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jonsploder's review against another edition
4.0
Very simple language which is clearly written which I’m a big fan of. Despite simplicity, thought provoking. However some of it was repetitive. Absolutely do recommend any investor to read it, it’s a quick and easy read
russlancaster's review against another edition
5.0
One of the most insightful books written on investing and critical thinking.
boenguen's review against another edition
3.0
This is an interesting insight into Marks’ investing philosophy , though perhaps a bit repetitive. My biggest gripe with this book is that in 180 pages (containing excerpts from almost 30 years of memos), Marks quotes ca. 50 men, ranging from philosophers to famous investors and from historians to athletes; but he does not quote a single woman, nor does he list one as one of his influences. Really? Not once in his almost 75 years on earth has he come across something interesting a woman has said?
davidlz1's review against another edition
4.0
I rated this book a 4 because it really is an insightful compilation of investing information. For the layperson like myself, it is good information to know when considering who is investing your money; especially if you go beyond passive/index investing. However, as I am a client, the lessons are not directed at me. There is nothing I will actively do with this information other than consider the people or companies I choose to invest my money for me. It is a rather short book but it is packed solid with information. Therefore, this will not be a speedy read. I think there were maybe three graphs presented. The rest of the pages were filled with nothing more than words. There is not even an index to take up filler. It is solid 180 pages of reading.
gvenezia's review against another edition
3.0
This book belongs in a waiting room at Berkshire Hathaway. For one, the terse, conversational style welcomes idle perusing. The book also aligns with classic value investment philosophy. In fact, Warren Buffet encouraged Marks to write it much sooner than originally intended. These few points are likely all one needs to assess whether to read Marks's book. For many—either those already enmeshed in value investing or those who have no interest—this book is not going to be particularly interesting or insightful. For those looking for a relatively recent value investing perspective from a legendary investor, this book provides an interesting (if repetitive) reference.
To be clear, there's not a compelling reason to buy this book. All of the source material and the general ideas are available for free on Oaktree's website. Furthermore, the charisma and wit of Howard Marks is better experienced through the many interviews and public talks available online. There's only marginal interest and utility in seeing how Marks organizes his memos and lifelong insight into general themes/chapters.
That being said, I enjoyed the book. No doubt a large part of the reason I enjoyed it was the context I read it in. First of all, there is the recent 2020 market crash. Marks' frequent allusions to the 2008 financial crisis proves useful for comparison.
Secondly, I read it alongside the 1973 version of Benjamin Graham's classic, The Intelligent Investor (with Jason Zweig's updated commentary written in 2003). Graham gives a comprehensive, beginner friendly view of value investing philosophy, market psychology, and basic market and security analysis. Graham's efforts prepare the reader to get something out of Marks's relatively cursory insights. Marks's writing is less pedagogical and omits any serious market or security analysis. Part of Mark's intention with the book is to show how difficult and complex investing can be, but without actual examples, the situation might actually appear less complex since Marks distills complex considerations down to basic ideas like risk and contrarianism. Furthermore—and by his own reasoning—Marks's insights are only as valuable as his historic returns, but no analysis of Marks's or Oaktree's portfolio is included. So by itself, "The Most Important Thing" can't accomplish much and relies heavily on supplementary reading like Graham. Even then, Marks repeats much of the conventional wisdom, although his formulations of central value investing concepts—like value, risk, and luck—feel fresher and more applicable to a contemporary audience than Graham's.
Unfortunately, Marks's fresh, conversational style often goes too far. Every other page includes a sentence which has to be reread in order to clarify the point or intended emphasis. Dependent clauses written as standalone sentences. And as are unconventional transitional phrases. Or, a counterpoint. Yes—this is not how an em dash is to be used for that unspecified thing.
Additionally, the book contains a lot of repetition between chapters. I realize that Marks's intention was to edit his memos into a book format and to show that there is no one most important thing, but the repetition and lack of editing cuts against his usual terseness and wit. And while I can't argue that there is one most important thing, the frequent connections between themes suggest a shorter list than what Marks provides.
At his best, Marks recontextualizes recent market events using classic value investing advice with a tinge of insightful irony. These are the book's most compelling assets. If anyone was still on the fence about reading Marks, the quotes below give a good idea of Marks's typical observations and will hopefully sway the decision.
——
Favorite Quotes
Good times teach only bad lessons: that investing is easy, that you know its secrets, and that you needn't worry about risk (xi).
