Second-Level Thinking

“First-level thinking is simplistic and superficial, and just about everyone can do it (a bad sign for anything involving an attempt at superiority). Second-level thinking is deep, complex and convulated. The second-level thinker takes a great many things into account.” - Howard Marks

Second-level thinkers question everything and try to find out causes and effects beyond what is available on the surface. Second-level thinking is essential to generate superior performance in the market. One has to be contrarian and right to achieve greater return than the market. It’s a rare skill. Second-level thinking can aid to the pursuit. Prevalence of first-level thinkers in the market offers advantages to those who can practice second-level thinking.