"Whatever method you use to pick stocks your ultimate success or failure will depend on your ability to ignore the worries of the world long enough to allow your investments to succeed. It isn’t the head but the stomach that determines the fate of the stockpicker."
— Peter Lynch
Howard Marks released a new memo earlier today.
A few of my favorite lines from "On Bubble Watch"...
1. "A bubble or crash is more a state of mind than a quantitative calculation. You can look at valuation parameters, but I've long believed a psychological diagnosis is more effective."
2. "There is nothing so disturbing to one's well-being and judgment as to see a friend get rich."
3. "Legend has it that J.P. Morgan knew there was a problem when the person shining his shoes started giving him stock tips. My partner John Frank says he saw it in 2000 when he heard the dads at his son's soccer game bragging about the tech stocks they owned — and again, in 2006, when a Las Vegas cab driver told him about the three condos he'd purchased."
4. "Bubbles are invariably associated with new developments. Attention to history can serve as a tether — but if something's new, meaning there is no history, then there's nothing to temper enthusiasm."
5. "The attractions of a new product or way of doing business are usually obvious, but the potholes and pitfalls are often hidden and only discovered in trying times."
6. "There's usually a grain of truth that underlies every mania and bubble. It just gets taken too far. The internet did change the world — but the vast majority of internet and e-commerce companies that soared in the late '90s bubble ended up worthless."
7. "When something is on the pedestal of popularity, the risk of a decline is high. When people assume — and price in — an expectation that things can only get better, the damage done by negative surprises is profound. In the real world, trees don't grow to the sky."
8. "In bubbles, investors treat the leading companies — and pay for their stocks — as though the firms are sure to remain leaders for decades. Some do and some don't, but change seems to be more the rule than persistence."
9. "The riskiest thing in the world is the belief that there is no risk."
10. "When stocks rise too fast — out of proportion to the growth in underlying companies' earnings — they're unlikely to keep on appreciating."
Listening is not about fixing the problem immediately. It’s about holding space for someone to feel understood.
Rushing to give advice when someone shares their struggles reinforces a lack of emotional safety.
A key to building trust is letting people know their feelings matter more than your solutions.
"Study successful investors, and you'll notice a common denominator: they are masters of psychology. They can't control the market, but they have complete control over the gray matter between their ears."
— Morgan Housel
The 80/20 rule will transform your 2025 productivity:
Get more done with less effort.
The rule says 80% of results come from 20% of efforts.
In other words: By prioritizing the most important 20%,
You get almost the same results AND free up tons of time for other priorities.