5. The Most Important Thing Is . . . Understanding Risk

Chapters in this book

1. Frontmatter i
2. Contents vii
3. Foreword ix
4. Introduction xi
5. 1. The Most Important Thing Is . . . Second-Level Thinking 1
6. 2. The Most Important Thing Is . . . Understanding Market Efficiency (and Its Limitations) 8
7. 3. The Most Important Thing Is . . . Value 19
8. 4. The Most Important Thing Is . . . The Relationship Between Price and Value 29
9. 5. The Most Important Thing Is . . . Understanding Risk 39
10. 6. The Most Important Thing Is . . . Recognizing Risk 57
11. 7. The Most Important Thing Is . . . Controlling Risk 71
12. 8. The Most Important Thing Is . . . Being Attentive to Cycles 81
13. 9. The Most Important Thing Is . . . Awareness of the Pendulum 89
14. 10. The Most Important Thing Is . . . Combating Negative Influences 97
15. 11. The Most Important Thing Is . . . Contrarianism 111
16. 12. The Most Important Thing Is . . . Finding Bargains 122
17. 13. The Most Important Thing Is . . . Patient Opportunism 131
18. 14. The Most Important Thing Is . . . Knowing What You Don’t Know 142
19. 15. The Most Important Thing Is . . . Having a Sense for Where We Stand 151
20. 16. The Most Important Thing Is . . . Appreciating the Role of Luck 161
21. 17. The Most Important Thing Is . . . Investing Defensively 171
22. 18. The Most Important Thing Is . . . Avoiding Pitfalls 185
23. 19. The Most Important Thing Is . . . Adding Value 201
24. 20. The Most Important Thing Is … Reasonable Expectations 209
25. 21. The Most Important Thing Is . . . Pulling It All Together 215
26. About the Contributors 225