What are some strategies for timing a bottom?

Looking foolish vs Acting foolish

One example of Triggering of turning points(timing or trending or price to value)

In 1989, two natural disasters affected the insurance industry significantly. First, Hurricane Hugo caused billions of dollars of damage in the Caribbean and the Carolinas. Second, within weeks, California was hit by an earthquake causing insured damage that was difficult to estimate, even well after the event.

What Buffett did and the rationality?

Before the 1989 natural disasters, premiums in the insurance industry were inadequate. Unlike many others, Buffett stayed away from unprofitable businesses and looked foolish to let the competitors take more market shares. Any who took more market share lost more.

Immediately after the earthquake, the tables were turned. Given its strong financial position, Berkshire Hathaway offered to write up to $250 million of catastrophic coverage, advertising the offer in trade publications.

Insurance is a good business for free cash inflow but managers could make or lose money since the timing wrong. Market data intelligent analysis, high discipline to hit out at the right time, and big enough forces, set the tone for Buffett to win.

What Buffett said?

“When rates carry an expectation of profit, we want to assume as much risk as is prudent. And in our case, that’s a lot.” Taking large risks with adequate premiums is profitable in the long run but may appear foolish."

(wdongli: when market yields carry an economy growth rate too high, we need to assume as much risk as it prudent. when market yields carry an economy contraction too pessimally, we need to find qualities which could give us the yields for growth and survival.)

To this, Buffett responds: “We are willing to look foolish as long as we don’t feel we have acted foolishly.” The key lesson is to act rationally, regardless of how it appears to others.

Timing for margin of safety and good enough cash reserve vs your vision
What do you see Australia economies at present time:
1. After XAO rushed into a false GFCII guess, XAO is underpriced as a whole
2. GFCII needs EU defaults and China tips off. Possible but unlikely
3. XAO is underpriced is different from what we take is cheap and qualified.
4. No one is sure what will happen exactly. So could your hold your fish or swan until XAO finishes its building of rock bottom and get out of it? It needs cash reserve!
5. What is the qualified fishes and swans to you? Are you sure? Your confidence should define how big diversification you take and how you time average the rock bottom out.

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Timing is not just as important as qualities but it could decide you act foolish or look foolish too! If you are foolish in timing, you are direly foolish and would act foolish to pay too much for quality!

Have to say I still don't know quality! I missed a important thing in the market.

 

"I'd recommend looking into your ignore list. I know mine has been activated for certain forum individuals whose opinion I feel only cloud my own better judgement."

Not to worry. At the moment my list is short.