Cycles can have a major impact on the growth…

Cycles can have a major impact on the growth trajectory of a business, the valuation, and of course the potential rate of return. Market tops a relatively easy to recognize. Buyers generally become overconfident and almost always believe this time is different. It's usually not. There is always a surplus of cheap debt and leverage levels escalate compared to historic leverages and buyers will accept over optimistic accounting adjustments and financial forecast to justify taking on high levels of debt. Unfortunately most of these forecasts then not the materialize once the economy starts decelerating or declining. Another indicator is the number of people who start getting rich and the number of investors who are claiming outperformance. Smart investors perform well through a combination of self-discipline and sound risk assessment even when market conditions

— from The Flight Plan (Purpose/Wisdom/Risk) · What it Takes, Lessons in the Pursuit of Excellence

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