The Most Important Thing Quotes

“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.”
― Howard Marks, The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor

“Will Rogers said, “You’ve got to go out on a limb sometimes because that’s where the fruit is.” None of us is in this business to make 4 percent.”
― Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor

“I’m convinced that no idea can be any better than the action taken on it,”
― Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor

“If your behavior is conventional, you’re likely to get conventional results—either good or bad. Only if your behavior is unconventional is your performance likely to be unconventional, and only if your judgments are superior is your performance likely to be above average.”
― Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor

“Here’s the key to understanding risk: it’s largely a matter of opinion. It’s hard to be definitive about risk, even after the fact. You”
― Howard Marks, The Most Important Thing Illuminated: 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

“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

“Being too far ahead of your time is indistinguishable from being wrong.”
― Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor

“when risk bearing doesn’t work, it really doesn’t work, and people are reminded what risk’s all about.”
― Howard Marks, The Most Important Thing Illuminated: 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

“•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

“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

“To improve our chances of success, we have to emphasize acting contrary to the herd when it’s at extremes, being aggressive when the market is low and cautious when it’s high.”
― Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor

“The safest and most potentially profitable thing is to buy something when no one likes it. Given time, its popularity, and thus its price, can only go one way: up.”
― Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor

“No asset class or investment has the birthright of a high return. It’s only attractive if it’s priced right.”
― Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor

“You can’t do the same things others do and expect to outperform. . . .”
― Howard Marks, The Most Important Thing: Uncommon Sense for The Thoughtful Investor

“Thus, the investor’s time is better spent trying to gain a knowledge advantage regarding “the knowable”: industries, companies and securities. The more micro your focus, the greater the likelihood you can learn things others don’t.”
― Howard Marks, The Most Important Thing Illuminated: 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

“the risk-free rate should be normalized in some way before being used to assess riskier investments.”
― Howard Marks, The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor

“The best foundation for a successful investment—or a successful investment career—is value. You must have a good idea of what the thing you’re considering buying is worth. There are many components to this and many ways to look at it. To oversimplify, there’s cash on the books and the value of the tangible assets; the ability of the company or asset to generate cash; and the potential for these things to increase.”
― Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor

“Achieving gains usually has something to do with being right about events that are on the come, whereas losses can be minimized by ascertaining that tangible value is present, the herd’s expectations are moderate and prices are low. My experience tells me the latter can be done with greater consistency.”
― 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

“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

“In good years, defensive investors have to be content with the knowledge that their gains, although perhaps less than maximal, were achieved with risk protection in place, even though it turned out not to be needed.”
― Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor

“It's worth noting that the assumption that something can't happen has the potential to make it happen, since people who believe it can't happen will engage in risky behaviour, and thus alter the environment.”
― Howard Marks, The Most Important Thing: 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

“This paradox exists because most investors think quality, as opposed to price, is the determinant of whether something's risky. But high quality assets can be risky, and low quality assets can be safe. It's just a matter of the price paid for them...Elevated popular opinion, then, isn't just the source of low return potential, but also of high risk.”
― Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor

“Risk arises as investor behaviour alters the market. Investors bid up assets, accelerating into the present appreciation that otherwise would have occurred in the future, and thus lowering prospective returns. The ultimate irony lies in the fact that the reward for taking incremental risk shrinks as more people move to take it.”
― Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor

“In bubbles, infatuation with market momentum takes over from any notion of value and fair price, and greed (plus the pain of standing by as others make seemingly easy money) neutralises any prudence that might otherwise hold sway.”
― Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor

“An accurate opinion on valuation, loosely held, will be of limited help. An incorrect opinion on valuation, strongly held, is far worse. This one statement shows how hard it is to get it all right.”
― Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor