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This goes to the heart of the matter. As already alluded to, recognition in real time, before the move is really hard almost impossible. The answer is:

(a) Run a really good mechanical system or (far harder) discretionary system that picks up outperformance quickly;

(b) Buy sectors via ETFs;

(c) Buy the market.

(a) Will give you the highest returns. Go visit Mr Skate, Peter, Mr Frog et al for mechanical.

(b) Is relatively easy and (relatively) safe, but the returns will not match (a).

(c) Is the easiest of all, but will give the lowest return.

To pick stocks or sectors on the news, can be done, but it is harder.

However the real purpose of this thread is a continuation of Market Bottoms and Trading the Bounce. That is, has the market bottomed, if so jump back in to trade the bounce and hang on to the reversal or if no reversal hold on for the trend until the trend (potentially) ends due to XYZ. It was never really specific advice on buy XYZ as this is whatever. I have indicated what I have bought, but I buy those sectors because I have wanted to own them and didn't. This was my opportunity to grab them cheap. I have been in the market since 2001. Over time I have accumulated sectors that I like at basement prices in various crashes etc. A crash is the time you buy what you always wanted, but could never pull the trigger on when markets were flying.

Of course, psychologically, buying at the bottom or near the bottom is exactly what the majority will struggle with. Who wants to buy in a sea of red?

The purpose of the 3 threads is: you can buy with (relative) confidence because you have tools to track the overall market and therefore to an extent sectors and reduce your paranoia. Individual stocks are a crap shoot without some really robust methodology.

Now I will continue with this thread certainly to the next bust. Whenever that is. Might be years, decades or next month. One thing is 100% certain: the media and headlines will not be the first to tell you about it.

jog on

duc