09/13 Howard Marks: Cycle (27) Ch.14 Cycle Positioning

CYCLE POSITIONING
Successfully positioning a portfolio for the market movements that lie ahead is dependent on what you do (turning aggressive or defensive) and when you do it (based on a superior understanding of what cycles imply for future market moves).
I once knew a man who was congenitally optimistic and aggressive—perhaps because he’d had the good sense to be born rich and had led a charmed life. He never exhibited self-doubt or seemed to question the accuracy of his forecasts or the likelihood that his stratagems would succeed. He was aggressive as long as I knew him, in what turned out to be a great time for aggressiveness. That experience inspired me to coin a phrase to describe the forces at work:”
“There are three ingredients for success—aggressiveness, timing and skill—and if you have enough aggressiveness at the right time, you don’t need that much skill.
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In February 2017, I found myself working on the final chapters of this book while on vacation in India. One day I visited one of the world’s great sights—Jaipur’s Amer Fort—and attempted to capture a small fraction of its beauty in photos. While reviewing my photos afterwards, I had the good luck to stumble on some I had taken a few months earlier in another exotic location: China.
In the course of that visit, a Beijing-based client had asked me a series of provocative questions, and in answering them I made some scribbles, as I often do, on a whiteboard. Answers came to me that day that hadn’t crossed my mind before. Recognizing that, I took photos of the board with my iPhone before leaving. (What an innovation: twenty years ago I would never have had a camera at a presentation.) Three months later, while reviewing my photographic handiwork at the Amer Fort, I came across those photos from China and thought back to those ideas for the first time......