This was an excellent book on core principles and ideas underlying investing. It is not a book on any particular investing strategy, but rather a book on his philosophy of investing, learned over the years from experience, from books, from experts he knows, and through supporting clients.
It is structured as 18 chapters, each reflecting on a different aspect of investing … each of which is the next “most important thing.” Because, he says, ALL the “things” in the book are important.
It covers topics such as what risk really is (his notion of risk a much more perceptive and useful idea than the unhelpful nonsense from finance theory, where risk is defined as market volatility), or how to identify value.
The book is targeted more towards active investors who want to deliver superior performance than market indexes (i.e. significantly beat market averages), which is of course is hard to do. To achieve this, he says, investors need to have uncommon insight or “second level thinking,” and to form a clear understanding of value (so that one can understand the relationship of price to value in the context of any risks).
If you don’t want to pursue above average performances, he points out, you’d be better off investing in an index fund (or, nowadays, its ETF equivalent) - which out-performs around 90% of active fund managers anyway.
Outperforming the market index is a “big freaking deal,” which few investors do successfully or consistently. He offers a philosophy for key things to understand and reflect on if you want to go down that path … or if you want to be a better investor in general.
I recommend the book.
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Popular Highlights in this book
“Experience is what you got when you didn’t get what you wanted.”Highlighted by 566 Kindle readers- All investors can’t beat the market since, collectively, they are the market.Highlighted by 431 Kindle readers
- The discipline that is most important is not accounting or economics, but psychology.Highlighted by 368 Kindle readers
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This book is a rare Gem! Even Warren Buffett agrees. I’m transfixed, life changer. Foundational.
To all value investors, here is that rare Gem, something everyone should read as 2021 begins! The clarity and the wisdom that it presents is amazing. When I read Warren Buffets recommendation for this book I knew it was going to be an extremely valuable read, and I wasn’t disappointed. Howard Marks is the real deal. This book is for anyone who attempts to put the odds of risk in their favor as much as possible, and as much as can be done knowing the uncertainty of looking into the future. Book is written with such rational reason and balance, not with hype or get rich undertones. Some reviews say that it is repetitive, I strongly disagree! Anyone who invests, or is in business, HAS to have a strong sense of WHO HE IS. Everyone must have cornerstones to their business strategy and his cornerstones are so foundational, that he so generously shares with us, you can follow his thinking, I'm sure its the exact same as he evaluates any given investment.These precious principles are exactly where he starts his evaluations. This should be an absolute corner stone of anyone’s investment foundational thinking.Also this wisdom is FULLY transferable into my profession which is commercial real estate. I like to tell people that my business is risk evaluation when they ask what I do. In effect, My business amounts to nothing more than risk evaluation. The similarities are astounding.
Top reviews from other countries
Michael Kurkdjian
An excellent common sense investing book a lot of information on how to get better
Reviewed in Canada on February 21, 2023Harsh Goyal
Book is very much behavior therapy.
Reviewed in India on August 28, 2024
Robert ‘Bob’ Macespera
A superb lesson on investing
Reviewed in the United Kingdom on February 20, 2023
