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

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xii I N T R O D U C T I O N tech- stock bubble in 2000– 2001; the accounting scandals of 2001– 2002; and the worldwide fi nancial crisis of 2007– 2008. Living through the 1970s was particularly formative, since so many challenges arose. It was virtually impossible to get an investment job during the seventies, meaning that in order to have experienced that de cade, you had to have gotten your job before it started. How many of the people who started by the sixties were still working in the late nineties when the tech bubble rolled around? Not many. Most professional investors had joined the industry in the eighties or nineties and didn’t know a market decline could exceed 5 percent, the greatest drop seen between 1982 and 1999. If you read widely, you can learn from people whose ideas merit pub- lishing. Some of the most important for me were Charley Ellis’s great article “Th Th , July- August 1975), A e Financial Analysts Journal e Loser’s Game” ( Short History of Financial Euphoria, by John Kenneth Galbraith (New York: Viking, 1990) and Nassim Nicholas Taleb’s Fooled by Randomness (New York: Texere, 2001). Each did a great deal to shape my thinking. Finally, I’ve been extremely fortunate to learn directly from some outstanding thinkers: John Kenneth Galbraith on human foibles; Warren Buff ett on patience and contrarianism; Charlie Munger on the importance of reasonable expectations; Bruce Newberg on “probability and outcome”; Michael Milken on conscious risk bearing; and Ric Kayne on setting “traps” (underrated investment opportunities where you can make a lot but can’t lose a lot). I’ve also benefi ted from my association with Peter Bern- stein, Seth Klarman, Jack Bogle, Jacob Rothschild, Jeremy Grantham, Joel Greenblatt, Tony Pace, Orin Kramer, Jim Grant and Doug Kass. Th e happy truth is that I was exposed to all of these elements and aware enough to combine them into the investment philosophy that has worked for my organizations— and thus for my clients— for many years. It’s not the only right one— there are lots of ways to skin the cat— but it’s right for us. I hasten to point out that my philosophy wouldn’t have meant much without skilled implementation on the part of my incredible Oaktree cofounders— Bruce Karsh, Sheldon Stone, Larry Keele, Richard Masson and Steve Kaplan— with whom I was fortunate to team up between 1983 and 1993. I’m convinced that no idea can be any better than the action taken on it, and that’s especially true in the world of investing. Th e philosophy I share here wouldn’t have attracted attention were it not for the accom- plishments of these partners and the rest of my Oaktree colleagues.

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