Navigating Market Cycles with Patience and Discipline

SETH KLARMAN: "I think we know that over the course of history, there are cycles. You're going to have a cycle where you're at war, and then another cycle where people are tired of war and you have peace for a while. At some point, you have peace long enough that people forget how bad war is, and you end up in another war. And you have those similar cycles, whether it's government spending and inflation and deflation, that sort of thing. Even the nature of debt: debt feels great when nobody's asking you to pay it back and when interest rates are low. At some point, that debt becomes pernicious and a giant problem. So I think we're likely to always see those cycles, at least as long as humans are in charge of markets. How do you navigate it? I think you navigate it by realizing that you may not see the cycle with clarity while you're in it, but you know there are cycles. You know that what seems to be true today for all time probably won't be true for all time. And hold on to that. So again, it goes to the idea of holding inconsistent ideas in your head at the same time. This is both true and likely, at some point, to become less true or untrue. And you don't know exactly how. So how do you hold the portfolio? You diversify. When things are up a lot and become more expensive and the go-forward return is low, you take profits, you trade out. When things are out of favor so badly that the returns look high, maybe there's a time to step in and buy during a period when others are dumping. So I think it's that: stay focused on the bottom up." Masters in Business (YouTube) - June 19, 2026