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The Most Important Thing: Uncommon Sense for the Thoughtful Investor The Most Important Thing: Uncommon Sense for the Thoughtful Investor by Howard Marks
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“I like to say, “Experience is what you got when you didn’t get what you wanted.”
Howard Marks, The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor
“There are old investors, and there are bold investors, but there are no old bold investors.”
Howard Marks, The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor
“Prices are too high” is far from synonymous with “the next move will be downward.” Things can be overpriced and stay that way for a long time . . . or become far more so.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“We have to practice defensive investing, since many of the outcomes are likely to go against us. It’s more important to ensure survival under negative outcomes than it is to guarantee maximum returns under favorable ones.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“Investment success doesn’t come from “buying good things,” but rather from “buying things well.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“There’s a big difference between probability and outcome. Probable things fail to happen—and improbable things happen—all the time.” That’s one of the most important things you can know about investment risk.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“Voltaire: “The perfect is the enemy of the good.” This”
Howard Marks, The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor
“Here’s the key to understanding risk: it’s largely a matter of opinion.”
Howard Marks, The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor
“There’s only one way to describe most investors: trend followers. Superior investors are the exact opposite. Superior investing, as I hope I’ve convinced you by now, requires second-level thinking—a way of thinking that’s different from that of others, more complex and more insightful.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“The biggest investing errors come not from factors that are informational or analytical, but from those that are psychological. Investor”
Howard Marks, The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor
“Every once in a while, an up-or-down-leg goes on for a long time and/or to a great extreme and people start to say "this time it's different." They cite the changes in geopolitics, institutions, technology or behaviour that have rendered the "old rules" obsolete. They make investment decisions that extrapolate the recent trend. And then it turns out that the old rules still apply and the cycle resumes. In the end, trees don't grow to the sky, and few things go to zero.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“Being too far ahead of your time is indistinguishable from being wrong.” So”
Howard Marks, The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor
“Everything you needed to know in the years leading up to the crash could be discerned through awareness of what was going on in the present.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“If everyone likes it, it's probably because it has been doing well. Most people seem to think that outstanding performance to dates presages outstanding future performance. Actually, it's more likely that outstanding future performance to date has borrowed from the future and thus presages subpar performance from her on out.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“Selling for more than your asset’s worth. Everyone hopes a buyer will come along who’s willing to overpay for what they have for sale. But certainly the hoped-for arrival of this sucker can’t be counted on. Unlike having an underpriced asset move to its fair value, expecting appreciation on the part of a fairly priced or overpriced asset requires irrationality on the part of buyers that absolutely cannot be considered dependable.”
Howard Marks, The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor
“The most dangerous thing is to buy something at the peak of its popularity. At that point, all favourable facts and opinions are already factored into its price and no new buyers are left to emerge”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“Buying something for less than its value. In my opinion, this is what it’s all about—the most dependable way to make money. Buying at a discount from intrinsic value and having the asset’s price move toward its value doesn’t require serendipity; it just requires that market participants wake up to reality. When the market’s functioning properly, value exerts a magnetic pull on price.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“If one is approached with a deal predicated on cycles having ceased to occur, remember that invariably that’s a losing bet.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“There’s a big difference between probability and outcome. Probable things fail to happen—and improbable things happen—all the time.” That”
Howard Marks, The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor
“little known and not fully understood; fundamentally questionable on the surface; controversial, unseemly or scary; deemed inappropriate for “respectable” portfolios; unappreciated, unpopular and unloved; trailing a record of poor returns; and recently the subject of disinvestment, not accumulation.”
Howard Marks, The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor
“The correctness of a decision can’t be judged from the outcome. Nevertheless, that's how people assess it. A good decision is one that’s optimal at the time it’s made, when the future is by definition unknown. Thus, correct decisions are often unsuccessful, and vice versa.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“Risk is incredibly important to investors. It’s also ephemeral and unmeasurable. All of this makes it very hard to recognize, especially when emotions are running high. But recognize it we must.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“There's only one way to describe most investors: trend followers.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“The desire for more, the fear of missing out, the tendency to compare against others, the influence of the crowd and the dream of the sure thing—these factors are near universal. Thus they have a profound collective impact on most investors and most markets. The result is mistakes, and those mistakes are frequent, widespread and recurring.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“•Scepticism and pessimism aren’t synonymous. Scepticism calls for pessimism when optimism is excessive. But it also calls for optimism when pessimism is excessive.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“The process of intelligently building a portfolio consists of buying the best investments, making room for them by selling lesser ones, and staying clear of the worst.”
Howard Marks, The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor
“Once in a while, however, the future turns out to be very different from the past. It’s at these times that accurate forecasts would be of great value. It’s also at these times that forecasts are least likely to be correct. Some forecasters may turn out to be correct at these pivotal moments, suggesting that it’s possible to correctly”
Howard Marks, The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor
“We conclude that most of the time, the future will look a lot like the past, with both up cycles and down cycles. There is a right time to argue that things will be better, and that's when the market is on its backside and everyone is selling things at giveaway prices. It's dangerous when the market's at record levels to reach for a positive rationalisation that has never held true in the past.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“Prosperity brings expanded lending, which leads to unwise lending, which produces large losses, which makes lenders stop lending, which ends prosperity, and on and on. . . . Look around the next time there’s a crisis; you’ll probably find a lender.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
“Most people strive to adjust their portfolios based on what they think lies ahead. At the same time, however, most people would admit forward visibility just isn't that great. That's why I make the case for responding to the current realities and their implications, as opposed to expecting the future to be made clear.”
Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor

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