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

by Howard Marks

assumptions

tenuous:

most people are driven by greed, fear, envy and other emotions that render objectivity impossible and open the door for significant mistakes.

(a) significant misvaluations and (b) differences among participants in terms of skill, insight

“in every game there’s a fish. If you’ve played for 45 minutes and haven’t figured out who the fish is, then it’s you.”

“rebuttable

have mistakes and mispricings been driven out through investors’ concerted efforts, or do they still exist, and why?

proposition,

Abstention

it’s a question of balance, and balance comes from applying informed common sense. The key turning point in my investment management career came when I concluded that because the notion of market efficiency has relevance, I should limit my efforts to relatively inefficient markets where hard work and skill would pay off best.

theory should inform our decisions but not dominate them.

indispensable

buy at a price below intrinsic value, and sell at a higher price.

indispensable

those based on analysis of the company’s attributes, known as “fundamentals,” and those based on study of the price behavior of the securities themselves.

random walk hypothesis,

Eugene Fama.

stock’s past price movements are of absolutely no help in predict...

Likewise, the hypothesis says, the fact that a stock’s price has risen for the last ten days tells you nothing about what it will do tomorrow.

momentum investing.

wry

cerebral

day traders.

eschew

value investing and growth investing.

ephemeral

dull

plodding

adren...

That means by definition that there’s less emphasis on the company’s current attributes ...

Value investors buy stocks (even those whose intrinsic value may show little growth in the future) out of conviction that the current value is high relative to the current price. • Growth investors buy stocks (even those whose current value is low relative to their current price) because they believe the value will grow fast enough in the future to produce substantial appreciation.

the choice isn’t really between value and growth, but between value today and value tomorrow.

adherence

conjecture

squandered

Nifty Fifty,

fad

epito...

dictum

decimated

in the offing,

put up with

忍受

ent...

batting average

击球率

the upside potential for being right about growth is more dramatic, and the upside potential for being right about value

is more consistent. Value is my approach. In my book, consistency trumps drama.

discriminating

That’s because in the world of investing, being correct about something isn’t at all synonymous with being proved correct right away.

adages