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The Most Important Thing: Uncommon Sense for the Thoughtful Investor (Columbia Business School Publishing) Kindle Edition

by Howard Marks (Author) Format: Kindle Edition
4.6 4.6 out of 5 stars 3,472 ratings
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"This is that rarity, a useful book."--Warren Buffett

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 decisions--and occasional missteps--he 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.

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    196 pages
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    Columbia Business School Publishing
  4. Publication date
    May 1, 2011
  5. File size
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  1. “Experience is what you got when you didn’t get what you wanted.”
    Highlighted by 586 Kindle readers
  2. All investors can’t beat the market since, collectively, they are the market.
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  3. The discipline that is most important is not accounting or economics, but psychology.
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Editorial Reviews

Review

A clear and expert resource for all investors. ― Kirkus Reviews

Everyone knows about the anticipation leading up to Warren Buffett's annual shareholder letters. But for a certain Wall Street set, there are equally high expectations for the writings of Howard Marks. -- Peter Lattman ― Wall Street Journal

When I see memos from Howard Marks in my mail, they're the first thing I open and read. I always learn something, and that goes double for his book. -- Warren Buffett, Chairman and CEO, Berkshire Hathaway

[A] must-read book. -- David J. Waldron ― Seeking Alpha

If Benjamin Graham's and David Dodd's Securities Analysis was the essential, must have investment book of the end of the 20th century, then Howard Marks's The Most Important Thing is a serious contender for parallel status in the 21st century. -- Stephen E. Roulac ― New York Journal of Books

All investors should read it. -- Alex Dumortier ― The Motley Fool

The Most Important Thing is destined to become an investment classic-it should easily earn its place on every thinking investor's bookshelf. Howard Marks has distilled years of investment wisdom into a short book that is lucid, entertaining, and ultimately profound. -- Joel Greenblatt, Columbia Business School, founder and managing partner of Gotham Capital

Veteran value-investing manager Howard Marks draws on pithy memos he wrote to clients over the years to dispense insightful advice on everything from risk taking to the role of luck. ― Money Magazine

Few books on investing match the high standards set by Howard Marks in The Most Important Thing. It is wise, witty, and laced with historical perspective. If you seek to avoid the pitfalls of investing, you must read this book! -- John C. Bogle, Founder and former CEO, The Vanguard Group

Regular recipients of Howard Marks's investment memos eagerly await their arrival for the essential truths and unique insights they contain. Now the wisdom and experience of this great investor are available to all. The Most Important Thing, Marks's insightful investment philosophy and time-tested approach, is a must read for every investor. -- Seth A. Klarman, president, The Baupost Group

There is, quite simply, an incredible amount of wisdom between the covers of his book and an investor is doing them a disservice if they don't read, and re-read, this book. ― FocusInvestor.com

...many valuable insights into the psychological roots of investors' habitual errors. -- Martin Fridson ― Barron's

If you take an exceptional talent and have them obsess about value investing for several decades, including deep thinking about its very essence with written analysis along the way, you may come up with a book as useful to value investors as this one but don't count on it. -- Jeremy Grantham, cofounder and chief investment strategist, Grantham Mayo Van Otterloo

The book is written in a way that both seasoned investors and novices should appreciate. -- Brenda Jubin ― Seeking Alpha

"The Most Important Thing"... offers readers an overview of how to think when considering an investment opportunity, which is quite valuable indeed, considering studies have shown most people tend to make impulsive, indiscriminate investment decisions. ― Syracuse Post-Standard

About the Author

Howard Marks is chairman and cofounder of Oaktree Capital Management, a Los Angeles-based investment firm with $80 billion under management. He holds a Bachelor's Degree in finance from the Wharton School and an MBA in accounting and marketing from the University of Chicago.

Product details

  • ASIN ‏ : ‎ B004U5Q1O0
  • Publisher ‏ : ‎ Columbia Business School Publishing (May 1, 2011)
  • Publication date ‏ : ‎ May 1, 2011
  • Language ‏ : ‎ English
  • File size ‏ : ‎ 1.1 MB
  • Text-to-Speech ‏ : ‎ Enabled
  • Screen Reader ‏ : ‎ Supported
  • Enhanced typesetting ‏ : ‎ Enabled
  • X-Ray ‏ : ‎ Enabled
  • Word Wise ‏ : ‎ Enabled
  • Print length ‏ : ‎ 196 pages
  • Customer Reviews:
    4.6 4.6 out of 5 stars 3,472 ratings

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Customer reviews

4.6 out of 5 stars
3,472 global ratings

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Customers say

Customers find the book insightful and thought-provoking. They describe it as an excellent read for beginners and a worthwhile experience. The prose is concise, simple, and well-crafted. However, some readers feel the text is repetitive, with the same ideas being repeated in different sections.

