Howard Marks, co-founder of Oaktree Capital Management, distills his investment philosophy in this highly regarded work that draws from twenty years of his celebrated investor memos. The "illuminated" edition includes commentary from other respected investors including Warren Buffett, Christopher Davis, and Joel Greenblatt, adding additional perspectives to Marks's already rich analysis. The book's central concept is "second-level thinking" — the discipline of going beyond the obvious consensus view to ask not just whether a company is good, but whether it is better than the market currently believes it to be, and by how much. Marks argues that successful investing requires an accurate assessment of intrinsic value, the patience and discipline to buy only at a significant discount to that value, and the psychological fortitude to act contrarily when conventional wisdom has driven prices to extremes in either direction. He covers risk in unusual depth, distinguishing between the probability of loss and the magnitude of loss, and emphasizing that risk control and loss avoidance are far more important to long-term results than brilliant security selection. One of the most thoughtful and intellectually honest accounts of professional money management ever written.