Howard Marks On Bull And Bear Markets

From the Wall Street Journal and Howard Marks letter to his investors "The tide goes out":
(The journal link has much more )

To aid in your consideration of the future, I’ve formulated the converse of the above, the three stages of a bear market:

• the first, when just a few prudent investors recognize that, despite the prevailing bullishness, things won’t always be rosy,
• the second, when most investors recognize things are deteriorating, and
• the third, when everyone’s convinced things can only get worse.

Certainly we’re well into the second of these three stages. There’s been lots of bad news and writeoffs. More and more people recognize the dangers inherent in things like innovation, leverage, derivatives, counterparty risk and mark-to-market accounting. And increasingly the problems seem insolvable.

I liked this comment:

Major bottoms occur when everyone forgets that the tide also comes in. Those are the times we live for.