The Essence Of Cycles

This chapter contains some of the book’s paragraphs that Howard thinks hold the keys to understanding cycles. This chapter is a recap of the book’s key observations.

When we are getting value cheap, we should be aggressive.

Understanding and being alert to excessive swings is an entry-level requirement for avoiding harm from cyclical extremes, and hopefully for profiting from them.

Maximum psychology, maximum availability of credit, maximum price, minimum potential return, and maximum risk all are reached at the same time at the top of the market cycle.

In reverse of what happens at the top of the market cycle, the nadir of psychology, total inability to access credit, minimum price, maximum potential return, and minimum risk all coincide at the bottom.