These experts lend insight into such concepts as "second-level thinking," the price/value relationship, patient opportunism, and defensive investing. Marks also adds his own annotations, expanding on his book's original themes and issues. A new chapter addresses the importance of reasonable expectations, and a foreword by Bruce C. Greenwald, called "a guru to Wall Street's gurus" by the New York Times, speaks on value investing, productivity, and the economics of information.
Howard Marks, the chairman and cofounder of Oaktree Capital Management, is renowned for his insightful assessments of market opportunity and risk. After four decades spent ascending to the top of the investment management profession, he is today sought out by the world's leading value investors, and his client memos brim with insightful commentary and a time-tested, fundamental philosophy. Now for the first time, all readers can benefit from Marks's wisdom, concentrated into a single volume that speaks to both the amateur and seasoned investor.
Informed by a lifetime of experience and study, The Most Important Thing explains the keys to successful investment and the pitfalls that can destroy capital or ruin a career. Utilizing passages from his memos to illustrate his ideas, Marks teaches by example, detailing the development of an investment philosophy that fully acknowledges the complexities of investing and the perils of the financial world. Brilliantly applying insight to today's volatile markets, Marks offers a volume that is part memoir, part creed, with a number of broad takeaways.
Marks expounds on such concepts as "second-level thinking," the price/value relationship, patient opportunism, and defensive investing. Frankly and honestly assessing his own decisionsand occasional misstepshe provides valuable lessons for critical thinking, risk assessment, and investment strategy. Encouraging investors to be "contrarian," Marks wisely judges market cycles and achieves returns through aggressive yet measured action. Which element is the most essential? Successful investing requires thoughtful attention to many separate aspects, and each of Marks's subjects proves to be the most important thing.
"This is that rarity, a useful book."Warren Buffett
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About the Author
Bruce C. Greenwald holds the Robert Heilbrunn Professorship of Finance and Asset Management at Columbia Business School and is the academic director of the Heilbrunn Center for Graham & Dodd Investing. He is the coauthor of The Curse of the Mogul: What's Wrong with the World's Leading Media Companies.
Table of Contents
Foreword Bruce C. Greenwald ix
The Most Important Thing is…
1 Second-Level Thinking 1
2 Understanding Market Efficiency (and Its Limitations) 8
3 Value 19
4 The Relationship Between Price and Value 29
5 Understanding Risk 39
6 Recognizing Risk 57
7 Controlling Risk 71
8 Being Attentive to Cycles 81
9 Awareness of the Pendulum 89
10 Combating Negative Influences 97
11 Contrarianism 111
12 Finding Bargains 122
13 Patient Opportunism 131
14 Knowing What You Don't Know 142
15 Having a Sense for Where We Stand 151
16 Appreciating the Role of Luck 161
17 Investing Defensively 171
18 Avoiding Pitfalls 185
19 Adding Value 201
20 Reasonable Expectations 209
21 Pulling It All Together 215
About the Contributors 225