You need a strong stomach for being wrong because we are all going to be wrong more often than we expect. Bring wrong is inevitable and normal. And what I wanted to ask you about is patience and the importance of patience because in your book, I don't know if you explicitly say it but you're talking about the market cycle, which implies market timing, but I know you're not talking about market timing. So you have to ... so there's this element of patience that has to ... 'cause you could be right, you know, early, and then have to wait for some time. So I'm just curious about how you've been able to have that patience. Is it process? Is it personality? Is it people? What's driven your success with that?

This book focuses on the third. It is harder to gain an edge over investors in judging the environment — where we are in the market cycle — than in the first two areas. But it is not impossible.Patience is one of the most important things in our business,” Marks said. “And what I like to point out is that sometimes we have a sense for what’s going to happen. We never know when. Most of the important things that happen in our business . . . are primarily attributable to changes in psychology, not fundamentals . . . And psychology cannot be predicted and certainly cannot be timed.” An investor needs to question whether they have the skill required to improve on the market’s performance through active decision making, or should give up on doing so and invest passively in index funds, settling for market performance. I think that it would be wonderful to not have the bias toward either optimism or pessimism. I don't know if it's human to not have a bias, but clearly I could've done better over my career if I'd been less cautious. Of course, I might not be sitting here. I might've carried out in the last crisis.

Investors with the ability to understand cycles will find opportunities for profit. Chapter 18: The Essence of Cycles It is very easy to achieve average investment performance and it is quite hard to perform above average.

1. Why Study Cycles

Marks’s memoshave a cult following on Wall Street and beyond, and anyone whose read them knows he is fond of adages. And true to form, he pulled out one in response to Bond’s question. For some reason, that resonates with me, and I find it easier to admit what I don’t know than to persevere as if I did,” he said. Alan: Okay. Second of what I would consider the follow-up questions to one of your earlier comments was about really the key, about being emotionless in terms of your investment decisions, and the question is, how do you get there? For those of us that do get emotional and let our emotions impact us, what has worked in your experience that allows you to keep emotion out of the equation?

If I could ask only one question regarding each investment I had under consideration, it would be this: how much optimism is factored into the price? Businesses with high fixed costs and low variable costs will experience large swings in profitability based on changes in overall sales, while companies with low fixed costs and high variable costs will remain more or less equally profitable in good times or bad.This chapter is frustrating because if you can’t know how long a cycle will last, it’s basically the same as not knowing where you are in a cycle, which means it’s highly questionable whether spending a lot of time thinking about it will actually help you improve your odds. Overly generous capital markets ultimately lead to unwise financing and thus to danger for participants