Howard Marks' Advice on Writing: How Memos Helped Raise Billions

Howard Marks co-founded Oaktree Capital Management, which now manages over $190 billion in assets. He has been writing investor memos since October 1990. In the beginning, he had roughly a hundred readers. He would run copies on the Xerox machine, fold them, stuff them in envelopes, and mail them. He never heard back. "It's as if I wrote it out, ran it off, folded it up, put it in the envelope, addressed it, put a stamp on it, and threw them in the sewer."

Now he has over 300,000 subscribers. Warren Buffett said: "When I see memos from Howard Marks in my mail, they're the first thing I open and read." The memos did not reflect Marks's authority. They created it.

His writing advice draws from his conversation with David Perell, his book The Most Important Thing, and 35 years of writing about markets without missing more than a quarter.

Seven Little Words

The introduction to Marks's first book states his version of heaven: "I never thought of it that way."

If a reader agrees with everything you write, you have contributed nothing. Confirmation bias wants support for existing beliefs. A memo that squares with expectations is a waste of the reader's time and yours. The goal is to tell someone something they did not know, or to make them question something they thought they knew.

Marks gets two kinds of responses that make him happy. One: "You changed my life because I now think this or that way." Two: "You make complex things simple." The most flattering compliment he ever received invoked Einstein's four levels of intelligence: bright, brilliant, genius, simple. The inference was that Marks's writing is simple. He took it as the highest praise.

Write When You Have Something to Say

Marks does not write on a schedule. He has no daily word count, no weekly deadline, no monthly obligation. He writes when he has an idea. The only constraint: if he goes three months without a memo, people email to ask if he is dead.

"I don't feel any pressure. I write when I have an idea." The ideas come from what he calls gleaning. He reads an article, clips it. Reads another on a different topic, sees a connection, clips it. A video here. A thought there. Written down, added to the pile. "When the pile is substantial in terms of content, not height, I might write a memo."

This is the opposite of content-calendar writing. Marks does not look at the calendar and ask what he should write about this week. He accumulates material until the material tells him it is ready. The trigger is not a deadline. It is a critical mass of connected ideas.

For someone who started writing about investing, the subjects could have stayed narrow. Instead, Marks writes memos connecting poker to investing, sports to investing, Japanese literature to investing. He has always been good at analogies. He scored highest on the analogies section of the SATs. His brain sees connections between ostensibly unrelated things, and the memos are where those connections get made explicit.

A Pile of Scraps

The writing process starts with scraps of paper. Not an outline. Not Roman numerals. Just ideas, collected over weeks or months, sitting in a pile.

He thinks about the material for a long time. Connections form. An organizational logic emerges. Then he writes. The first draft comes fast. He thinks it is good. Then he reads it again.

"You do a rapid first draft, you think it's good, then you read it over again and you make changes. You move a couple of paragraphs around, you connect a couple sentences with a connector." He does this about five times. Each pass makes it better, but with diminishing returns. The first revision improves it 20%. The second, 10%. The third, 5%. Then 2%, then 1%, then he cannot make it better.

"The word I use for that process is polishing."

After polishing, he sends it to his irregulars - a term he borrowed from William Safire, who described his ragtag group of readers as an army out of uniform. Marks has four or five people. One finds six things wrong. One finds four. One finds ten. And one finds 200 nits: wrong hyphens, wrong commas. He sends it to the nitpicker first. The rest is clearer sailing.

Write the Way You Speak

"One of the most important things I point out to people about my writing is that it is essentially my goal to write the way I speak."

Marks uses contractions. He uses common language. He does not try to impress the reader with vocabulary. He explicitly rejects the approach of writers who "seem to have the goal that I'm going to say things that my reader doesn't understand and I'm going to show them how smart I am."

Mark Twain defined a profession as a conspiracy against the laity. Financial writing is full of jargon that insecure professionals use to reinforce barriers between themselves and the common reader. Marks wants no barrier. "I'm a person. You're a person. We're both people. I know about some stuff you don't know about, but I'd like to share it with you."

This is why his memos get read while most financial white papers get a second and a half of scrolling before the reader bails. Simplicity is not a concession. It is a competitive advantage. If Buffett writes simply and manages billions, the industry's addiction to jargon is not a sign of sophistication. It is a sign of insecurity.

Think in Pictures

Marks thinks visually. The water spout and the ball: the Fed's stimulative policy is a water spout holding a ball aloft. When the policy stops, the ball falls. That image explains temporal versus permanent market forces better than any paragraph of analysis.

He draws graphs in client meetings. In Jaipur, India, lying in bed, he remembered something he had drawn on a whiteboard in Shanghai two years earlier. He pulled up the photo on his phone. That drawing became a chapter in Mastering the Market Cycle.

"One picture tells a thousand words. It's really true. And I tend to think in pictures and graphical relationships, which makes life easy, and I think it makes it easy for people to understand what I'm saying."

For writers who do not think visually, the principle still applies: find the concrete image that makes the abstract idea land. Marks admires Buffett's line - "It's only when the tide goes out that we find out who's been swimming naked" - because it says in fifteen words what takes Marks a full paragraph. The image does the work.

The Professor Who Wrote "AHH"

At Wharton, Marks was required to take a non-business minor. Most students chose economics or statistics. Marks chose Japanese studies. He took five graduate-level courses, four taught by the same professor: E. Dale Saunders.

Saunders was demanding. He would return papers with annotations in tiny handwriting. WW meant wrong word. REP meant repetitive. RED meant redundant. And if you wrote something good, he wrote AHH.

"If you got an AHH, you really felt rewarded."

Those courses turned Marks from an indifferent student into a serious one. The first memo did not come until 25 years later, in 1990. The seeds were planted in 1965. Writing ability is a long-compounding investment.

Reconcile What Does Not Fit

Marks went to Wharton, which was qualitative and practical, then to the University of Chicago, which was quantitative and theoretical. Wharton said: study companies, find bargains. Chicago said: you cannot beat the market because everything is already priced in. Both seemed right. Both could not be.

"Only the challenging reconciliations are interesting. The easy reconciliations are not interesting."

This became his writing prompt for 35 years. Every memo tries to reconcile ideas that seem at odds. What does it mean that you cannot beat the market, yet some people do? What is risk really, if the textbook definition is wrong? How does randomness coexist with skill?

For any writer looking for subjects, this is the most practical advice in the interview: find two things that both seem true but contradict each other. Write about the space between them. That is where the interesting thinking lives.

Key Takeaways

• Do not write until you have something to say. A 28-year-old has no wisdom to impart in memo form. Accumulate experience first.
• Glean material from everywhere. When the pile of connected scraps reaches critical mass, write.
• Polish in rounds with diminishing returns. Five passes. Then send it to your irregulars.
• Write the way you speak. Contractions, common words, no jargon barriers.
• Think in pictures. One image can replace a paragraph of analysis.
• Reconcile what does not fit. The interesting writing lives in the contradiction between two ideas that both seem true.
• Stick with it. Marks threw memos into the sewer for years before anyone read them. He did it because he enjoyed it.

Marks and Sam Corcos both treat writing as a business tool that compounds over time. Corcos writes internal memos at Levels to align a company. Marks writes investor memos to align a market. Both discovered that the act of writing clarifies thinking in ways that speaking cannot, because "the reader is going to go back and read it again and say, hold it, wait a minute." Writing demands rigor that conversation does not.

This post draws from Marks's conversation with David Perell and his Oaktree memos archive. Athens is an AI writing editor that shows every change as a tracked diff - so your memo gets polished without losing the thinking that made it worth writing.