Howard Marks: The biggest risk is thinking there’s no risk, and the worst loans are made during boom times. Investment guru Howard Marks reiterated a timeless quote from Warren Buffett in his latest insights: The less cautious others are in their actions, the more cautious you need to be in your decisions. He admitted that when everyone loses their respect for the market, he feels extreme fear. In such an atmosphere, people often make reckless moves that drag everyone into danger. The scariest thing in the world is when the market firmly believes there’s “no risk at the moment.” Once this illusion spreads, the entire world can spiral into madness. He referenced an old saying he heard during his early days in banking: “The worst loans are often made in the best of times.” This perfectly encapsulates the core logic of market cycles. When everyone is partying, making money with their eyes closed, and feeling like there’s nothing to worry about, he chooses to retreat into a “protective cocoon” and go fully defensive. This kind of frenzy is not only chilling but also signals that truly valuable opportunities in the market have become scarce. On the flip side, when the market is bleeding, fear is rampant, and no one dares to touch any risky assets, the expected returns for taking on risk skyrocket. And that, he says, is the perfect moment to go all-in and launch a full-scale offensive.