Timing the market

[shuoyanz]

There is nothing wrong with this observation though. Nonetheless, to calculate correct base rates, you might need a bigger sample size than what you have observed, ie. you will need to observe all 10% drop events, rather than simply focusing on the recession events only.

weijian, you make a good point here. Let me examine the 10% drops that have happened.

In the last few years, several have happened. Latest was in May-June 2013. My notes on that period say it was due to tapering and REITs correction.

Second latest was in April-June 2012. My notes say it was a time of Greece bailout was in doubts.

Third latest was in July-Aug 2011. My notes say that the US credit rating had just been downgraded.

At that time, I did not think any of those three events were going to lead to recessions, as I kept buying

I am curious, during GFC, what point in time did you know it was confirm going to be a recession? I use the term recession loosely to refer to a large fall in stock value, typically around 40%. Also, what allows you to make that confirmation, like news reports etc?

Thanks!