The Most Important Thing Illuminated

The Library Essay

Second Thoughts Are the Job

Howard Marks, co-founder of Oaktree Capital, has written client memos since 1990, and Warren Buffett has said that when they arrive they are the first thing he reads. This book, first published in 2011, distils the memos into a connected account of Marks's discipline, second-level thinking that asks what the market has already priced, the primacy of risk over return, the patient opportunism that waits for cycles to overshoot.

The illuminated edition of 2013 adds marginal annotations from Marks himself and from fellow investors including Seth Klarman and Joel Greenblatt, a value investing text with commentary in the manner of older scriptures. The apt title is Marks's own admission; there turn out to be about twenty most important things, and controlling risk keeps ending up first among them.