The Most Important Thing

Reviewed by Diario de un Inversor · UpdatedJune 13, 2026

Our review

Howard Marks has spent decades writing investment memos that the world's best fund managers read with devoted attention. «The Most Important Thing» distils that intellectual output into a single volume, organized around seventeen «most important» concepts — second-level thinking, understanding risk, market cycles, investor psychology — that Marks considers indispensable for sound investing. The underlying thesis is that markets are efficient enough to make beating them difficult, but imperfect enough to make it possible with second-level thinking: not asking whether a company is good, but whether the market is pricing it correctly given what everyone already knows. The treatment of risk is the book's most original chapter: Marks argues that risk is not volatility — the academic definition — but the possibility of permanent capital loss, and that this risk increases when prices rise, not when they fall. The annotated edition incorporates notes from Buffett, Klarman, and others, adding layers of perspective without increasing complexity.

Key takeaways

• Second-level thinking asks what others know and what is already priced in, not simply whether something is good or bad.
• Real investment risk is not volatility but the possibility of permanent capital loss — and that risk grows when prices are high.
• Market cycles are inevitable and unpredictable in their exact timing, but recognizable in their structure and psychology.
• The investor who understands where in the cycle they stand has an advantage over one who reacts only to recent price movements.

Fact

Howard Marks is co-founder of Oaktree Capital Management, which manages assets of over $150 billion. The book was published in 2011.