Last week, I listened to an interview in which Howard Marks, cofounder of Oaktree Capital, shared his views on dealing with change. He referred to his 2006 “It Is What It Is” memo (see here). In that memo, he said that “mujo means cycles will rise and fall, things will come and go, and our environment will change in ways beyond our control. Thus we must recognize, accept, cope and respond. Isn’t that the essence of investing?”

What jumped out to me was his four steps for dealing with change:

• Recognize
• Accept
• Cope
• Respond

Change is inevitable and beyond our control. We can’t change our reality. As Marks said in the interview, “what we can’t do as investors—we can’t say ‘Please sir, I'd like a different environment.’ The environment is what it is, and it’s this one we have to cope with . . . .”

Change is the only constant in life. That being true, having a rational process for dealing with change is key (fighting it usually doesn’t end well). That’s why I like Marks’s four-step process. It’s simple, easy, and something anyone can follow. If something is happening that creates uneasiness, it’s not difficult to go through each of these steps to deal with the change and hopefully become at ease with it.

Marks elaborated more on this topic in the interview. To listen to his comments, go to that section of the interview here.

The entire interview contains other great nuggets of wisdom. If you want to watch it from the beginning, take a look here.