NKE21.97▼ −1.30%NFLX66.38▲ +2.20%BA368.98▼ −3.85%NKE21.97▼ −1.30%NFLX66.38▲ +2.20%BA368.98▼ −3.85%
Cycle Heron — Signature move
▍ Legend Terminal · Heron

Cycle Heron

A collectible critter in the spirit of Howard Marks · 1995–present

POWERReading market cycles and buying when others are forced to sell.
epicDip styleHeron
Total return
+5.2%
Simulated, this window (~1 month). Never annualized.
vs SPY
+3.5%
Window spread over the S&P 500 benchmark.
Max drawdown
−5.0%
Worst peak-to-valley dip realized in-window.
Sharpe
2.75
Return per unit of risk (annualized ratio).
Simulated · educational · not investment advice. A book traded in Cycle Heron's style — a fictional critter in the spirit of Howard Marks. Not a portrait, quote, endorsement, or Howard Marks's real returns.
The story

A critter in the spirit of Howard Marks, co-founder of Oaktree Capital, known for distressed-debt investing and his widely read memos on risk and market cycles. Inspired by his emphasis on understanding where we sit in the cycle rather than forecasting it. Educational inspiration only.

The lesson
What a player learnsYou can't predict the future, but you can prepare for it.
Strategy dossier — Value InvestingFactor · medium risk

Buy assets trading below your estimate of their intrinsic worth, and wait.

Value investing buys assets that look cheap relative to fundamentals: earnings, cash flow, book value, or assets. The premise, rooted in Graham and Dodd, is that markets over-punish out-of-favor companies, creating a 'margin of safety' between price and intrinsic value that eventually closes. Investors do bottom-up analysis of balance sheets and business quality, then hold patiently for the market to re-rate the stock. It is inherently contrarian, requiring you to buy what others are selling. As a factor, cheapness is measured with ratios and applied across a diversified basket rather than a single deep-dive, but the underlying bet is the same.

Strengths

  • Long, well-documented historical premium over decades
  • Margin of safety cushions downside
  • Forces disciplined, fundamentals-based thinking

Trade-offs

  • 'Value traps': cheap stocks that stay cheap or go bankrupt
  • Can underperform growth for a decade-plus (e.g. 2010s)
  • Requires painful patience and contrarian conviction
Also practiced byBenjamin GrahamWarren BuffettSeth KlarmanJoel Greenblatt
Read the full Value Investing guide →
The deep-dive on how this style works, its risks, and its history.
Quality Investing →
Own durable, profitable, well-run 'compounder' businesses and hold for the long haul.
SIM · Track record — equity curverebased · 100
100.0102.0104.0106.0108.02026-06-182026-06-192026-06-222026-06-232026-06-242026-06-252026-06-262026-06-292026-06-302026-07-012026-07-022026-07-032026-07-062026-07-072026-07-082026-07-092026-07-102026-07-132026-07-142026-07-152026-07-16
A simulated book traded in Cycle Heron's style over the season window (2026-06-18 → 2026-07-17, ~21 sessions) vs SPY. Values rebased to 100 — NOT Howard Marks's real returns.
SIM · Risk · ratios
2.75SHARPE
Sortino
4.84
Reward per unit of downside risk (annualized).
Ann. vol
24%
How bouncy the ride was, annualized.
Win rate
50%
Share of days that finished green.
Portfolio β
1.12
How much it moves with the whole market.
Best day
+3.1%
Biggest single-day gain this window.
Worst day
−2.6%
Biggest single-day drop this window.
Drawdown (in-window)
Returns are raw window totals; ratios are annualized (labelled). SPY did +1.7% over the same window.
SIM · Holdings — real companies, honestly explained3 names
TickerCompanyWeightWindowPath
NKE
Nike
Nike sells products and experiences people buy every day.
55%
▼ −2.5%
NFLX
Netflix
The streaming service that helped end cable TV.
27%
▲ +4.9%
BA
Boeing
Boeing builds the machines and infrastructure behind the economy.
18%
▲ +4.6%
Tickers are real large-caps used for familiarity — no valuation claims, no price targets.
SIM · Sector exposure
Consumer
55%
Communications
27%
Industrials
18%
SIM · Conviction map — beta × volatility
5%25%45%0.4β1.0β1.6βvol ↑market beta →NKENFLXBA
Where this critter's simulated picks sit on the risk map — bubble size = portfolio weight, hue = sector.
SIM · Best & worst holder (this window)
NFLX
Netflix
+4.9%
▲ Best-performing holding
A price-path fact this window — not a verdict on the company.
NKE
Nike
−2.5%
▼ Worst-performing holding
A price-path fact this window — not a verdict on the company.
Analyst's note
Hedgie
League analyst

🦩 Cycle Heron ran a dip style book this window. It returned +5.2% (+3.5% vs SPY), with a Sharpe of 2.75 and a -5.0% worst dip. True to its discipline, it leaned in where the crowd had sold off. Discipline over drama — this describes the critter's process and result, not the merit of any company. Simulated · educational · not investment advice.

Model sheet4 poses
Cycle Heron — Signature move
Signature moveTheir power in action

Recruit the Cycle Heron style in Conviction League

Draft a critter that trades in this spirit, train it on a simulated market, and climb the leaderboard — free and fully simulated, so there's zero real-money risk.

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Prices are simulated by a factor model; tickers are real large-caps used for familiarity only. Returns shown are raw window totals over a ~1-month fixture; Sharpe/Sortino/vol are annualized ratios.