You'll often find that you've bought in the midst of a decline that continues. Pretty soon you'll be looking at losses. And as one of the greatest investment adages reminds us, "Being too far ahead of your time is indistinguishable from being wrong" (22)
An accurate opinion on valuation, loosely held, will be of limited help. An incorrect opinion on valuation, strongly held, is far worse (23)
Like opportunities to make money, the degree of risk present in a market derives from the behavior of the participants, not from the securities, strategies and institutions. Regardless of what's designed into market structures, risk will be low only if investors behave prudently (49)
People vastly overestimate their ability to recognize risk and underestimate what it takes to avoid it; thus, they accept risk unknowingly and in so doing contribute to its creation (55)
Loss is what happens when risk meets adversity (58)
Controlling the risk in your portfolio is a very important and worthwhile pursuit. The fruits, however, come only in the form of losses that don't happen. Such what-if calculations are difficult in placid times (61).
• Rule number one: most things will prove to be cyclical
• Rule number two: some of the greatest opportunities for gain and loss come when other people forget rule number one
(67)
Even if you do everything right, other investors can ignore your favorite stock; management can squander the company's opportunities; governments can change the rules; or nature can serve up a catastrophe (142)
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 behavior and thus alter the environment (155)
When there's nothing particularly clever to do, the potential pitfall lies in insisting on being clever (165)
To be clear, there's not a compelling reason to buy this book. All of the source material and the general ideas are available for free on Oaktree's website. Furthermore, the charisma and wit of Howard Marks is better experienced through the many interviews and public talks available online. There's only marginal interest and utility in seeing how Marks organizes his memos and lifelong insight into general themes/chapters.
That being said, I enjoyed the book. No doubt a large part of the reason I enjoyed it was the context I read it in. First of all, there is the recent 2020 market crash. Marks' frequent allusions to the 2008 financial crisis proves useful for comparison.
Secondly, I read it alongside the 1973 version of Benjamin Graham's classic, The Intelligent Investor (with Jason Zweig's updated commentary written in 2003). Graham gives a comprehensive, beginner friendly view of value investing philosophy, market psychology, and basic market and security analysis. Graham's efforts prepare the reader to get something out of Marks's relatively cursory insights. Marks's writing is less pedagogical and omits any serious market or security analysis. Part of Mark's intention with the book is to show how difficult and complex investing can be, but without actual examples, the situation might actually appear less complex since Marks distills complex considerations down to basic ideas like risk and contrarianism. Furthermore—and by his own reasoning—Marks's insights are only as valuable as his historic returns, but no analysis of Marks's or Oaktree's portfolio is included. So by itself, "The Most Important Thing" can't accomplish much and relies heavily on supplementary reading like Graham. Even then, Marks repeats much of the conventional wisdom, although his formulations of central value investing concepts—like value, risk, and luck—feel fresher and more applicable to a contemporary audience than Graham's.
Unfortunately, Marks's fresh, conversational style often goes too far. Every other page includes a sentence which has to be reread in order to clarify the point or intended emphasis. Dependent clauses written as standalone sentences. And as are unconventional transitional phrases. Or, a counterpoint. Yes—this is not how an em dash is to be used for that unspecified thing.
Additionally, the book contains a lot of repetition between chapters. I realize that Marks's intention was to edit his memos into a book format and to show that there is no one most important thing, but the repetition and lack of editing cuts against his usual terseness and wit. And while I can't argue that there is one most important thing, the frequent connections between themes suggest a shorter list than what Marks provides.
At his best, Marks recontextualizes recent market events using classic value investing advice with a tinge of insightful irony. These are the book's most compelling assets. If anyone was still on the fence about reading Marks, the quotes below give a good idea of Marks's typical observations and will hopefully sway the decision.
——
Favorite Quotes
Good times teach only bad lessons: that investing is easy, that you know its secrets, and that you needn't worry about risk (xi).
You'll often find that you've bought in the midst of a decline that continues. Pretty soon you'll be looking at losses. And as one of the greatest investment adages reminds us, "Being too far ahead of your time is indistinguishable from being wrong" (22)
An accurate opinion on valuation, loosely held, will be of limited help. An incorrect opinion on valuation, strongly held, is far worse (23)
Like opportunities to make money, the degree of risk present in a market derives from the behavior of the participants, not from the securities, strategies and institutions. Regardless of what's designed into market structures, risk will be low only if investors behave prudently (49)
People vastly overestimate their ability to recognize risk and underestimate what it takes to avoid it; thus, they accept risk unknowingly and in so doing contribute to its creation (55)
Loss is what happens when risk meets adversity (58)
Controlling the risk in your portfolio is a very important and worthwhile pursuit. The fruits, however, come only in the form of losses that don't happen. Such what-if calculations are difficult in placid times (61).
• Rule number one: most things will prove to be cyclical
• Rule number two: some of the greatest opportunities for gain and loss come when other people forget rule number one
(67)
Even if you do everything right, other investors can ignore your favorite stock; management can squander the company's opportunities; governments can change the rules; or nature can serve up a catastrophe (142)
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 behavior and thus alter the environment (155)
When there's nothing particularly clever to do, the potential pitfall lies in insisting on being clever (165)
luigi_hcm's review against another edition
4.0
Well written although a bit repetitive within each chapter