Mastering the Market Cycle Book Summary - Mastering the Market Cycle Book explained in key points
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Mastering the Market Cycle summary

Howard Marks

Getting the Odds on Your Side

4.1 (144 ratings)
19 mins

Brief summary

Mastering the Market Cycle by Howard Marks is a guide on how to navigate market cycles. It emphasizes the importance of understanding cycles, controlling emotions, and having a long-term outlook to achieve investment success.

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    Mastering the Market Cycle
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    Investors do their best to buy assets with high value at a low price.

    Let’s start with a basic question. What’s an investor? Well, he’s someone whose job is to invest in a range of assets, comprising a package known as a portfolio, which he hopes will increase in value as the years pass.

    How does he know which investments will accrue value? Well, he doesn’t. Though some guesses are more likely to be correct than others, an investor never truly knows what the outcome of an investment will be. All he can do is discipline himself in the art of making educated guesses.

    But this is no easy art to master. For starters, it’s pretty much impossible to predict the distant future with greater accuracy than other investors. They are likely to know as much as you do about impending large-scale economic, geopolitical or market-related events, such as wars, stock market crashes or the advent of new technologies. Why? Well, you and they are all probably reading the same articles and looking at the same data, so their guesses about future events will probably be as good as yours.

    So you can forget long-term forecasting. It’s much wiser to pay attention to what the author calls “the knowable” and base your short-term predictions off that knowledge.

    The knowable is all the information you can gain about the true value of a given asset. For example, if you’re thinking about investing in a company, you’d want to look at the real value of that company’s assets and compare that value with the price of a share in that company. If the price underrates the real value, you may be looking at a solid investment.

    So the goal is simple enough: you want to buy assets when they’re cheap and wait for developments in the market to bring their price up.

    For instance, imagine the real estate market has crashed, and developers are defaulting on debt and being forced to abandon their building projects. You might be able to snatch up structures whose worth in materials alone exceeds the price at which you’re buying.

    Doing this will, obviously enough, increase the chances that your portfolio will gain value in the future.

    Now, some investors would say this is all the job involves – buying low and selling high. But the author contends that the superior investor should, and often does, consider a third component: financial cycles.

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    What is Mastering the Market Cycle about?

    Mastering the Market Cycle (2018) tackles a subject that’s often misunderstood, ignored or both: financial cycles. It not only explains what cycles are, how they tend to act and what influences them, but how best to position yourself within them to deal with risk and the current market environment. Along the way, it discusses multiple recent financial cycles, teasing out the lessons that can be learned from each.

    Mastering the Market Cycle Review

    Mastering the Market Cycle (2018) offers valuable insights into understanding and navigating the unpredictable nature of financial markets. Here's why this book is worth reading:

    • Packed with practical wisdom, it helps readers make better investment decisions and manage risk in various market conditions.
    • By combining Howard Marks' personal experiences with historical examples, the book provides a comprehensive understanding of market cycles.
    • Its engaging storytelling and clear explanations make complex concepts accessible and ensure that readers won't find the book boring, but rather enlightening.

    Best quote from Mastering the Market Cycle

    We have two classes of forecasters: those who dont know – and those who dont know they dont know. – John Kenneth Galbraith

    —Howard Marks
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    Who should read Mastering the Market Cycle?

    • Aspiring investors wondering how to choose their assets
    • People who’ve already made investments
    • Investors trying to gain a competitive edge

    About the Author

    Howard Marks is an American investor, a writer and a cofounder of Oaktree Capital Management, a Los Angeles-based asset-management firm that oversees more than $122 billion in assets. He also writes an ongoing series of memos, which are eagerly awaited by many value investors, including legendary business magnate Warren Buffett. Mastering the Market Cycle is his second book, the much-anticipated follow up to The Most Important Thing.

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    Mastering the Market Cycle FAQs 

    What is the main message of Mastering the Market Cycle?

    Understanding market cycles is crucial for successful investing.

    How long does it take to read Mastering the Market Cycle?

    The reading time for Mastering the Market Cycle varies, but the Blinkist summary can be read in just 15 minutes.

    Is Mastering the Market Cycle a good book? Is it worth reading?

    Mastering the Market Cycle is worth reading for anyone interested in navigating market fluctuations.

    Who is the author of Mastering the Market Cycle?

    Howard Marks is the author of Mastering the Market Cycle.

    What to read after Mastering the Market Cycle?

    If you're wondering what to read next after Mastering the Market Cycle, here are some recommendations we suggest:
    • The Most Important Thing by Howard Marks
    • The Misbehavior of Markets by Benoit Mandelbrot and Richard L. Hudson
    • The Education of a Value Investor by Guy Spier
    • Nothing But Net by Mark Mahaney
    • The Man Who Solved the Market by Gregory Zuckerman
    • Poor Charlie's Almanack by Peter D. Kaufman
    • The Four Pillars of Investing by William J. Bernstein
    • Rule #1 by Phil Town
    • Deep Work by Cal Newport
    • A Random Walk Down Wall Street by Burton G. Malkiel