Howard Marks is the chairman of Oaktree Capital and since its inception in 1995 he has tried to put his investment thinking into practice. It consists of having close relationships with clients and managing the firm.
Before serving at Oaktree, Marks worked at The TCW Group where he was in charge of investments in distressed debt, high-yield bonds and convertible securities. Marks also worked at Citicorp Investment Management, where he served as vice president and senior portfolio manager.
He started in finance when he graduated from Wharton School of the University of Pennsylvania. He also holds a degree in finance and an MBA in accounting and marketing from the Graduate School of Business of the University of Chicago.
Oaktree has a particular mandate: provide management services focusing on risk control. Oaktree works in less efficient markets and alternative investments. It has vast experience, an enviable track record, broad product range and substantial assets under management.
"Markets are safer when fear balances greed, and when worry about losing money balances worry about missing opportunity. We don't like it when fear rears its head and stocks drop, but certainly that creates a healthier environment in which to be a holder, and one which should offer better buying opportunities,” says Marks.
Here are some of his buys:
Eagle Bulk Shipping Inc. (EGLE): EGLE is a shipping company with international presence that is engaged in transporting major and minor bulk cargoes, such as grain, iron ore, coal, and fertilizer. The company operates in the Handymax and Supramax sector of the dry-bulk shipping market.
Earnings for the abovementioned two sectors have stagnated somehow due to the versatility of carrying several cargoes. Now, the global fleet is undergoing recycle to partially mitigate some oversupply.
The company is also expecting new builds. This will increase earnings potentials.
Melco Crown Entertainment Ltd. (MPEL): Melco Crown operates casinos in Macau, the region in China with legalized gambling. The company also operates Altira, a megaresort focused on serving VIP customers; City of Dreams, a megaresort located on the Cotai Strip focused on serving mass market and VIP customers; and eight small gaming venues which feature slot machines.
Melco will certainly benefit from an unequal demand and supply in the Chinese gambling market and will certainly increase its revenue in 15% to 20% annually. This increase is boosted by the strong market growth and limited capital expenditure.
CEO Lawrence Ho has shaken up management, and a new team has the potential to improve Melco's performance to the level of more proven operators. Melco's pending acquisition of Macau Studio City will give the company the second-largest presence on the Cotai Strip.
Rio Tinto Plc (RIO): Rio Tinto searches for and extracts a variety of minerals worldwide, with the heaviest concentrations in North America and Australia. Major products include aluminum, copper, diamonds, energy products, gold, industrial minerals and iron ore.
Today's performance is the result of the merger of RTZ and CRA. Both operate as a single company.
In terms of results, the company´s cash flow base is diversified, making it less susceptible to changes in the market. Furthermore RIO is benefitting from the research for natural resources in China
In general terms, the company is doing great and enjoys a strong portfolio.
Petroleo Brasileiro SA Petrobras ADR (PBR): This Brazilian energy company under the Brazilian government´s control is focused on exploration and production for oil and gas in offshore fields.
In 2010, production amounted to 2.6 million barrels a day, while reserves remained at 12.7 billion boe. Petrobras operates 12 refineries in its country of origin.
PBR has a vast experience in the industry, thus it is enabled to exploit newly discovered resources. Most importantly, it heavily relies on Brazil for exploration, production and downstream operations, thus reducing geopolitical risk.