This is the best book I have read recently. It is full of useful information. The author is Howard Marx, the chairman of Oaktree Capital and one of the founders of the company. The translator is China Universal Fund Company. ’s chief investment and financial planner, Liu Jianwei, these two people together have taught us Chinese readers a valuable investment lesson.

This book is divided into 18 chapters. The first 17 chapters have their own content. Chapter 18 is a summary, and the first 17 chapters are divided into three parts. The first part is to understand the three major laws of cycles, the second part is to analyze the three categories and nine types of cycles, and the third part is how to deal with the three-step operation of cycles. The translator has already explained these contents to you in the previous preface. A brief introduction is given so that it is very easy for us as readers to understand. After reading the whole book, personally, I have a deeper understanding of the magical existence of cycles, and I can simply analyze and utilize cycles. However, I think if I want to truly understand cycles and completely If it can be applied, it will probably take some time to digest.

Next I will retell the general content of this book. This time I am not going to write a book review, but simply write reading notes~~ If you really want to know whether this book is worth reading. If you read it, I can give you the answer right now:

If you want to become an excellent investor, or you are someone who has financial management and investment ideas at the moment, then I recommend you to read it. This book will benefit you a lot. It is completely different from other bullshit investment books. It is really full of useful information. If the full score is 5 stars, I will give it 5 stars; and if you If you are not interested in investment, financial management and economics at all, then please skip him. After all, the price is 88 yuan, which is not cheap at 50% off. Why not buy a cup of milk tea~

The three major laws of the cycle, 1. If you don’t follow a straight line, you must follow a curve. 2. If you are the same, you will only be similar. 3. Take less in the middle and more in the extremes.

There are 9 types of cycles in three categories. Type 1 fundamental cycle: economic cycle, government regulation counter-cyclical, corporate profit cycle;

Type 2 psychological cycle: psychological pendulum and risk Attitude cycle.

The third type of cycle, market cycle.

To deal with the three-step cycle, be knowledgeable, courageous and prepared. win?is?not?all,it's?only.

So what is a cycle? Some recurring patterns are generally called cycles.

How to develop the ability to judge cycles? Analytical skills are the foundation, market outlook is very important, read a lot and learn more, make friends with peers and communicate more, and the last point is that investment experience is the most valuable.

Investing is actually about preparing for the future.

But even if you can predict the macroeconomic aspects of the future, it is of no help to you now, because you don’t know when that future will come.

So what is risk? Risk is the possibility that things will not develop as expected.

We should think of the future as a series of intervals composed of probabilities. Although many things may happen, only one will actually happen.

In the book, Howard reminds us to remember where we are in the cycle, which will profoundly affect our chances of winning. Investors should pay attention to risks, and it is best to pay too much attention to risks.

All the times in the cycle do not happen one after another, but happen one after another. Moreover, the cycle has no beginning and no end, and is always fluctuating.

So what does the cycle include? The cycle includes stages of recovery, rise, top, reversal, fall, bottom, recovery, and rise again. Many people regard these stages as a series of events.

Then in this book, Howard mentioned one thing more than once, that is, investors cannot remember the past. Because of their forgetfulness, the influence of cycles is further strengthened.

I think his analysis of the reasons for the decline was very insightful. He said that the cause of the decline must be the rise, and the decline must be rapid and fierce, because the balloon is leaking more than it is inflated. It's almost time.

Of course, the cycle is not an objective law. It is highly random, and one of the main reasons that can affect this random change is human participation.

In this chapter, he mentioned something about human nature, which I have never thought about before. He said that human nature is to find reasons for everything that happens.

The economic cycle in Chapter 4 is the longest of all Howard's chapters. Here he talks about GDP, economics, and the economic crisis in recent years. Well, I have discussed this in other chapters. I have seen it in the data, so I won’t repeat it. However, in this chapter, he focused on China, China’s two-child policy and family planning. He said that if 22 years is used as a cycle, in 2035 From 2040 to 2040, China's economy may have another round of outbreak.

Because that will be the boost brought about by the second wave of demographic dividend.

Well, what then? The three main protagonists of this book also appear in this picture. They are psychology, emotion, and decision-making process.

Of course, he also mocked those economists and forecasters here. He said that there are only two types of forecasters: one type of forecasters don’t know at all, and the other type of forecasters don’t know that they don’t know. Know.

About Inflation

Inflation is like bitter medicine in many ways. Although its process is somewhat painful, it can indeed bring benefits, and inflation is very common. It is also unavoidable to a large extent, so the goal is usually not to eliminate inflation but to control it.

When demand exceeds supply, rising costs and depreciation of the domestic currency will cause inflation, which means things become more expensive. The basic reasons that affect all of this are most likely the rise in raw materials and the price of labor. .

