The Most Important Thing

Library · Investing

• Author: Howard Marks
• FinSimLab rating: 5/5
• Reading: Moderate
• Finance level: Advanced
• Published: 2011

Ideas on risk, cycles and market psychology from the co-founder of Oaktree Capital.

What it covers

Marks gathers in short chapters what he sees as essential to investing: thinking differently from the consensus, understanding risk as the chance of losing money rather than volatility, recognising where the market stands in its cycle and avoiding mistakes before chasing spectacular wins. The book grew out of the memos he writes to his clients.

What you will learn

• Why risk is above all the chance of losing money.
• How cycles and market sentiment shape prices.
• What second-level thinking means before investing.

Who it is for

Investors with some experience who want to understand risk before chasing returns.

Concepts

Risk, Market cycles, Long term

What you will not learn

A method to pick assets or mechanical rules: it is a way of thinking about risk.

Related Academy guides

• What is risk tolerance in investing and why it matters
• Panic Selling: Why We Sell at the Worst Possible Moment
• Buying the Dip: How to Accumulate When Markets Fall
• How to analyse any investment: avoid mistakes and spot risks

Put it into practice

• Investment planner

More investing books

• The Intelligent Investor
• A Random Walk Down Wall Street
• The Little Book of Common Sense Investing
• The Simple Path to Wealth
• One Up On Wall Street
• Common Stocks and Uncommon Profits
• The Little Book That Beats the Market
• The Little Book of Valuation

Descriptions written by FinSimLab for educational purposes. They do not summarise the books and are not investment advice.