Extreme Market Cycle Strategy
Buffett-style patience applied to extreme market cycles with quantitative triggers
Current Market Status
Normal
S&P 500 CAPE
28.6
VIX Index
18.2
HY Spread
3.8%
Recommended Actions
Maintain 80% in safe liquid assets (T-bills, cash)
Watchlist: Prepare target prices for quality stocks
Set alerts for bubble/crisis triggers
Bubble Triggers
Inactive
CAPE Ratio > 35
28.6 / 35
Price-to-Sales > 3
2.4 / 3
Crypto Parabolic
Inactive
Crisis Triggers
Inactive
Commodities -50%
-12% from peak
Trigger Activation Timeline
Bubble Response Plan
Short Exposure
Index puts, leveraged inverse ETFs, or short overvalued sectors
Sell Frothy Holdings
Reduce exposure to assets showing extreme valuations
Rotate to Safety
Short-term Treasuries, gold, USD cash
Crisis Response Plan
Deploy Capital
In tranches (25%/25%/25%/25%) as market falls
Buy Undervalued
Broad indices (S&P 500, MSCI World) and quality companies
Commodities/Crypto
Accumulate at multi-year lows using historical metrics
Capital Allocation Strategy
Crash War Chest
Target Watchlist
S&P 500 ETF (SPY)
$380 target
Gold (GLD)
$150 target
Bitcoin
$25k target
Quality Stocks
-40% from ATH
Trigger Alert Setup
| Metric |
Current Value |
Trigger Level |
Alert Channel |
Status |
| CAPE Ratio |
28.6 |
> 35 |
Email, SMS |
Active
|
| VIX Index |
18.2 |
> 40 |
Email, App |
Active
|
| HY Spread |
3.8% |
> 8% |
Email, SMS |
Active
|
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