‘Mastering the Market Cycle’ Review: The Dangers of Optimism

Just as prices fluctuate, so do attitudes toward risk. When prices are high, investors worry about it less—when they should be worrying more. Burton G. Malkiel reviews “Mastering the Market Cycle” by Howard Marks.

Amid so much purportedly expert investment advice, it is worth asking who the experts themselves listen to. One answer, undoubtedly, is Howard Marks, among the world’s most successful investment managers as well as an intellectual leader of the profession. His client memos are widely distributed among investment professionals. “When I see memos from Howard Marks in my mail,” Warren Buffett has said, “they’re the first thing I open and read. I always learn something.”

In 2011 Mr. Marks published “The Most Important Thing,”...