No. of Recommendations: 2
I am trying to reconcile what Zeelotes and Jim are saying about bear markets.
Zeelotes: Most money (at least by him) is made in bear markets as the drop is far sharper than the rise in a bull market.
Jim: When a bear market starts you don't have to hurry, have a lot of time, as even after 2-3 months the drop is just 10%.
(Apologies on both if I quote incorrectly, but that's how I understand them.)
So a bear for several months is only "crawling" but after those months it's quite abruptly and sharply going down? Psychologically seen as kind of: After years of a bull market it takes a long time until market participants are realising it really is over, but then this realisation gains more and more momentum, leading from scepticism over "hm, maybe..." to outright panic?
So that one could use this slowly changing sentiment to time buying inverse ETF's or Index Puts?