Ignore This Billionaire’s Advice at Your Own Risk
When Prices Lie, Only Flow Survives
There are only a few memos I read the moment they come out, and even fewer that I go back to weeks later and reread line by line.
Howard Marks’s latest is one of them.
It came out a little over a month ago, sometime in June, and I just reread it again as I started putting this piece together for you. Like Warren Buffett, another statistical outlier who has never had to sell his core, Marks understands the game most people forget: you don’t need to predict the world, you just need to understand the rules that govern it. And the most basic one is this:
You can’t repeal the laws of economics.
Governments try. Regulators pretend. Voters hope. But eventually, the system reminds us that incentives, risk, prices, and scarcity can’t be centrally planned forever.
Marks lays out the absurdity with examples that should be obvious, but somehow aren’t.
Start with rent control. Looks fair on paper. Helps people in the short term. But what happens next? Landlords stop investing. New construction halts. Maintenance drops. Mobility freezes. And eventually, the people those policies were meant to help… can’t find a decent place to live. The market breaks. And not slowly.
Then there’s California’s fire insurance disaster. Price controls were imposed. Insurers left. And when the fires came, people got wiped out. Even Oaktree employees lost their homes. That’s not an anecdote. That’s what happens when you try to erase risk pricing from the system.
It doesn’t stop there. Tariffs, subsidies, distorted incentives all of it sold to voters as a shortcut back to the “good old days.” But Marks is blunt: you can’t bring back the 1950s. You can’t subsidize your way to productivity. What you get instead is misallocation, waste, and fragility.
That fragility is the key word here.
When governments try to suppress prices, flatten volatility, or hide the real cost of capital, they don’t build stability. They build systems that look quiet on the surface but crack violently underneath. And it’s exactly what we’ve seen again and again, especially in economies where central planning tries to replace free exchange.
It’s not just theory. Look at Venezuela. Governments fixed prices on bread, fuel, milk, and electricity.
On paper, everything was “affordable.” In reality, supermarket shelves were empty, lines stretched for hours, and a parallel economy emerged where only the connected had access to real goods. Scarcity doesn’t disappear when you suppress price signals. It multiplies.
Contrast that with what we’re starting to see in Argentina. Still chaotic. Still painful. But with a new willingness to let the market function. When prices move freely, productivity comes back. When capital finds its cost, allocation improves. It’s not magic. It’s just the absence of distortion. And that’s what starts to heal systems.
This is exactly why we build around Asymmetric Finance. Not just as a philosophy, but as a strategy. We’re not here to predict every twist of policy. We’re not here to guess when the next rate cut lands or what politician gets elected. We’re here to construct portfolios and lives that work when the system works, and that survive when it doesn’t.
I don’t sell my core.
I wouldn’t sell my Bitcoin. I wouldn’t sell my cash-flowing real estate. I wouldn’t sell my dividend engines. Those assets aren’t just investments, they are my freedom. They produce the flow that keeps me independent. They compound regardless of the noise. If I have to sell them, it means something has already gone wrong.
What I do adjust is exposure to fragility. I exit sectors where price is a lie. Where policy sets the rules instead of incentives. Where debt is cheap not because the market thinks it’s safe, but because it’s subsidized.
Instead, I sit heavy in cash and short-term T-bills. Earning 4.5% while I wait. That yield isn’t just income, it’s dry powder. It’s optionality. It’s clarity. It lets me sleep well and move fast. It gives me the thing most people lack when the storm hits: space.
And while I wait, I stack flow. Not abstract yield. Not risk premia on paper. Real flow. Clients, licensing deals, digital products. Anything that adds to my monthly base. Because that base is what makes me immune to market cycles. It lets me keep playing without selling. And when others are forced to sell, I’m free to buy.
Now, let’s talk asymmetry.
As you know, we were vocal about Bitcoin around the $16,000 mark. It’s now 5x above that. Not because we chased it, but because it was a clear asymmetry. Limited downside, unlimited upside, and total detachment from fiat manipulation. That hasn’t changed.
Same thing with OTM options. Small positions, big impact. If volatility explodes, those options don’t just protect, they amplify. They give you even more firepower. And in moments of peak dislocation, firepower is everything. While others liquidate, you accumulate.
That’s the game.
We don’t need to win 100% of the time. In fact, all your real returns will come from 10 or 20% of the decisions you make. The job is to build a system that stays alive long enough to catch those. And when they come, you don’t hesitate.
This is how we prepare for any scenario. Not by guessing outcomes, but by living with structure.
Cash when it pays to wait.
Core assets that pay you monthly.
Optionality to attack.
Liquidity that lets you breathe.
Flow that makes you free.
You can’t repeal the laws of economics. But you can align yourself with them.
And when everyone else is trying to defy gravity, you can quietly stand still, compound, and wait for the moment that breaks them.
Because when that moment comes, those with gas, flow, and clarity… win.
Now the Asymmetric Portfolio in detail…
ATH 🚀
