don’t need to be confident — just rational.
Marks admits: “I’m never sure my answers are right.”
But when logic pointed one way, he moved — even if it was uncomfortable.
Marks admits: “I’m never sure my answers are right.”
But when logic pointed one way, he moved — even if it was uncomfortable.
8
7. If you wait for certainty, you’ll overpay.
By the time the dust settles, discounts are gone.
Marks makes this point repeatedly across cycles: clarity is expensive.
By the time the dust settles, discounts are gone.
Marks makes this point repeatedly across cycles: clarity is expensive.
9
8. Markets reward courage when fear peaks.
In March 2020, Marks wrote “Nobody Knows II” at the height of pandemic panic.
There were no analogs, no clarity.
But the same principle held: act logically, not emotionally.
In March 2020, Marks wrote “Nobody Knows II” at the height of pandemic panic.
There were no analogs, no clarity.
But the same principle held: act logically, not emotionally.
10
9. Doing nothing is still a decision — and often the wrong one.
Marks warns against the clichés investors lean on during panic:
• “Wait for the dust to settle”
• “Don’t catch a falling knife”
They sound safe. They’re often costly.
Marks warns against the clichés investors lean on during panic:
• “Wait for the dust to settle”
• “Don’t catch a falling knife”
They sound safe. They’re often costly.
11
10. We’re reliving the same pattern now.
Trump’s tariff threats have shaken the global outlook.
Markets are wobbling. Uncertainty is peaking.
Marks sees this as the next inflection point.
Trump’s tariff threats have shaken the global outlook.
Markets are wobbling. Uncertainty is peaking.
Marks sees this as the next inflection point.
12
11. There are no experts on the future.
Marks notes: no economist or model can accurately project the impact of large-scale trade wars — because it’s never been tested.
Anyone claiming certainty is bluffing.
Marks notes: no economist or model can accurately project the impact of large-scale trade wars — because it’s never been tested.
Anyone claiming certainty is bluffing.
13
12. Markets are not machines — they’re human.
As Marks quotes Feynman:
“Imagine how much harder physics would be if electrons had feelings.”
People react, retaliate, and panic.
That’s what drives markets.
As Marks quotes Feynman:
“Imagine how much harder physics would be if electrons had feelings.”
People react, retaliate, and panic.
That’s what drives markets.
14
13. Tariffs are taxes — and taxes drive prices up.
Marks lays it out: consumers will bear the cost, inflation will rise, and recession risk will follow.
And that’s before any of the intended benefits arrive.
Marks lays it out: consumers will bear the cost, inflation will rise, and recession risk will follow.
And that’s before any of the intended benefits arrive.
15
14. Economic choices always have trade-offs.
Marks cites 2018 steel tariffs:
• 1,000 jobs saved in steel
• 75,000 jobs lost in steel-using industries
Nothing is free.
Marks cites 2018 steel tariffs:
• 1,000 jobs saved in steel
• 75,000 jobs lost in steel-using industries
Nothing is free.
16
15. The world is richer when it plays to its strengths.
Marks: “We’re all better off because Italy makes the pasta and Switzerland makes the watches.”
Tariffs reverse this — and everyone pays
Marks: “We’re all better off because Italy makes the pasta and Switzerland makes the watches.”
Tariffs reverse this — and everyone pays
17
16. America’s golden credit card isn’t limitless.
If trust erodes — from deficits, inflation, or antagonizing allies — foreign buyers may step back.
That threatens the dollar, Treasury demand, and U.S. financial dominance.
If trust erodes — from deficits, inflation, or antagonizing allies — foreign buyers may step back.
That threatens the dollar, Treasury demand, and U.S. financial dominance.
18
17. Uncertainty is the price of admission for opportunity.
Marks points out: fear is high, prices are lower, spreads are wider.
That’s when rational capital should lean in.
Marks points out: fear is high, prices are lower, spreads are wider.
That’s when rational capital should lean in.
19
18. When it’s hardest to buy, it’s usually best to.
“When the time comes to buy, you won’t want to.”
The emotional pain is a feature — not a flaw — of great entries.
“When the time comes to buy, you won’t want to.”
The emotional pain is a feature — not a flaw — of great entries.
20
We're Zee & @thehowietan:
• Financially-free investors
• Focused on resilient investing
• Passionate about helping others build & repair portfolios
Follow @kintsugiinvest for more.
If this was useful, Like & Retweet so others can learn too!
• Financially-free investors
• Focused on resilient investing
• Passionate about helping others build & repair portfolios
Follow @kintsugiinvest for more.
If this was useful, Like & Retweet so others can learn too!
Kintsugi Investing@kintsugiinvest
Nobody knew Lehman would collapse.
Nobody knew Covid would shut down the world.
Nobody knows what Trump’s tariffs will do now.
But when uncertainty reigns, great investors don’t freeze — they act.
Howard Marks’ latest memo breaks down exactly how: 🧵
Nobody knew Covid would shut down the world.
Nobody knows what Trump’s tariffs will do now.
But when uncertainty reigns, great investors don’t freeze — they act.
Howard Marks’ latest memo breaks down exactly how: 🧵
21
@thehowietan If you liked this, you’d love our newsletter.
We share:
• Market insights
• In-depth breakdowns
That help investors learn and sharpen their knowledge about the market.
Join here: kintsugiinvesting.beehiiv.com
We share:
• Market insights
• In-depth breakdowns
That help investors learn and sharpen their knowledge about the market.
Join here: kintsugiinvesting.beehiiv.com
22
@thehowietan Link to memo: https://www.oaktreecapital. com/insights/memo/nobody-knows-yet-again