The author of the book The Most Important Thing, Howard Marks, is no ordinary investor. Marks has an exemplary history of exposure to the financial world especially in the field of debt investing. Before co-founding Oaktree Capital Management,Marks was a VP and PM at Citicorp, CIO for Domestic Fixed Income at TCW and President at TCW Asset Management Company. Today, running Oaktree, Marks manages over $80 billion invested in mostly in high yield and convertibles.
While, many good books are constantly being published, this one really caught my attention. The book received praise from Warren Buffett, Joel Greenblatt, Seth Klarman, Jeremy Grantham and John Bogle; I do not think you can get a much better line-up than that.
Marks' memos to his clients are valued as a constructive source of guidance by the players of the financial world, especially the value investors. Thus, his book, which is an insightful compilation of his memoirs and beliefs, draws attention from various existing and potential investors. By reading the book, the concept behind his investment philosophy, or ‘religion’ as Marks puts it, is inculcated within the minds of the reader as it is explained through coherent illustrations of his investment experiences. He seeks to help the readers understand the perils associated with investment and explicates the strategic techniques necessary for successful investment.
Some might argue that the title of the book ‘The Most Important Thing’ is misleading as there is no one particular ‘thing’ which can help investors succeed neither is there a specific order of priority or preference given to any of the 18 most important factors elaborated by Howard Marks in the book. But it should be understood that ‘The Most Important Thing’ refers to the investment philosophy of Marks and not the elements discussed in the book that develop the philosophy within the minds of the readers. Without the elaboration of those 18 elements it would be impossible for an individual with no prior knowledge of his work or of the core concepts related to investments, to comprehend the investment philosophy.
Another criticism that the book received was that it did not contain any fresh content but was rather a compilation of Howard Marks past work and that the content of the book revolved around basic conventional concepts of investment. To counter the criticism, it is necessary to realize that the book aims at highlighting his philosophy regarding investment through illustrations of his past experiences and discussions of his beliefs. As mentioned before, the book is more of a memoir; it is by no means one of those handbooks which preach the shortcuts to becoming a successful investor. This book does not explain how to outperform the market, or any magic formulas to succeed in investing. If you are looking for that, this is not the book for you.
There are two themes present which are representative of the gist of the entire book. First is the concept of first-level thinkers and second-level thinkers. First level thinkers are those individuals who are least observant of the events occurring around them and do not smartly gain knowledge of the lessons that could be deducted from past happenings. Second-level thinkers, on the other hand, are those who reflect back on their past experiences and observations of historic events. They are contrarians who ponder over and take an opposing stand against popular beliefs regarding investment opportunities, associated risks and probabilities in aims of being ‘different and better’ than the rest. According to Marks, these are the individuals who succeed in the financial world and receive consistent superior returns on their investments.
The second theme that dominates throughout the book is the notion of the cyclical nature of the financial markets. His discussion regarding the significance of history and repetitive nature of history in the financial world is similar to the theory put forward by Warren Buffett. According to Buffett, most things in the financial market would prove to be recurring and the individuals who forget this fact create opportunities for others to gain and thrive in the financial world. Howard Marks, all through the book, especially in the initial chapters illustrates the importance of the understanding of this cyclic nature and the fact that busts and booms are inevitable in the financial market, thus the aim of the investors should be to benefit as much as possible from the boom and escape the bust with minimum loss.
All things considered, the book is a very enlightening read for potential or inexperienced investors who would like to get an idea of the structure of the financial world. The book is Howard Marks’ candid elaboration of his investment choices and the mistakes made along the way to illustrate the importance of critical thinking, risk assessment and adopting appropriate investment strategy in various situations by learning from the past. Consequently, even experienced investors can benefit from the expertise of Howard Marks and find the book an expounding read.
To purchase the book on Amazon.com, click on the following link-_The Most Important Thing: Uncommon Sense for the Thoughtful Investor
Disclosure: I receive free books from book publishers and authors asking me to review them. In addition I sometimes request specific books that look interesting. I try to review the books that I think will be the most interesting. I have a material connection because I received a free copy of this book from the publisher. In addition I receive a small commission if you click on the above link and buy the book (or anything else) from Amazon.com. However, it does not cost you a penny more.
