Investing Quote by Howard Marks
““Every once in a while, an up-or-down-leg goes on for a long time and/or to a great extreme and people start to say "this time it's different." They cite the changes in geopolitics, institutions, technology or behaviour that have rendered the "old rules" obsolete. They make investment decisions that extrapolate the recent trend. And then it turns out that the old rules still apply and the cycle resumes. In the end, trees don't grow to the sky, and few things go to zero.””
About This Quote
Source Letter: Memo to Investors, 2018
Markets often repeat historical patterns despite claims of novelty; fundamentals and old rules reassert themselves over time.
In simple terms: Old rules still matter despite new trends.
Key Takeaway
Recognize enduring fundamentals.
Themes
finance
history
behavior
cycles
Mood
cautious
analytical
Type
advisory
reflective
When to use this quote
- portfolio management
- risk assessment
- policy analysis
- strategic planning
Key Concepts
economic cycles
market psychology
investment strategy
Questions to Reflect On
- What fundamentals are being ignored?
- How can you test if a trend truly breaks history?
A Different Perspective
Overemphasis on novelty can cause misallocation.
