Value Investing World

Monday, May 9, 2011

Book Excerpt: The Most Important Thing Is... Appreciating the Role of Luck - By Howard Marks

Via Value Investing Letter.

The investment world is not an orderly and logical place where the future can be predicted and specific actions always produce specific results. The truth is, much in investing is ruled by luck. Some may prefer to call it chance or randomness, and those words do sound more sophisticated than luck. But it comes down to the same thing: a great deal of the success of everything we do as investors will be heavily influenced by the roll of the dice.

To fully explore the notion of luck, in this chapter I want to advance some ideas expressed by Nassim Nicholas Taleb in his book Fooled by Randomness. Some of the concepts I explore here occurred to me before I read it, but Taleb’s book put it all together for me and added more. I consider it one of the most important books an investor can read.

………………..

Related books:

The Most Important Thing

Fooled by Randomness

Related link: Howard Marks' 2011 Value Investing Congress Speech

Posted by Joe at 5/09/2011
Labels: Howard Marks
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Value Investing World is a blog dedicated to promoting the multidisciplinary approach to investing and development of – as Charlie Munger describes it – a latticework of mental models. Although largely focused on linking to investing and economic material it deems of interest, it will also post and link to material from other disciplines that it thinks worth reading or watching.

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  • 2007 and 2009 Interviews with Peter Bevelin
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My Favorite (and biased) Non-Investing Related Site

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  • Interview with Peter Bevelin, author of Seeking Wisdom - from Darwin to Munger
  • Second Interview with Peter Bevelin
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  • Dr. Peter Drucker: FEEDBACK: KEY TO CONTINUOUS LEARNING
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Charlie Munger

  • Poor Charlie's Almanack
  • The Best of Charlie Munger: 1994-2011
  • VIDEO: Charlie Munger - USC Law School Commencement - May 13, 2007
  • NOTES: Charlie Munger - USC Law School Commencement - May 13, 2007
  • Charlie Munger's "The Psychology of Human Misjudgment"

Warren Buffett

  • Warren Buffett's Letters to Berkshire Shareholders
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Ben Franklin

  • Ben Franklin's 13 Virtues
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Benjamin Graham

  • The Papers of Benjamin Graham (PDF)
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  • Securities in an Insecure World (1963 Speech)

Peter Bevelin

  • 2007 and 2009 interviews with Peter Bevelin
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  • PDF of Peter Bevelin interviews (2007 and 2009 with Value Investing World; 2016 with Farnam Street)

Howard Marks

  • Howard Marks memos
  • Compilation: Howard Marks Memos from 1990 - July 2011
  • Book: The Most Important Thing
  • Book: Mastering the Market Cycle

Seth Klarman

  • Seth Klarman Letters: 1995 - mid 2001
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Michael Mauboussin

  • Measuring the Moat
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  • What Does a Price-Earnings Multiple Mean?
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  • Capital Allocation
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  • Operating Leverage

Diversification

  • Warren Buffett on Diversification - 1966
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Checklists

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  • Key Checklist Items

Expert Performance / Self-Improvement

  • Bill Gates quote from Charlie Rose interview (or, how the world's best companies are built by fanatics)
  • Dr. Peter Drucker: FEEDBACK: KEY TO CONTINUOUS LEARNING
  • What it takes to be great

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