Timeframe of next correction

[wescobrk]

Obviously, I'm not looking for an exact day or month, but what is everyone's guess of the next 15-20% decline?

I've read one happens every 5 years. I believe the last one we had was in the summer of 2011. We are 5.5 years in.

 

 

[Guest]

A correction (technically) is usually a 10% drop or more. So the last one I believe was late 2015/feb 2016.

 

Folks have been waiting for a  bigger correction for a while:

 

http://thereformedbroker.com/2013/08/20/a-field-guide-to-stock-market-corrections/

 

[DooDiligence]

I'm gonna go with these 2 guys

 

http://www.businessinsider.com/howard-marks-warren-buffett-quote-on-media-fake-news-economists-2017-1

 

and keep searching for fair deals on quality...

[OracleofCarolina]

I have no freaking clue..hope this helps.

[chrispy]

As everyone has said, it is impossible... 

 

My main question is trying to figure out how much cash to hold at all times.  I am assuming it is proportional to (overvalued holdings that are sold off) - (high quality deals that can be found and purchased)?

[Uccmal]

Eventually. 

 

Its easier to work bottom up.  As my stocks hit new highs I take a little off the table, bit by bit. 

 

I was just looking at my accounts, trying to figure where I can trim. 

[Paarslaars]

Same here, don't want to sell BRK though. :-\

[wescobrk]

Thanks for everyones comments.

There was a little bit of truth to my comment as Buffett has spoken in the past when the market was elevated (such as in 2000) he predicted the returns would drop to I believe mid single digits. We have seen his cash rise a lot with the market is elevated, technically he is't "timing" because obviously no one knows when it will happen, but he is timing to some degree because he is calculating a lot lower rate of return if he buys at high levels, so clearly somewhere in the equation is a drop over some time frame, just like his statement about 10% probability in any given year means 99.5% change it'll happen over 50 year period.

 

Buffett is timing, I believe, it's just over a multi year period. This is an arbitrary number, but I believe when a market is overvalued, his calculation is that happens say, within a 5 year period.

[rkbabang]

August 7, 2019 at 10:24 AM. Give or take a few years.

 

[DooDiligence]

Thanks for everyones comments.

There was a little bit of truth to my comment as Buffett has spoken in the past when the market was elevated (such as in 2000) he predicted the returns would drop to I believe mid single digits. We have seen his cash rise a lot with the market is elevated, technically he is't "timing" because obviously no one knows when it will happen, but he is timing to some degree because he is calculating a lot lower rate of return if he buys at high levels, so clearly somewhere in the equation is a drop over some time frame, just like his statement about 10% probability in any given year means 99.5% change it'll happen over 50 year period.

 

Buffett is timing, I believe, it's just over a multi year period. This is an arbitrary number, but I believe when a market is overvalued, his calculation is that happens say, within a 5 year period.

 

Semantics

 

I think most of us here are timing, just not in a broad sense.

 

Waiting on individual issues to be priced right & in my case, holding until the time is right...

 

(timing is everything & patience is a virtue!)