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The Most Important Thing by Howard Marks

Patient Opportunism

There aren’t always great things to do. Sometimes we maximize our contribution by being discerning and relatively inactive. Patient opportunism, waiting for bargains, is often your best strategy.


You’ll do better if you wait for investments to come to you, rather than go chasing after them.


You tend to get better buys if you select from the list of things sellers are motivated to sell, rather than start with a fixed notion of what you want to own.


It is essential for investment success that we recognize the condition of the market and decide on our actions accordingly. The other possibilities are:

  1. Acting without recognizing the market’s status.
  2. Acting with indifference to the market’s status.
  3. Believing we can somehow change the market’s status.

These options are most unwise.


Missing a profitable opportunity is of less significance than investing in a loser.


You cannot insist on producing high returns in low-return environments. You simply cannot create investment opportunities when they are not there.


When prices are high, it is inescapable that prospective returns are low and risks are high.


The absolute best buying opportunities come when asset holders are forced to sell.


From time to time, holders become forced sellers for reasons like these:

  • The funds they manage experience withdrawals
  • Their portfolio holdings violate investment guidelines such as minimum credit ratings or position maximums.
  • They receive margin calls because the value of their assets fails to satisfy requirements agreed to in contracts with their lenders.

Forced sellers have no choice, they have to sell regardless of price.


The key during a crisis is to be:

  1. Insulated from the forces that require selling.
  2. Positioned to be a buyer instead.

To satisfy these criteria, an investor needs the following things:

  1. Staunch reliance on value.
  2. Little or no use of leverage.
  3. Long-term capital.
  4. A strong stomach.

Patient opportunism, buttressed by a contrarian attitude and a strong balance sheet, can yield amazing profits during meltdowns.

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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/).