Mastering The Market Cycle – ValueWalk Premium
Mastering The Market Cycle

Mastering The Market Cycle

Economies, companies, and markets operate according to patterns or cycles. These cycles arise from naturally occurring phenomena in everyday business, and to a large extent, from the simple ups and downs of human psychology and behavior. When should you pull out of the market? When should you stay in?

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If you study past cycles, understand their origins and remain alert for the next one, you will become keenly attuned to the investment environment as it changes. You’ll be aware and prepared while others get blindsided by unexpected events or fall victim to emotions like fear and greed.

Today, Howard Marks shares with the world how to identify and master the cycles that govern the markets. His new book, Mastering the Market Cycle: Getting the Odds on Your Side, is officially available for purchase.

In Mastering the Market Cycle, he provides practical insight and analysis on how to understand, track, and react to the ups and downs of market cycles. He reveals the hidden logic in carefully pinpointing market trends so that investors have the opportunity to improve their results.

By following the insights he lays out in the book—drawn from his nearly fifty years of investing experience and articulated in his memos—you can master these recurring patterns to help with your own financial gain and psychological benefit.

You can learn more about the book at Mastering the Market Cycle: Getting the Odds on Your Side and follow the latest updates on Mr. Marks's social media accounts on Twitter, Facebook, and LinkedIn.

Mastering The Market Cycle

Mastering the Market Cycle: Getting the Odds on Your Side By Howard Marks

Book Description

We all know markets rise and fall, but when should you pull out, and when should you stay in? The answer is never black or white, but is best reached through a keen understanding of the reasons behind the rhythm of cycles. Confidence about where we are in a cycle comes when you learn the patterns of ups and downs that influence not just economics, markets and companies, but also human psychology and the investing behaviors that result.

If you study past cycles, understand their origins and remain alert for the next one, you will become keenly attuned to the investment environment as it changes. You’ll be aware and prepared while others get blindsided by unexpected events or fall victim to emotions like fear and greed.

By following Marks’s insights — drawn in part from his iconic memos over the years to Oaktree’s clients — you can master these recurring patterns to have the opportunity to improve your results.

A Note to Readers from Howard Marks, author of Mastering the Market Cycle

Investors clearly could do much better if they knew what lies ahead. But they can’t. Few people can accurately predict what the future holds in store for the economy and markets, and fewer still know enough about these things to out-think and thus out-invest the general consensus of investors whose views are incorporated into – 'discounted by' – the market prices of securities. But we know economies and markets follow an up-and-down pattern called a cycle and, importantly, knowing where we currently stand with regard to the economic cycle and the market cycle can give us a better idea of what lies ahead. This is a process through which investors can get the odds on their side.

When the economy is just beginning to recover from a slowdown and the markets are picking themselves up off the floor after a bust, it’s highly likely that security prices haven’t been lifted to precarious levels by large doses of investor optimism.

Pleasant surprises are more likely to lie ahead than disappointments; investors will probably come to be persuaded of these things over time and thus become buyers; and their buying should cause security prices to rise. At such a point – when economies and markets are low in their cycles – good things are more likely to lie ahead than bad things.

Since security prices aren’t inflated, buying at that point is likely to make for significant appreciation and entail little risk.

And on the contrary, when the recovery and bull market have been rolling for a while, investors are likely to be feeling good, and their optimism is likely to be incorporated in security prices.

Thus prices may be at risky highs; disappointments are more likely to lie ahead than good news; and thus risk may be high and appreciation hard to come by. All these things mean that when we’re high in the cycle, the odds are against you. When others feel good and drive prices to highs, it’s time to cut risk and take some of your money off the table.

In all these things, the operative words are 'likely' and probable.' So while we can’t know what the future holds, we can have a better idea whether the wind is at our back or in our face. The best investors have a sense for where we stand in the cycle and thus whether it’s time to build more aggressiveness or more defensiveness into their portfolios. This book will teach you what cycles are, what causes their rise and fall, and thus how to tell what investment moves are most likely to succeed.


“Howard Marks’s Mastering the Market Cycle is a must-read, because the cycles covered in this book are important and because Howard is one of the investing greats of his generation.” — Ray Dalio, Co-Chief Investment Officer and Co-Chairman, Bridgewater Associates

“I always say, ‘There’s no better teacher than history in determining the future.’ Howard’s book tells us how to learn from history . . . and thus get a better idea of what the future holds.” — Charlie Munger, Vice Chairman, Berkshire Hathaway

“While most investment professionals take the standard out – that ‘you can’t time the market’ – in Mastering the Market Cycle Howard Marks, a living investment legend, takes the contrarian point of view that not only can you time markets, but it’s imperative that you do so.” —Bill Gurley, General Partner, Benchmark

“Mastering the Market Cycle reveals how cycles not only coincide with, but also cause, financial market risk and opportunity. Written in plain English, Howard Marks’s hard-earned wisdom will help readers tilt the odds in their favor.” - Jeffrey Gundlach, Founder, DoubleLine Capital

”If you’re uncertain as to whether there will be a correction in the market – or if you think there’s no reason to worry because ‘it’s different this time’ – you have to read this book before you make a move.” —Carl C. Icahn, Chairman, Icahn Enterprises

Praise for Howard Marks’s THE MOST IMPORTANT THING

“When I see memos from Howard Marks in my mail, they’re the first thing I open and read. I always learn something, and that goes double for his book.” —Warren Buffett, Chairman and CEO, Berkshire Hathaway

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