Appreciating The Role of Luck - from the book "The Most Important Thing Illuminated" by Howard Marks

1. We should spend our time trying to find value among the knowable- industries, companies and securities - rather than base our decisions on what we expect from the less- knowable macro world of economies and broad market performance.
2. Given that we don't know exactly which future will obtain, we have to get value on our side by having a stronger held, analytically derived opinion of it and buying for less when opportunities to do so present themselves.
3. We have to practice defensive investing, since many of the outcomes are likely to go against us. It's more important to ensure survival under negative outcomes than it is to guarantee maximum returns under favorable ones.
4. To improve our chances of success, we have to emphasize acting contrary to the herd when it's at extremes, being aggresive when the market is low and cautious when it's high.
5. Given the highly indetermine nature of outcomes, we must view strategies and their results- both good and bad - with suspicious until proved out over a large number of trials.