“This effort to explain life through the recognition of patterns—and thus to come up with winning formulas—is complicated, in large part, because we live in a world that is beset by randomness and in which people don’t behave the same from one instance to the next, even when they intend to. The realization that past events were largely affected by these things—and thus that future events aren’t fully predictable—is unpleasant, as it makes life less subject to anticipation, rule-making and rendering safe. Thus people search for explanations that would make events understandable . . . often to an extent beyond that which is appropriate. This is as true in investing as it is in other aspects of life.”
—Howard Marks, “Mastering the Market Cycle”.