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The Most Important Thing: Uncommon Sense for the Thoughtful Investor resources

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x I N T R O D U C T I O N the idea of the most important things— each is a brick in what I hope will be a solid wall, and none is dispensable. I didn’t set out to write a manual for investing. Rather, this book is a statement of my investment philosophy. I consider it my creed, and in the course of my investing career it has served like a religion. Th ese are the things I believe in, the guideposts that keep me on track. Th e messages I deliver are the ones I consider the most lasting. I’m confi dent their rele- vance will extend beyond today. You won’t fi ere’s no surefi re recipe for nd a how- to book here. Th investment success. No step- by- step instructions. No valuation formulas containing mathematical constants or fi xed ratios— in fact, very few num- bers. Just a way to think that might help you make good decisions and, perhaps more important, avoid the pitfalls that ensnare so many. It’s not my goal to simplify the act of investing. In fact, the thing I most want to make clear is just how complex it is. Th ose who try to simplify in- vesting do their audience a great disser vice. I’m going to stick to general thoughts on return, risk and pro cess; any time I discuss specifi c asset classes and tactics, I do so only to illustrate my points. A word about the or ga ni za tion of the book. I mentioned above that successful investing involves thoughtful attention to many areas simulta- neously. If it were somehow possible to do so, I would discuss all of them at once. But unfortunately the limitations of language force me to take one topic at a time. Th us I begin with a discussion of the market environment in which investing takes place, to establish the playing fi en I go on eld. Th to discuss investors themselves, the elements that aff ect their investment success or lack of it, and the things they should do to improve their chances. Th nal chapters are an attempt to pull together both groups of ideas into a summation. Because my philosophy is “of a piece,” however, some ideas are relevant to more than one chapter; please bear with me if you sense repetition. I hope you’ll fi nd this book’s contents novel, thought provoking and perhaps even controversial. If anyone tells me, “I so enjoyed your book; it bore out everything I’ve ever read,” I’ll feel I failed. It’s my goal to share ideas and ways of thinking about investment matters that you haven’t come across before. Heaven for me would be seven little words: “I never thought of it that way.” In par tic u lar, you’ll fi nd I spend more time discussing risk and how to limit it than how to achieve investment returns. To me, risk is the most interesting, challenging and essential aspect of investing.

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