Howard Marks on Improving Investing Odds

At the CFA Society Portland’s Annual Investment Strategy Dinner last month, Oaktree Capital co-chair Howard Marks said the two most important factors for investing success are managing risk and understanding where we are in the market cycle. This according to an article in CFA Institute. “We never can be sure of an outcome,” Marks told the audience, “but I think we can get the odds on our side by understanding where we are in the cycle.”… Read More

Burton Malkiel’s Review of Howard Marks’ Mastering the Market Cycle

An article in The Wall Street Journal offers Burton Malkiel’s review of Howard Marks’ new book, Mastering the Market Cycle. According to the article, the book focuses on Marks’ belief that “If we study past cycles, understand their origins, and import, and keep alert for the next one…we can master these recurring patterns for our betterment.” The article says the book “comes down to the insights of behavioral finance,” and that Marks (of Oaktree Capital… Read More

Howard Marks Weighs in on Surviving Market Upheaval

A recent Barron’s article offers insights from Oaktree Capital Management co-founder Howard Marks on the recent uptick in market volatility. Here are some highlights of Marks’ comments: The market is no longer in an “optimistic” phase. “For some reason,” Marks said, “because of the way investor psychology works, people switch from only seeing the good to seeing only the bad. So, what I said nearly a month ago about the market being in an optimistic… Read More

The Challenges of Market Cycle Timing

By Jack Forehand (@practicalquant) —   Everyone wants to follow the investing advice of market legends. After all, that level of success is typically not achieved by accident. Investors want to learn from their wisdom. They want to do what they do. In some cases that can be a slippery slope, though, and it is important to consider the advice of market legends in the context of your own personal situation. . Howard Marks’ new Book, Mastering… Read More

Market Wisdom from Howard Marks

In a recent podcast, author Tim Ferris interviews Howard Marks to discuss the Oaktree Capital co-founder’s views on investor psychology, his new book Mastering the Market Cycle: Getting the Odds on Your Side, and macro issues related to the economy. The lengthy discussion spans Marks career, life lessons, and how to navigate an uncertain and random world. Here are some highlights: Marks emphasizes the importance of knowing your limitations as an investor. The phrase, “I don’t… Read More

The Case for Value Stocks

By Jack Forehand, CFA (@practicalquant) —  Value stocks have lost their mojo. After an extended period from 2000 to 2007 where they outperformed growth stocks by a wide margin, they are now in one of their longest periods of underperformance ever. The below chart shows the iShares Core US Growth ETF against the iShares Core US Value ETF from 2007 to the present. As you can see, growth has outperformed value by almost 3 to… Read More

This Late Stage Economic Cycle Could Be Coming to an End

The current robust earnings season shows that investors are willing to pay for companies that are performing well but are also overlooking those where “growth is anything but stellar,” says a recent article in The Wall Street Journal. Based on history, it says, this could be a “sign that the stock market rally, and the economic expansion, is nearing its end. Late in economic expansions, the article says, “earnings growth slows and profit margins narrow.… Read More

Barry Ritholtz: Market Performance Isn’t Due to President

In a recent Bloomberg article, the co-founder and chief investment officer of Ritholtz Wealth Management debunks the notion that the stock market’s record performance is tied to hopes around the president’s policy agenda. Ritholtz argues, “First, there is the tendency of the markets to ignore the dysfunction in Washington—as they have for most of the past decade. If the markets are really rallying on expectations of good things from the government, then the inability to… Read More

Sonders: Market Most Likely in Post-Echo Bull Phase

Liz Ann Sonders, chief strategist for Charles Schwab, outlines the four phases of the stock market over a full market cycle. Since 1960, the market can be seen following the four distinct periods: recession bear, post-recession bull, echo bear and post-echo bull. Recession Bear: these are the big bear markets, usually lasting a few years and averaging declines of 30%. The 2007-2009 bear market, as Sonders points out, fell by 54% so that was a… Read More

Understanding the Seven Phases of Bull Markets and Why this Bull Market is Still Alive

Ron Meisels, founder and president of the independent research firm Phases & Cycles, says that we are in a defined pause in a bull market that will resume late this year and continue through 2016. Meisels contends that market cycles have seven phases – five bullish and two bearish – and in the fourth phase, a consolidation before the bull market enters its fifth and final phase.  “A bull market goes through lags and corrections,… Read More