Second-level thinking is a deep and complex approach to decision-making that goes beyond superficial analysis. Second-level thinkers ask probing questions and consider multiple perspectives to gain a more comprehensive understanding of a situation. They examine a range of potential outcomes, assess probabilities and compare their views to the consensus. They uncover insights that others may overlook, allowing them to make more informed decisions and achieve superior results. By thinking unconventionally and holding well-reasoned, non-consensus views, second-level thinkers position themselves to succeed in investing, business and life.
But how do they do it? Howard Marks is the Chairman and cofounder of Oaktree Capital Management and one of the finest purveyors of second-level thinking (sometimes referred to as second-order thinking). In his book The Most Important Thing: Uncommon Sense for the Thoughtful Investor, Marks explains why second-level thinking is so important and how you can get better at it.
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