Secular bear strategy: pick your points, forget buy and hold

Worthwhile discussion this week on Bloomberg Surveillance between Jim Bianco, president of Bianco Research LLC and Barry Ritholtz, CEO and director of equity research at Fusion IQ talking about the need for capital preservation as the main objective during secular bear markets. Gains should be respected and collected as golden gifts, and losses should be shunned as the plague.
Listen here
The key is to have a method for carefully picking entry and exit points. No method is going to be perfect timing. But having rules about how, when and what risk we are willing to expose our capital to is crucial to the goal of survive and thrive these times. As my high school science teacher used to say: “stand for something or you'll fall for anything.”

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One Response to Secular bear strategy: pick your points, forget buy and hold

  1. Anonymous says:

    Hi Danielle
    A quote by Robert Rhea (he wrote about the Dow Theory in the 30’s).
    “Bear markets seem to be divided into three phases: the first being the abandonment of hopes upon which the final uprush of the preceding bull market was predicted; the second, the reflection of decreased earnings power and reduction of dividends, and the third representing distressed liquidation of securities which must be sold to meet living expenses. Each of these phases seems to be divided by a secondary reaction which is often erroneously assumed to be the beginning of a bull market.”

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