Market Sentiment Assessment Framework

Markets spend most of their time slightly overvalued or slightly undervalued. The great opportunities — and the great dangers — appear at the extremes. This framework teaches you to measure the distance from the extreme.

Why This Matters

Howard Marks built his reputation on "knowing where we are in the cycle" — not predicting the future, but reading the present accurately. Individual investors consistently misread sentiment because they rely on how the market feels rather than measuring what it is doing. This framework replaces feeling with four measurable dimensions: positioning, narrative, valuation, and credit conditions.