About the Golden mean

In this book, the golden mean is mentioned many times. Well, I think this is certainly not a vocabulary that the author himself knows, but the translator himself. Understanding, the book says that the golden mean is the most inhumane, because human nature is easy to go to extremes, either extreme fear, or extreme greed, so in fact, in investment, if you can control it perfectly The golden mean, you will usually be the winner in the end.

Several characteristics that excellent investors need to possess

Mature, rational, good at analysis, objective and not influenced by emotions, and on this basis, calculate the value of each potential investment asset Intrinsic value, and most excellent investors are naturally the kind of people who are not easily swayed by emotions. Not only are their abilities to understand risks outstanding, but their ability to assess risks is also outstanding, and most importantly, their ability to respond to risks is equally outstanding.

Bull market characteristics:

Greed, extreme excitement, confidence, boldness, risk tolerance, and aggressiveness.

Bear market characteristics:

Fear, pessimism, uncertainty, doubt, caution, risk aversion, and reticence.

About risk premium

The general level of compensation for taking risks, and its quantitative relationship with incremental returns, we usually call it risk premium. The most important thing for investors to be wary of here is that trust replaces doubt. Overvaluation is always one of the main sources of risk.

Credit cycle and non-performing debt cycle

This part is also a link that the author focuses on describing, but for me now, I may not understand it so well. After all, we did not involve credit. investment, so I don’t understand many terms. Even when he said that the credit cycle is the capital market cycle, I still don’t understand it. Including the description of the distressed debt cycle in the next chapter, I only have a partial understanding of it. , and these two cycles are the areas that the author Howard is most focused on and understands the most. After all, Oaktree Capital started out by doing bad debt~~After reading this, I can only know that these simple things are the so-called bad debt. , in fact, it does not mean that this company is not good, usually good companies have bad financials, and the essence of bad debt is to rely on debt to collect companies. When we receive a good company, we have our professional team to operate it to make its value from the lowest Points surge upwards, thereby making a profit.

Real Estate Cycle

The author seems to know a lot about real estate. He said that the real estate cycle is very different from other cycles, that is, the development cycle of real estate is very long, and sometimes The development of a real estate has gone through two cycles, so those who make money in the real estate industry are companies that can survive, or investors who are at the right time. He gave an example of the Gentleman's Canal in Amsterdam. Everyone knows that the housing prices in that area will definitely rise in the future, but no one knows when they will rise. In the end, the real estate prices there did double, but it took 350 years. time.

Market Cycle

This is the longest chapter in the whole book. It is equivalent to integrating all the contents of the previous 11 chapters, just like the Eighteenth Subduing of the Dragon. The last trick in your hand, even if you understand all the contents in the previous 11 chapters, if you cannot comprehensively understand the market cycle, you will still be a failed investor, because many things are intertwined and influence each other. The fundamentals will affect the heart, the heart will affect the market, and the market will in turn affect the fundamentals. You think this is a tongue twister, yes, this is a tongue twister.

In this chapter, he also emphasized that sometimes it is necessary to be bold and brave, and mentioned Buffett's famous saying, smart people do it first, stupid people do it last, and Mark Twain's That famous saying, history is always surprisingly similar, mentioned the three stages of bulls and bears, mentioned Charles Kindleberger's words, the most annoying and headache thing is to see a friend Make a fortune. Although the author does not say it explicitly, the word FOMO is definitely one of the core words of this chapter.

The most important thing about investing

The most important thing about investing is the author’s last book, which was crazily named in this book, and the sentences in it were also praised by most people. Quotes, like this one, We never know where we're going to go, but we'd better figure out where we are now.

Investors have short financial memories and are prone to overshooting and logical reasoning errors. Don't think that this is easy. Nothing is easy for people to do when they are in it.

We all know to do the right thing at the right time and maximize it. We must move from emotional investment to rational investment. We must know how to adjust the insights needed to adjust our positioning at any time and adjust our portfolio positioning. Overcoming emotional speculation and following the crowd...

MD, suddenly remembered Han Han's words, I understand the truth, but I still can't live this life well.

Three pairs of factors for investment success

1. Cycle positioning and asset selection,

2. Radical and conservative,

3. Skills and luck.

Then I saw a passage in this chapter that describes me most accurately: Although you may always have bad luck, the actual events do not conform to your reasoning logic, but you The cycle positioning and investment layout are more accurate, which can increase your probability of adapting to market trends in the future and also increase your probability of beating the market.

The "but" in this sentence accurately describes my entire life from the age of 25 to now.

At the end of the book, the author wrote this paragraph:

People tend to go to extremes and never stop, so these extremes must eventually be corrected, and the cycle will not change. The economy and market have never run in a straight line in the past, nor in the future, nor in the future. This means that as long as investors can understand cycles, they can find good opportunities to make money.

This is definitely my longest reading note. I have refined and refined the language and cut out all the nonsense. Still, there are nearly 4,000 words in this book. I will watch it a second time, hoping that I will have a deeper understanding by then.