University of Minnesota - UMN Executive Leadership Insights
Mastering the Market Cycle
Book

Mastering the Market Cycle

Getting the Odds on Your Side

Howard Marks
Houghton Mifflin Harcourt, 2018
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Editorial Rating

8

Qualities

  • Analytical
  • Applicable
  • Insider's Take

Recommendation

Looking to improve your investment returns? Investing legend Howard Marks shows you how to recognize market cycles: the ups and downs that repeat and reverberate throughout history. Deciphering market cycles provides a knowledge advantage. Correctly calibrating your investment actions to cycle movement enables you to be aggressive when the chance for success is high and defensive when it is not – which often puts you at odds with the rest of the investment community. Lean in to the human-driven phenomenon of excess and correction to capitalize on opportunities for exceptional returns.

Summary

Correctly calibrating your investment portfolio in response to changes in the market environment can bring superior results.

Professional investors analyze industries, companies and securities to assess their intrinsic value and potential to grow or change in the short term. They compare the current market price with intrinsic value to establish worth. These investors often seek to build portfolios of assets with the lowest price-to-value relationship. Such portfolios have the potential to outperform the average. When every investor makes decisions based on the same information, analyzed in the same way, no one is likely to outperform the average. Correctly calibrating an asset portfolio in response to changes in the investment environment can bring superior results.

Astute investors try to foresee tendencies and calculate the risk level inherent in different outcomes. Their predictions take the form of probability distributions informed by insights regarding the strength and likelihood of various tendencies. Learning to read market cycles provides investors with a knowledge advantage that allows them to be aggressive...

About the Author

Co-founder of Oaktree Capital Management Howard Marks also wrote the bestseller The Most Important Thing.

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