Both are determined by one ticket (the outcome) being pulled from a bowlful (the full range of possible outcomes).

There’s a range of outcomes, and we don’t know where [the actual outcome is] going to fall within the range. The igniter is usually a recession or credit crunch making it difficult for companies to service their bonds and/or refinance. Well, he’s someone whose job is to invest in a range of assets, comprising a package known as a portfolio, which he hopes will increase in value as the years pass. In investing, the future is a range of possibilities — some known, some unknown — making risk and uncertainty unavoidable. Economies, companies and markets operate in accordance with patterns which are influenced by naturally occurring events combined with human psychology and behaviour.The study of cycles is really about how to position your portfolio for the possible outcomes that lie ahead. 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. The long term economic cycle follows fundamental factors that produce a steady average growth rate over a longer secular trend.

Can’t argue with the chap, he’s a serious thinker on the subject but I realised early on I didn’t want to argue with him or hear anymore on economic theory. If we all have the same information, come to the same conclusions, act on it in the same way, then outperformance is unlikely.

Economies and markets have never moved in a straight line in the past, and neither will they do so in the future. When investors are in a pessimistic mood and can’t see more than a few years out, they can only think about the negative cash flows and are unable to imagine a time when the building will be rented and profitable.

While most investment professionals take the standard out - that 'you can't time the market' - in Mastering the Market Cycle Howard Marks, a living investment legend, takes the contrarian point of view that not only can you time markets, but it's imperative that you do so.

Any opinion on the future should be based on: 1) what’s going to happen, and 2) the likelihood of being correct. This cycle in investors’ willingness to value the future is one of the most powerful cycles that exist.