Recognizing and adapting to market cycles is crucial for investment success. Marks explains that markets oscillate between extremes of optimism and pessimism, driven by investor psychology. He advises adopting a contrarian approach: being cautious during euphoric markets and opportunistic during downturns. 'The pendulum cannot continue to swing toward an extreme, or reside at an extreme, forever,' Marks notes, emphasizing the inevitability of cyclical reversals. | Howard Marks | The Most Important Thing

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The Role of Market Cycles

Recognizing and adapting to market cycles is crucial for investment success. Marks explains that markets oscillate between extremes of optimism and pessimism, driven by investor psychology. He advises adopting a contrarian approach: being cautious during euphoric markets and opportunistic during downturns. 'The pendulum cannot continue to swing toward an extreme, or reside at an extreme, forever,' Marks notes, emphasizing the inevitability of cyclical reversals.

-- Howard Marks