After 25 years of dabbling in the markets, I seem to have developed a bit of a nose for impending corrections. I can’t put my finger on exactly how or why, but last Wednesday to Friday I liquidated a good chunk of my portfolio.
I don’t think we’re near the bottom yet, as there still hasn’t been a sense of “capitulation”. I’ve spent the past few days pulling together and adding to my watchlists for the eventual recovery. I’ve categorised them into types eg. Deep value, growth (GARP to be precise), momentum etc.
Unfortunately my note-taking wasn’t great in years gone by, and I cannot for the life of me remember which shares seem to be the earliest initial climbers. Most textbooks tell me that cyclicals and value stocks are the best first stage advancers. However, Mark Minervini and other momentum\trend traders seem to prefer stocks which haven’t declined much during the correction, and to keep an eye out for “leaders”. These views seem to conflict, however.
Does anyone have a better memory than I do, and can recall what happened in the evenutual bounces post 1987, 2008 etc? Does anyone have a plan on how they intend to deploy cash during recovery? (Those long term buy\hold can ignore this question!).
Thanks!
My plan is high quality with the highest ROCE with net cash and drip the money in over a few months.
