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The Most Important Thing by Howard Marks

Awareness Of The Pendulum

The mood swings of the securities markets resemble the swing of a pendulum. They swing between the following:

  • Between euphoria and depression
  • Between celebrating positive developments and obsessing over negatives
  • Between overpriced and underpriced

The main risks in investing:

1.The risk of losing money
2.The risk of missing opportunity


It is possible to largely eliminate either one, but not both.


Three stages of a bull market:

1.A few forward-looking people begin to believe things will get better.
2.Most investors realize improvement is taking place.
3.Everyone concludes things will get better forever.


Three stages of a bear market:

1.A few thoughtful investors recognize that, despite the prevailing bullishness, things won’t always be rosy.
2.Most investors realize things are deteriorating.
3.Everyone is convinced things can only get worse.


In the darkest times, it takes analytical ability, objectivity, resolve, and imagination to think things will ever get better. The few people who possess those qualities can make unusual profits with low risk.

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Jeremy Silva

Jeremy Silva lives near San Francisco with his wife and son. He is a writer, blogger, and personal investor. He is passionate about education, personal development, project management, and investing. His blog has over 100 book summaries on many topics including investing, self-help, and business. You can click on the link to read some interesting book summaries on Jeremy’s website (https://jsilva.blog/book-summaries/).