Tuesday, February 26, 2019

Mastering the Market Cycle

I did not want to read Mastering the Market Cycle, but it seems to be so widely read in value investing circles that I felt like I had to. Despite my low expectations, I was still disappointed by the book.

My first problem with it is that most of it is pretty elementary for someone that is already versed in value investing. There is very little that's new here, which makes for some painful reading, which quickly turns into skimming. On the other hand, for beginners this might be a good place to start.

My second problem is Marks' penchant for repetition. Some authors have the gift of being succinct. Marks' gift is his ability to say the same thing a thousand different ways. Chapter after chapter blended into the same main points that describe cyclical highs and lows.

There were some interesting thoughts and examples after page 200, however, but boy you had to pay the price to read that far. One idea I liked in particular was to imagine yourself a few years out (e.g. 2023) thinking about today (2019); do you think your 2023 self would wish he had been more aggressive or defensive in 2019? That may give you an idea of where we are in the cycle. Or it may not; I just thought it was an interesting way to think about it.

For those who want to take advantage of cycles and invest accordingly, I would highly recommend Meb Faber's books (e.g. Global Value: How to Spot Bubbles, Avoid Market Crashes, and Earn Big Returns in the Stock Market). They are much more quantitative (not as in heavy math, but rather as in using math to illustrate) and actionable.

1 comment:

juan said...

"Marks' gift is his ability to say the same thing a thousand different way". Haha. Well put!

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