Also check out:
While, many good books are constantly being published, this one really caught my attention. The book received praise from Warren Buffett, Joel Greenblatt, Seth Klarman, Jeremy Grantham and John Bogle; I do not think you can get a much better line-up than that.
Marks' memos to his clients are valued as a constructive source of guidance by the players of the financial world, especially the value investors. Thus, his book, which is an insightful compilation of his memoirs and beliefs, draws attention from various existing and potential investors. By reading the book, the concept behind his investment philosophy, or ‘religion’ as Marks puts it, is inculcated within the minds of the reader as it is explained through coherent illustrations of his investment experiences. He seeks to help the readers understand the perils associated with investment and explicates the strategic techniques necessary for successful investment.
Some might argue that the title of the book ‘The Most Important Thing’ is misleading as there is no one particular ‘thing’ which can help investors succeed neither is there a specific order of priority or preference given to any of the 18 most important factors elaborated by Howard Marks in the book. But it should be understood that ‘The Most Important Thing’ refers to the investment philosophy of Marks and not the elements discussed in the book that develop the philosophy within the minds of the readers. Without the elaboration of those 18 elements it would be impossible for an individual with no prior knowledge of his work or of the core concepts related to investments, to comprehend the investment philosophy.
Another criticism that the book received was that it did not contain any fresh content but was rather a compilation of Howard Marks past work and that the content of the book revolved around basic conventional concepts of investment. To counter the criticism, it is necessary to realize that the book aims at highlighting his philosophy regarding investment through illustrations of his past experiences and discussions of his beliefs. As mentioned before, the book is more of a memoir; it is by no means one of those handbooks which preach the shortcuts to becoming a successful investor. This book does not explain how to outperform the market, or any magic formulas to succeed in investing. If you are looking for that, this is not the book for you.
There are two themes present which are representative of the gist of the entire book. First is the concept of first-level thinkers and second-level thinkers. First level thinkers are those individuals who are least observant of the events occurring around them and do not smartly gain knowledge of the lessons that could be deducted from past happenings. Second-level thinkers, on the other hand, are those who reflect back on their past experiences and observations of historic events. They are contrarians who ponder over and take an opposing stand against popular beliefs regarding investment opportunities, associated risks and probabilities in aims of being ‘different and better’ than the rest. According to Marks, these are the individuals who succeed in the financial world and receive consistent superior returns on their investments.
The second theme that dominates throughout the book is the notion of the cyclical nature of the financial markets. His discussion regarding the significance of history and repetitive nature of history in the financial world is similar to the theory put forward by Warren Buffett. According to Buffett, most things in the financial market would prove to be recurring and the individuals who forget this fact create opportunities for others to gain and thrive in the financial world. Howard Marks, all through the book, especially in the initial chapters illustrates the importance of the understanding of this cyclic nature and the fact that busts and booms are inevitable in the financial market, thus the aim of the investors should be to benefit as much as possible from the boom and escape the bust with minimum loss.
All things considered, the book is a very enlightening read for potential or inexperienced investors who would like to get an idea of the structure of the financial world. The book is Howard Marks’ candid elaboration of his investment choices and the mistakes made along the way to illustrate the importance of critical thinking, risk assessment and adopting appropriate investment strategy in various situations by learning from the past. Consequently, even experienced investors can benefit from the expertise of Howard Marks and find the book an expounding read.
To purchase the book on Amazon.com, click on the following link-_The Most Important Thing: Uncommon Sense for the Thoughtful Investor
Disclosure: I receive free books from book publishers and authors asking me to review them. In addition I sometimes request specific books that look interesting. I try to review the books that I think will be the most interesting. I have a material connection because I received a free copy of this book from the publisher. In addition I receive a small commission if you click on the above link and buy the book (or anything else) from Amazon.com. However, it does not cost you a penny more.
Also check out:
