Currently, the stock market is continuing to rally and so the investors find it as a stock market extreme that leads to severe fall, finding the hidden weaknesses for the fall and simply they are in buying panic 
In this situation, Howard Marks, the famous investment manager released a memo on the website of his firm Oak tree Capital saying that the investors should understand the underlying reasons of stock market extremes. Otherwise, they will become a victim of good times and will give away their money to the smart investors.
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Unsettled Stock Market, Understanding investor’s psychology
Howard Marks in his memo stated that-, when the markets are at extreme highs or lows, the investors should understand the underlying reason for the situation to achieve a superior view of their future performance. Everyone knows a little bit of economics, finance, and accounting and can learn how the stock market works.
But the right investment choice comes from knowing the differences between how things are supposed to work and how it works in real-time. To find the difference, the investors do not need economic data or financial data analysis, but the key lies in understanding the investor’s psychology about the ongoing situation.
Mark has stated the exact situation that is residing in India. He is a successful fund manager and writes about investing, which most of the time says reliable. He writes generally in the form of memos or posts on the website of his firm. Warren Buffet, the chairperson of Berkshire Hathaway, said that he drops everything to read Marks’s post whenever he posts about investing.
Market highs have a tremendous effect on the investor psyche. More and more investors are caught up in a frenzy of investment as the high gets tantalizingly close, is reached, and then continues happening again, causing a type of “buying panic.” Marks talks about “taking the temperature of the market” in his message. “Watch for moments when most people are so upbeat that they think things can only get better, an expression that usually serves to justify the dangerous view that no price is too high,” the author advises.
Being in an OK Zone
Since stock market highs are truly a perilous and dangerous moment, this is the purchasing panic that is frequently cautioned investors against. “Remember that in extreme times, because of the above, the secret to making money lies in contrarianism, not conformity,” says Marks in his concluding statement. The ‘easy money’ is typically made by doing the reverse when emotional investors have an exaggerated view of an asset’s future and drive the price to unjustifiable heights. However, this is significantly distinct from consistently deviating from the consensus. He makes a crucial distinction here. Markets are often neither too high nor too low. In the “OK zone,” they are.
Giving Away the Money to Smart Investors
Marks is a professional investment manager who deserves special appreciation. The mass investors, who he has been denoting in his memos and taking advantage of them. He is talking about the people who have the psychology of panicking about extreme lows and highs.
Investors that commit psychological mistakes hand up their money to savvy investors. Although the word “victim” sounds harsh to use, it really fits the situation fairly well. If a seasoned investor claims that the secret to success is comprehending investor psychology, then the retail investor must first comprehend his own psyche. This determines whether your investments are profitable for you or for someone else.
Note: Don’t be a victim is the lesson that investors should take away from this!