Hello everyone and welcome to Ed Barron's. I'm Andy Surwer.

And welcome to our guest Howard Marks, co-chairman of Oak Tree Capital.

Howard, great to see you.

Nice to see you, Andy.

So first of all, can you tell us a little bit about Oak Tree for people who aren't familiar with the firm?

Well, Oak Tree is a global alternative investment manager, which basically means not mainstream

stocks and bonds, with its roots and credit.

We're approaching 30 years old, and we're around $200 billion under management.

And Brookfield is now the owner of the company.

You guys have a big stake in it, the original partners, right?

Well, they may say the owner.

We may say they're our partner.

Brookfield has bought out the public and bought part of our stake, and they now own 68%.

And employees, ex-employees, and founders own the remaining 32 percent.

Jumping right into some of the topics you like to talk about, which includes risk, and I know you did a

video recently about the misconceptions that people have about risk. What are they, and can you

explain what you meant by that? Well, the main misconception, Andy, is that people have about risk. What are they, and can you explain what you meant by that?

Well, the main misconception, Andy, is that people want to be able to take the word risk

or the concept of risk and use it in a formula to do computations to figure out what are the

best possible alternatives and how did people do well in the past in a risk-adjusted

sense. So the only number that's available for them to use as a proxy for risk is volatility

or the standard deviation of prices or returns. So they do. I think that that's not what risk is. Risk is, really, if you think about it,

...