TIP562: How to Cope With Market Cycles
We Study Billionaires - The Investor’s Podcast Network
Stig Brodersen
4.6 • 3.6K Ratings
🗓️ 2 July 2023
⏱️ 67 minutes
🧾️ Download transcript
Summary
Clay Finck completes his review of Howard Marks’ book – Mastering the Market Cycle. This is a wonderful book for understanding market cycles and where we are at in the cycle at any given time. Most investors aren’t aware of the cyclicality of markets and are prone to fall victim to greed and fear at the exact wrong times. Superior investors are aware of markets cycles, and position themselves to profit from them.
IN THIS EPISODE YOU’LL LEARN:
00:00 - Intro.
01:33 - How Howard Marks thinks about the real estate cycle.
13:02 - The three stages of a bull market and bear market.
14:45 - Why cycles will continue indefinitely into the future.
15:30 - How Isaac Newton lost a fortune in the South Sea Bubble in 1720.
21:47 - The telltale sign to look for to almost be certain that you’re in a market bubble.
33:41 - Why ‘silver bullets’ never pan out well for investors.
45:05 - Why Oaktree thinks timing market bottoms is a fool’s errand.
47:13 - Why success can bring the seeds of failure for many investors, companies, and sectors.
58:05 - Howard Marks’s thoughts on where we are at in the market cycle in 2023.
72:55 - How to know when is the appropriate time to position your portfolio aggressively and defensively.
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Check out our newly released TIP Mastermind Community.
- Check out Part 1 of our review of Mastering the Market Cycle, or watch the video here.
- Howard Marks’ book – Mastering the Market Cycle.
- Check out our recent episode covering Clay’s review of Howard Marks’ book – The Most Important Thing, or watch the video here.
- Check out our recent episode covering the 100 to 1 in the Stock Market by Thomas Phelps, or watch the video here.
- Related episode: Listen to TIP378: Move Forward With Caution w/ Howard Marks or watch the video here.
- Related episode: Listen to TIP545: The Third Sea Change Has Begun w/ Howard Marks or watch the video here.
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Transcript
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| 0:00.0 | You're listening to TI-P. |
| 0:03.0 | Hey everybody, welcome to the Investors Podcast. |
| 0:05.6 | I'm your host today, Clay Fink, and today I will be continuing my discussion on Howard |
| 0:10.4 | Marks' wonderful book called Mastering the Market Cycle. |
| 0:14.0 | On Episode 559, I covered the first half of the book, and this episode covers the second |
| 0:18.8 | half, as well as bringing in a few of my favorite clips from Howard's recent appearance on |
| 0:23.0 | our show with Trey Lockerby. |
| 0:25.2 | During this episode, we cover the real estate cycle and how it differs from other cycles. |
| 0:29.5 | The three stages of a bull in bear market, what we can learn from previous bubbles and |
| 0:34.0 | crashes such as the South Sea Bubble, the one telltale sign to recognize when you're in |
| 0:38.8 | a bubble, how Howard thinks about gauging the temperature of the market, how he approaches |
| 0:43.8 | bind during a panic and why he doesn't try to time the bottom, why cycles are likely |
| 0:48.6 | to persist as far as the eye can see and much more. |
| 0:52.0 | What for the redo here is part two of our review of mastering the market cycle by Howard |
| 0:57.0 | Marks. |
| 0:58.5 | You are listening to the Investors Podcast, where we study the financial markets and |
| 1:06.5 | read the books that influence self-made billionaires the most. |
| 1:09.9 | We keep you informed and prepared for the unexpected. |
| 1:14.6 | Alright, so jumping right in, I wanted to start with chapter 11 covering the real estate |
| 1:25.8 | cycle. |
| 1:26.8 | If there is any asset class where people make broad generalizations to justify their |
| 1:31.1 | purchase, real estate may be the most prominent example. |
... |
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