MasteringtheMarketCycle

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 We humans use our ability to recognize and understand patterns to make our decisions easier, increase benefits and avoid pain. Importantly, we depend on our knowledge of recurring patterns so we won’t have to reconsider every decision from scratch. We know hurricanes are more likely in September, so we avoid the Caribbean at that time of year. We New Yorkers schedule our visits to Miami and Phoenix for the winter months, when the temperature differential is a positive, not a negative. And we don’t have to wake each day in January and decide anew whether to dress for warmth or cold. Economies, companies and markets also operate pursuant to patterns. Some of these patterns are commonly called cycles. They arise from n......