Latest Howard Marks Memo on Oil

http://www.oaktreecapital.com/memo.aspx

"For the last 3 1/2 years, Oaktree's mantra has been "move forward, but with caution." For the first time in that span, with the arrival of some disarray and heightened risk aversion, events tell us it's appropriate to drop some of our caution and substitute a degree of aggressiveness."

Latest memo from Howard Marks: On the Couch
https://www.oaktreecapital.com/insights/...arks-memos

Now, as discussed above, investors’ optimism has deflated a bit, some negativity has come into the equation, and prices have moved lower.  Depending importantly on which market we’re talking about and how it has fared in recent months, we consider it appropriate to move forward with a little less caution.

Something new this time, a video on the memo. Oaktree is becoming more mainstream? Lolx https://www.oaktreecapital.com/insights/...ecent-memo

(16-01-2016, 12:21 PM)ksir Wrote: Something new this time, a video on the memo. Oaktree is becoming more mainstream? Lolx  https://www.oaktreecapital.com/insights/...ecent-memo

Mr Howard Marks look much less comfortable in front of the camera, then let's say Warren Buffett.
Oaktree was listed a couple of years back, that might explain the 'mainstream-ness'.

Oaktree's investment strategy is to sieve for distressed bonds and buy up loads of them.
Howard ever mentioned before while a single distressed bond may likely to capitulate, a fund of them will decrease the risk to a large extent.

Moreover the returns and yield of all the distressed bonds which survived will far outweigh the losses of those that capitulate.

I believe Oaktree is now sieving through the O&G bonds around the world.
Surely not all will collapse.

(16-01-2016, 07:42 PM)arthur Wrote: Oaktree's investment strategy is to sieve for distressed bonds and buy up loads of them.
Howard ever mentioned before while a single distressed bond may likely to capitulate, a fund of them will decrease the risk to a large extent.

Moreover the returns and yield of all the distressed bonds which survived will far outweigh the losses of those that capitulate.

I believe Oaktree is now sieving through the O&G bonds around the world.
Surely not all will collapse.

Distressed investing does not only bank on the debt surviving and profits been made when they go back to par. A lot of times, distressed companies with earning power and/or robust balance sheet are worth more dead than alive - Debt is converted to equity and cashflow is been given a chance by been free from interest payment encumbrances to become positive again. Distressed debt investing needs to know just as much about law (let's say bankruptcy ones) than the conventional top down/bottom up understanding.

Value investors celebrate folks like Benjamin Graham and Seth Karman. The man on the street uphold Peter Lynch as their shining example. Growth investors try to imitate Warren Buffet and Philip Fisher. Shortists or the real serious fundamental investors love to read the work of famous shortists like Carlson Block or Jim Chanos. 

IMHO, Howard Marks provide another different dimension to our learning as OPMIs. He is exclusively focused on the detection of market swings (his famous pendulum analogy). His area of investing needs his team to be truly contrarian in nature (most OPMIs are long-only and frankly speaking, long-only strategies are generally 'optimistic-based' rather than 'pessimistic based') , and focusing on the downside as the ultimate harbinger of returns.

From his memos, Oaktree had started looking into O&G bonds in Dec2014 (ie. 6 months after oil prices started their first descent). So far, he has mentioned that there are more buyers than sellers in the auction.