Mastering The Market Cycle

Getting the Odds on Your Side

Howard Marks

• Publisher: Harper Business
• Year: 2018
• Print ISBN: 9780358108481
• eBook ISBN: 9781328480569
• Topic: Business
• Subtopic: Investments & Securities
• Index: Business

A NEW YORK TIMES, WALL STREET JOURNAL, AND USA TODAY BESTSELLER

The legendary investor shows how to identify and master the cycles that govern the markets.

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.

Index

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

References in italics refer to figures.

A

Abbey Mortgage Bank, 122–24

Alchian, Armen, 43

Altman, Roger, 5

B

Bank of Ireland, 122, 124

Bernanke, Ben, 239

Bernstein, Peter, 5, 13, 268–69, 315

bond defaults, two-year rule, 44–45

Brooks, Jon, 97

bubbles and crashes

extremes, 265, 297–98, 314

Internet bubble, 217–22

patterns, 240, 263

South Sea Bubble, 195–96

tech bubble, 146, 196, 198–99, 231, 264–65, 292–93

See also Global Financial Crisis of 2007–08; sub-prime mortgage crisis of 2007

Buffett, Warren, 5, 10, 50, 125–26, 193, 211

bull and bear markets, 29, 99, 147

bear market stages, 193–96, 201–3, 219

“bubble” and “crash,” 196–99

bull market stages, 191–93, 200–201, 306–7

great bull market of 1982, 278

Bush, George W., 151

Business Week, 49

C

“Can We Measure Risk with a Number?” (Bernstein), 13

capital market

closed, 139–40, 157–58

conditions, 36, 145–46

definition of, 137

effect of close off of credit, 139–40, 154, 304

capitulation, 34, 194–95, 201, 236, 264, 300, 308

cartoons, 95, 96

central banks

employment stimulation, 70

forecasting economic cycles, 70–71

inflation management, 68–70

See also Federal Reserve Bank

Combs, Todd, 5

credit cycle, 167

auction for lowest yield, 143–44

boom bust, 145–48, 159

credit window, 138, 141–42, 144–45

definition of, 137

excess or easy money, 147–52

influence of, 138–40

short-term debt, 1...

Table of contents

• Title Page
• Contents
• Copyright
• Dedication
• Memos from Howard Marks
• Introduction
• Why Study Cycles?
• The Nature of Cycles
• The Regularity of Cycles
• The Economic Cycle
• Government Involvement with the Economic Cycle
• The Cycle in Profits
• The Pendulum of Investor Psychology
• The Cycle in Attitudes toward Risk
• The Credit Cycle
• The Distressed Debt Cycle
• The Real Estate Cycle
• Putting It All Together—The Market Cycle
• How to Cope with Market Cycles
• Cycle Positioning
• Limits on Coping
• The Cycle in Success
• The Future of Cycles
• The Essence of Cycles
• Afterword
• Index
• About the Author
• Connect with HMH