{"id":26367,"date":"2026-03-03T18:06:20","date_gmt":"2026-03-03T18:06:20","guid":{"rendered":"https:\/\/microvibenews.com\/?p=26367"},"modified":"2026-03-03T18:06:20","modified_gmt":"2026-03-03T18:06:20","slug":"howard-marks-was-skeptical-about-ai-what-it-said-to-him-about-buffett-and-munger-left-him-shook","status":"publish","type":"post","link":"https:\/\/microvibenews.com\/?p=26367","title":{"rendered":"Howard Marks was skeptical about AI. What it said to him about Buffett and Munger left him shook"},"content":{"rendered":"

<\/p>\n

Legendary billionaire investor Howard Marks, cofounder and co-chairman of Oaktree Capital Management, has spent decades navigating financial manias, sea changes in interest rates, and the shifting pendulums of investor psychology. But his latest encounter with artificial intelligence left him experiencing a profound level of awe\u2014and a deep existential realization about his own storied career.<\/p>\n

\n

When Marks prepared a memo on whether AI was a financial bubble late last year, he viewed the technology with a healthy dose of skepticism. Like many, he initially assumed AI models were little more than glorified search engines, capable of retrieving and regurgitating data without true comprehension. He wondered whether AI could actually break genuinely new ground, or if it was merely restricted to statistically recombining the thoughts of humans. And so, as he explained in follow-up note to clients on Feb. 26, he talked to \u201csome interesting techies in their thirties and forties.\u201d One of them suggested he ask Claude.<\/p>\n

Anthropic\u2019s AI model produced a tutorial, Marks wrote, explaining AI and changes over the last three months. The resulting 10,000-word essay was so impressive, Marks added, he decided to reprint most of it for his clients in a recap, but he wanted to add some of his own human writing. <\/p>\n

\u201cI could have saved myself a lot of time by asking Claude to write this memo,\u201d he wrote, \u201cbut I decided not to, because I consider putting words on paper a big part of the fun.\u201d<\/p>\n

Marks stressed to clients: \u201cI want to try to communicate the level of awe with which I viewed Claude\u2019s output.\u201d Not only did it read like a personal note that a friend or colleague might have sent, but it psychologically dismantled Marks\u2019 skepticism by using the investor\u2019s own legendary mentors against him. Above all, he said, it was really smart. <\/p>\n

\u201cIt argued logically, anticipated points I might make in response, injected humor, and bolstered its credibility by candidly acknowledging AI\u2019s limitations, just as I might do,\u201d he said. \u201cI\u2019ve asked AI questions before and gotten answers back, but I\u2019ve never received a personalized explanation like I did in this case.\u201d<\/p>\n

Here\u2019s what Claude told Howard, to leave him so impressed, and a bit shaken.<\/p>\n

The Graham, Buffett, Munger example<\/h2>\n

In response to Marks questioning whether AI could genuinely think, synthesize, or have a new idea, Claude delivered a \u201cspirited rejoinder,\u201d Marks said. The machine addressed him directly: \u201cHoward, everything you know about investing came from other people,\u201d the AI wrote. \u201cBenjamin Graham taught you about margin of safety. Buffett taught you about quality. Charlie Munger taught you about mental models from multiple disciplines. John Kenneth Galbraith taught you about the psychology of financial manias.\u201d<\/p>\n

The AI pointed out Marks had spent 50 years reading thousands of books, memos, and case studies, taking raw material from others to produce something genuinely new. <\/p>\n

\u201cYou learned reasoning patterns from decades of reading. I learned reasoning patterns from training,\u201d the AI argued. \u201cThe question isn\u2019t where the inputs came from. The question is whether the system\u2014human or artificial\u2014can combine them in ways that are genuinely novel and useful.\u201d<\/p>\n