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Value for moneyReadabilityEase of readingCraftednessRepetition
122 customers mention "Value for money"109 positive13 negative

Customers find the book provides an enjoyable glimpse into Howard Marks' investment philosophy. They appreciate the insightful chapters on second-level thinking and risks. The book covers the basics an investor should know, with wisdom and knowledge packed between the covers.

"...This book did it. The amount of knowledge packed in it is worth gold...." Read more

"...Although Marks shares his high level investment philosofy, he never shares enough to allow someone to understand exactly how he implements it in..." Read more

"...book on any particular investing strategy, but rather a book on his philosophy of investing, learned over the years from experience, from books,..." Read more

"...There is, quite simply, an incredible amount of wisdom between the covers of his book and an investor is doing them a disservice if they don't read..." Read more

75 customers mention "Readability"68 positive7 negative

Customers find the book easy to read and engaging. They appreciate its logical advice based on fundamentals of the market. Readers mention it's a worthwhile read for any investor, especially beginners. The book covers the basics an investor should know.

"...Overall a must read, but don't expect an excellent literary experience...." Read more

"This is truly the best book that I have ever read about inefficient markets...." Read more

"It is a well written book that covers the basics an investor should know. Not recommended for people who have a good base knowledge." Read more

"...Still well worth the read!" Read more

44 customers mention "Ease of reading"36 positive8 negative

Customers find the book easy to read for beginners. They appreciate the simple language and clear explanations. The book makes sense and is logical, with compelling illustrations. Readers praise the author's ability to articulate value and manage risk effectively.

"...It is conceptually sound and simultaneously based on the wise experience of a portfolio manager over decades...." Read more

"Concise but dense with knowledge, Howard Marks is as savvy as they come. Definitely recommend this read for all investors." Read more

"...analysis of broad trends in the world of investment, but shows a canny grasp of the reader...." Read more

"...I do as well, and has distilled his approach and experience into a concise, focused text that offers seasoned investment wisdom to those looking for..." Read more

5 customers mention "Craftedness"5 positive0 negative

Customers find the book well-crafted and useful for lay investors. They appreciate its accessible prose, excellent condition, and robust arguments for value. The book provides a believable and unbiased view than many similar books.

"...Marks has made an indelible impression on me through this well-crafted treatment of second-level thinking, articulating value, and managing risk..." Read more

"...The arguments arent new but presented in a more believable and unbiased form than many similar books...." Read more

"...A must to read for growing success! Excellent condition, slightly highlighted in the beginning of the book however very pleasant read and thoughtful..." Read more

"...Accessible prose, well crafted, useful for the lay investor. The insights speak clearly to the fiduciary and investment professional...." Read more

6 customers mention "Repetition"0 positive6 negative

Customers find the book repetitive. They mention that the same ideas are repeated in different sections and paraphrased multiple times.

"...It often feels verbose, with the same ideas repeated in different sections and paraphrased in multiple similar ways...." Read more

"...Marks's excellent Oaktree Memos, it can at times read as somewhat disjointed or repetitive. Still well worth the read!" Read more

"...The result is a choppy, repetitive tome that, frankly, reads like one long advertisement of Oaktree, which is highly praised throughout as following..." Read more

"...The only reason I don't give it 5 stars is because it is a little repetitive at times, which is something the author acknowledges...." Read more

This book is a rare Gem! Even Warren Buffett agrees. I’m transfixed, life changer. Foundational.
5 out of 5 stars
This book is a rare Gem! Even Warren Buffett agrees. I’m transfixed, life changer. Foundational.
To all value investors, here is that rare Gem, something everyone should read as 2021 begins! The clarity and the wisdom that it presents is amazing. When I read Warren Buffets recommendation for this book I knew it was going to be an extremely valuable read, and I wasn’t disappointed. Howard Marks is the real deal. This book is for anyone who attempts to put the odds of risk in their favor as much as possible, and as much as can be done knowing the uncertainty of looking into the future. Book is written with such rational reason and balance, not with hype or get rich undertones. Some reviews say that it is repetitive, I strongly disagree! Anyone who invests, or is in business, HAS to have a strong sense of WHO HE IS. Everyone must have cornerstones to their business strategy and his cornerstones are so foundational, that he so generously shares with us, you can follow his thinking, I'm sure its the exact same as he evaluates any given investment.These precious principles are exactly where he starts his evaluations. This should be an absolute corner stone of anyone’s investment foundational thinking.Also this wisdom is FULLY transferable into my profession which is commercial real estate. I like to tell people that my business is risk evaluation when they ask what I do. In effect, My business amounts to nothing more than risk evaluation. The similarities are astounding.
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Top reviews from the United States

