Quote · My First Million
Howard Marks: how I make money while you worry about a market crash
Where this was said
Second Level Thinking
At 8:47 · chapter starts 8:26
Shaan Puri presses Marks on something he read in one of Marks' books: 'I can make someone better, but I don't think I can make them great.' Marks explains that the first chapter of 'The Most Important Thing' is about second-level thinking — the need to have a variant perception, a view that diverges from the consensus of investors, and then to be right about it. He is unambiguous: he can teach someone why second-level thinking matters, but he cannot teach them how to have correct contrarian views. 'In basketball, there's a saying, you can't coach height. And I think there's something called insight.' He then raises the looming AI question: when AI achieves artificial general intelligence — the ability to do everything a human can do — will it be able to replicate this kind of insight? He genuinely doesn't know. [1] — Howard Marks "Second-level thinking means seeing something different from the consensus — a variant perception — and being right about it. You can teach …" 08:28
Howard Marks says second-level thinking — having a variant perception from the market consensus and betting on it correctly — is more innate than teachable, similar to how you can't coach height in basketball.
Second-level thinking means seeing something different from the consensus — a variant perception — and being right about it. You can teach someone why it matters, but you can't teach them how to have it. It's like insight: either you have it, or you don't.
