Reading Howard Marks' investment memos is up there with reading Paul Graham's essays. You just need to do it. Howard's latest is about "taking the temperature" of the market and I think you'll find the lessons invaluable for everything from equities to residential real estate.

Here's an excerpt that I liked:

We don’t say, “It’s cheap today, but it’ll be cheaper in six months, so we’ll wait.” If it’s cheap, we buy. If it gets cheaper and we conclude the thesis is still intact, we buy more. We’re much more afraid of missing a bargain-priced opportunity than we are of starting to buy a good thing too early. No one really knows whether something will get cheaper in the days and weeks ahead – that’s a matter of predicting investor psychology, which is somewhere between challenging and impossible. We feel we’re much more likely to correctly gauge the value of individual assets.

These are investing words to live by. Avoid your own emotionality and value the asset. If it's not cheap, don't buy it. If it's cheap, buy it. Then take a long-term view. It all sounds simple enough, but it's clearly not so easy. And that's why we have extreme highs and extreme lows in the market.

Eighteen months ago, everyone wanted to buy residential real estate. Today, prices are lower, but fewer people want to buy residential real estate. Part of this is obviously because of interest rates. But part of it is also just because of emotion.

When I was in grad school at Penn I was active in two clubs: the real estate club and some tech/entrepreneurship club (I can't remember the exact name). These were two areas that I was interested in and so I wanted to hang out with people who were also interested in these things and I wanted to hear from experienced people who were active in these fields.

At that time, which was before the Great Recession, the real estate club was bigger and more active than the tech club. I think it was something like 3 to 1. But I remember one of my professors telling me that participation across the various clubs generally ebbs and flows. Before the dot-com bubble, the tech club was where you wanted to be. But that asset bubble had burst, and so people had moved onto real estate, which, at that time, was in the midst of creating its own asset bubble.

What we students were effectively doing -- by way of deciding where to spend our time -- was chasing the next hot thing. They were chasing where they thought they'd be able to make the most money coming out of school. There is, of course, nothing wrong with this. The pursuit of profit is fundamental to capitalism. But at the same time, I think it's crucially important to have some conviction.

Right now we are going through another cycle. Real estate was hot last year and it is not right now. Tech was hot last year and it is not right now. NFTs were hot last year and they are not right now. The list goes on. But if you like these things and if you have some conviction, is it really the time to move onto the next club? You may find the opposite to be true. Now is actually the time to ramp up participation.