  • Amazon Customer
    5.0 out of 5 stars A must read for anyone who wish to be an advanced investor
    Reviewed in the United States on January 29, 2025
    Verified Purchase
    I was getting really bored reading investing books because they were all saying more or less the same thing. I wanted to read an investing book that advance my investing knowledge beyond the basic stuff. This book did it. The amount of knowledge packed in it is worth gold. It really showed me just how wrong was I and many I know are in our investing strategy. Reading about the market cycles was an eye opener.
    One person found this helpful
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  • Amazon Customer
    5.0 out of 5 stars Excellent book
    Reviewed in the United States on September 20, 2024
    Verified Purchase
    Summarize the common sense of investing which are not so easy to realise when you are in the zone
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  • pedrog
    4.0 out of 5 stars Good, not great
    Reviewed in the United States on March 15, 2016
    Verified Purchase
    Howard Marks is a value investing genius, with an astounding track record of ~20% p.a. returns for 25+ years. Therefore, I'm happy to read anything he is willing to share. In this book, he shares deeply toughtful insights, but in a somewhat dry, unengaging and repetitive text. Overall a must read, but don't expect an excellent literary experience.

    Although Marks shares his high level investment philosofy, he never shares enough to allow someone to understand exactly how he implements it in practice. How much safety margin? Which level of diversification? How to attribute probabilities to extreme events? Some nitty-gritty and real life examples would have transformed this book from a gospel to a more vivid and practical read.

    This could be accomplished while simultaneosly reducing the lenght of the book. It often feels verbose, with the same ideas repeated in different sections and paraphrased in multiple similar ways. Additionally, his habit of citing his own past writings is unnecessary and baloons the reading time without delivering much value to the reader.
    74 people found this helpful
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  • Lauchlan Mackinnon, Ph.D.
    5.0 out of 5 stars A thoughtful investing philosophy
    Reviewed in the United States on August 18, 2024
    Verified Purchase
    This was an excellent book on core principles and ideas underlying investing. It is not a book on any particular investing strategy, but rather a book on his philosophy of investing, learned over the years from experience, from books, from experts he knows, and through supporting clients.

    It is structured as 18 chapters, each reflecting on a different aspect of investing … each of which is the next “most important thing.” Because, he says, ALL the “things” in the book are important.

    It covers topics such as what risk really is (his notion of risk a much more perceptive and useful idea than the unhelpful nonsense from finance theory, where risk is defined as market volatility), or how to identify value.

    The book is targeted more towards active investors who want to deliver superior performance than market indexes (i.e. significantly beat market averages), which is of course is hard to do. To achieve this, he says, investors need to have uncommon insight or “second level thinking,” and to form a clear understanding of value (so that one can understand the relationship of price to value in the context of any risks).

    If you don’t want to pursue above average performances, he points out, you’d be better off investing in an index fund (or, nowadays, its ETF equivalent) - which out-performs around 90% of active fund managers anyway.

    Outperforming the market index is a “big freaking deal,” which few investors do successfully or consistently. He offers a philosophy for key things to understand and reflect on if you want to go down that path … or if you want to be a better investor in general.

    I recommend the book.
    8 people found this helpful
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  • Rawley Thomas
    5.0 out of 5 stars The Most Important Thing - Inefficient Markets
    Reviewed in the United States on June 11, 2012
    Verified Purchase
    This is truly the best book that I have ever read about inefficient markets. It is conceptually sound and simultaneously based on the wise experience of a portfolio manager over decades. In particular, Howard Marks' explanation of the cylicality of markets around their intrinsic valutions correctly explain market over reaction. Market over reaction offers the opportunity to profitably trade for the longer term. Acaemics call this cyclicality "ranges of bounded rationality." Practitioners call it "market sentiment." Bollinger attempts to measure it with "Bollinger Bands." (Bollinger Bands are +/- 1.5 standard errors of prices over a 200 day moving average.) Behavioral finance people account for this cyclicality based on human irrationality.

    Marks does a terrific job of calling into question the commonly accepted academic assumption: market prices ALWAYS equal intrinsic valuation. The academic community must relax this erroneous assumption. Until that community does so, the profession will continue to face an impossible task. That task is making progress on the core issues facing manking on how markets actually work in the real world.

    Empirical evidence to support Mark's incredibly sound concepts would substantiate his arguments. My research fills part of this gap. Combining Marks' concepts with Benoit Mandelbrot's research measurements promises the opportunity to achieve both lower fat-tailed risk and superior investment returns.

