Mastering the Market Cycle: Getting the Odds on Your Side

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Both are determined by one ticket (the outcome) being pulled from a bowlful (the full range of possible outcomes). The events in the life of a cycle shouldn’t be viewed merely as each being followed by the next, but — much more importantly — as each causing the next. You now have a general sense of short-term market cycles and the potential benefits of paying attention to your position within them.

Howard Marks, among the world's most successful investment managers as well as an intellectual leader of the profession [has written a new book]. Distressed debt is bought on the basis that the company can no longer pay the interest and principal. Despite being one of the most accomplished investors of our age, Marks has risen above the ranks by following seemingly simple rules, detailed in this book with his usual proficiency, unique insight and, eminently, in plain English. Well, we can say of financial cyclicality what Mark Twain is reputed to have said of history: it doesn’t repeat itself, but it does rhyme.We all love to imagine ourselves to be independent-minded and maybe a little bit contrarian but truth is, with a few rare exceptions, almost everyone is guilty of joining in with all the other bulls and bears.

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. This book is simply a must-read for all investment professionals, short-time traders or long-term savers alike. Factors include: population growth which impacts hours worked and GDP growth which is affected by demographic shifts, education, technology/innovation, automation, and globalization.The study of cycles is really about how to position your portfolio for the possible outcomes that lie ahead. In other words, while superior investors — like everyone else — don’t know exactly what the future holds, they do have an above-average understanding of future tendencies. Basic necessities (consumer staples) like food and medicine are less responsive to the economic cycle. The wisest investors learn to appreciate these rhythms and identify the best opportunities to take actions which will transform their finances for the better. Along the way, it discusses multiple recent financial cycles, teasing out the lessons that can be learned from each.