The argument left Marks stunned. <\/p>\n

\u201cOf course, this is completely true,\u201d he wrote, marveling at how the AI argued logically, injected humor, and anticipated his counterpoints. The revelation shifted his entire perspective on machine intelligence, forcing him to ask: Is AI\u2019s way of growing, learning, and \u2018thinking\u2019 really different from ours?\u201d<\/p>\n

Marks is famous in financial circles or his periodic \u201cmemos\u201d to Oaktree clients, written since 1990, which analyze market cycles, risk, and investor behavior; they\u2019ve been called some of the most influential writings in modern finance and are now in the Museum of American Finance\u2019s permanent collection. Warren Buffett has said that when he sees a memo from Howard Marks, it is the first thing he reads, which has helped cement Marks\u2019s reputation among professional investors. In 2024, the Museum of American Finance gave Marks a Lifetime Achievement Award for his impact on financial thinking, underscoring how his memos and philosophy have shaped modern investing. So his opinion is just one on the impact of AI, but it\u2019s quite an opinion.<\/p>\n

Reasons why and why not<\/h2>\n

Now viewing AI not as a mere assistant but as an autonomous system\u2014what he calls \u201cLevel 3\u201d AI capable of full labor replacement\u2014Marks said he sees massive implications for Wall Street. Many of the qualities required to be a phenomenal investor are present in AI, which can absorb endless data, recognize historical patterns, and operate entirely free of human greed, fear, or fads. He also noted the technology is advancing at speeds that outpace anything in history, with some models even writing their own code and testing their own software autonomously.<\/p>\n

Yet, despite AI\u2019s terrifyingly fast evolution and its ability to mimic the intellectual synthesis of Buffett and Munger, Marks added he doesn\u2019t believe human investors are entirely obsolete. The human edge, he argues, remains in assessing truly novel developments where historical patterns don\u2019t exist. Furthermore, AI lacks a critical component of investing: \u201cskin in the game.\u201d Unlike humans, a machine does not intuitively sense risk or feel the gut-wrenching fear of capital loss.<\/p>\n

Marks may be right AI will transform finance. But there is reason to pause at the feelings of awe he described. The beauty and persuasiveness of Claude\u2019s response to Marks alone may be cause for skepticism because personalization is one of Claude\u2019s core product feature. Large language models are extraordinarily good at inferring context clues\u2014in this case, the user\u2019s name, professional background, and likely objections\u2014and tailoring output accordingly. The 10,000-word essay felt like a note from a brilliant colleague because it was\u00a0engineered<\/em>\u00a0to feel that way.<\/p>\n

Claude\u2019s central argument\u2014that Marks learned from Graham and Buffett just as Claude learned from training data\u2014sounds profound, but human learning and statistical pattern-matching over text corpora are not the same. Marks didn\u2019t just\u00a0read<\/em>\u00a0Graham; he applied margin of safety in real markets, lost money, felt fear, revised his thinking under genuine uncertainty, and built convictions that cost him something if he was wrong. That feedback loop\u2014consequence, revision, hard-won judgment\u2014is precisely what Claude has never experienced and cannot simulate.<\/p>\n

Ultimately, Marks\u2019 encounter with Claude convinced him AI is vastly more powerful than a simple fad, estimating its true potential is likely being underestimated today. While he cautions against going \u201call-in\u201d on AI stocks due to the risk of ruin, the legendary investor\u2019s final advice is clear: No one should stay \u201call-out\u201d and risk missing one of the greatest technological leaps in human history. Even though Claude will never have skin in the game.<\/p>\n<\/div>\n

#Howard #Marks #skeptical #Buffett #Munger #left #shook<\/p>\n","protected":false},"excerpt":{"rendered":"

Legendary billionaire investor… <\/p>\n","protected":false},"author":1,"featured_media":26368,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[704,662,1263,4696,6639,166,4840,14978,9977,8061],"_links":{"self":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/26367"}],"collection":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=26367"}],"version-history":[{"count":0,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/26367\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/media\/26368"}],"wp:attachment":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=26367"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=26367"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=26367"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}