    Rawley Thomas
    President and Co-Founder of LifeCycle Returns
    Co-Editor of The Valuation Handbook
    The Valuation Handbook: Valuation Techniques from Today's Top Practitioners (Wiley Finance)
    and
    Co-Author of ValuFocus Investing
    ValuFocus Investing: A Cash-Loving Contrarian Way to Invest in Stocks (Wiley Finance)
    2 people found this helpful
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Top reviews from other countries

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  • Michael Kurkdjian
    5.0 out of 5 stars An excellent common sense investing book a lot of information on how to get better
    Reviewed in Canada on February 21, 2023
    Verified Purchase
    This is a very underrated book. There is excellent advice on almost every page. The author Howard Marks has also received annotations by other great investors throughout the book that emphasize the points and give different perspectives. The content of the book can be applied to any kind of investment not just stocks, bonds, but anything to do with investing our funds for the future. Truly wish I had read this book years ago. I will definitely read it a second time.
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  • Hemant Kumar
    5.0 out of 5 stars Most important book for investment
    Reviewed in India on December 28, 2024
    Verified Purchase
    Book that is easy to understand, written in simple language.This book gives clear explanations for all readers. Its simple style makes complex topics easy to grasp. The author's straightforward approach is refreshing and engaging. Readers will appreciate the concise and well-structured sentences. It's a perfect choice for anyone seeking a clear and understandable read.
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  • Robert ‘Bob’ Macespera
    5.0 out of 5 stars A superb lesson on investing
    Reviewed in the United Kingdom on February 20, 2023
    Verified Purchase
    This is a superb, and short, book that, to this eyes, is the best book on stocks investing since the canonical "The Intelligent Investor" was published three-quarters of a century ago (in 1948). I will defy those who may think this is an exaggeration, to name a book on stock trades so accurate, so simple, so easy to read and so practical like this one. Based heavily (and quoting often) Warren Buffett's letters to shareholders, Howard Marks explains his experience, and success, through the main points on investment. However, the author stays blissfully away from platitudes and hollow comments: no shortcut-to-get-rich here, no false promises. Far from it, Mr Marks lists constantly what's needed to succeed in the stock markets: loads of common sense, patience, discipline and a sound investment strategy based on the investor's ultimate goals. Only Warren Buffett managed to say it shorter: "buy good stocks cheap".
    And at only 177 pages this "Most Important Thing" is an example that consistent messages (possibly must) be delivered in a short fashion - 95% of what's written about the stocks markets nowadays is a copy-and-paste or a bromide; most is showy and inflated with formulas only a few can understand. Mr Marks effortlessly makes all that literature futile by getting down to the point in every chapter and by not bloating the book with not even one mathematical formula. Those starting in the mysteries of buying and selling shares do have here a wonderful introduction and sound advice at a rate of, at least, one per page. Those out there with investment experience, will still learn something new, without a doubt.
    As a coda, I'll recommend three other books that, after Graham's Intelligent Investor and Marks'Most Important Thing, do supply with priceless lessons on shares investment (this is just a short comment, I've reviewed these books individually too):
    Peter Lynch: "One up on Wall Street". A lont-time successful fund manager, Mr Lynch is perhaps the most enthusiastic of writers on shares, and manages to transmit this enthusiasm without losing a bit of accuracy. This book is a bit dated. Published in 1989 the "big" companies were then General Elecric, Ford and the big tobacco and these firms are used for the many examples the book contains, but its lessons are as good and useful for the third second half of the XX century as they are now.
    John Bogle: "The little book of Common Sense investing". Very short, but packed with sound advice. Also a very successful fund manager, Mr Bogle wrote a pamphlet on staying away from fashions and "trends" - his theory is that following a stock index for decades may sound dull, but it is a guarantee of profit. With very good entries on dividends too.
    Philip Fisher: "Common stocks and Uncommon Profits". Even older than the previous two, this minor classic was published in 1960 (one of Mr Fisher's favorite stocks was Motorola, then a transistors maker). It is written in the elegantly sober style of the mid-century and it is full of investment wisdom. As with the previous other two books, it offers no miracle and it states often that investment is a long-term activity.
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  • Sandro0808
    5.0 out of 5 stars keine Bettlektüre
    Reviewed in Germany on May 7, 2022
    Verified Purchase
    es liest sich nicht so flüssig wie ein Roman. Kann man auch nicht erwarten. Dennoch sehr schön strukturiert, man muss vorher kein Experte sein, nachher ist man's. Bestimmt. Die Kernaussagen werden noch mal prägnant zusammengefasst. Ich werde dieses Buch immer wieder in die Hand nehmen. Je nach Bedarf.
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  • dbroch
    5.0 out of 5 stars Réflexion originale
    Reviewed in France on May 3, 2022
    Verified Purchase
    Très bon livre qui aborde des thèmes relativement inédit pour un investisseur : la psychologie détaillée du risque, le cycle du marché, l'impossibilité de mathématiser l'investissement, la fonction de la valeur intrinsèque comme repère etc.
    Fait partie de toute réflexion sérieuse sur l'investissement en bourse.
    Report

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