Howard Marks’ last book, ‘The Most Important Thing: Uncommon Sense for the Thoughtful Investor’, was a superb book covering twenty different topics that investors should focus on, including market cycles. It was based on a number of memos that he has published over the years for Oaktree clients and which are widely considered to be ‘must reads’ in the investment community.

His current book focuses on the market cycle exclusively. It covers Mr Marks’ thoughts on the various cycles that impact investments, what their root causes are, and to what extent investors can/should position themselves to cope with market cycles.

The book includes the following chapters:
1) Why study cycles?
2) The nature of cycles
3) The regularity of cycles
4) The economic cycle
5) Government involvement with the economic cycle
6) The cycle in profits
7) The pendulum of investor psychology
8) The cycle in attitudes towards risk
9) The credit cycle
10) The distressed debt cycle
11) The real estate cycle
12) Putting it all together – the Market Cycle
13) How to cope with market cycles
14) Cycle positioning
15) Limits on coping
16) The cycle in success
17) The future of cycles
18) The essence of cycles

The last chapter is a really helpful summary that pulls together some of the key views presented in the book and recaps on the key observations.

I found this a really interesting book and in my opinion any investor would benefit from reading it. The author is trying to explain to readers how he thinks about cycles and how they can use this to position portfolios to their advantage over time, which is something that he has done very successfully with Oaktree funds.

My investment approach to date has largely focused on evaluating fundamentals. I will certainly be paying more attention to the wider market cycle in the future to complement this approach as there is clearly an opportunity to outperform (or underperform) depending on how portfolios are positioned relative to the cycle.

I would like to thank NetGalley for providing an advance review copy.