Chapter 20: Crashes, Contagion and Opportunity
What we will cover in this chapter
- Every crash creates the kind of wonderful investment opportunities value investors dream of. Where are they most likely to be found?
- Whatever represented the epicentre of risk is most likely to experience type-3 base formation characteristics and could spend years ranging.
- The collapse of an internationally traded vehicle results in contagion spreading to comparatively unrelated instruments that will recovery much quicker.
- Even within the market that has just crashed there will be instruments that dodged the excessive risk-taking characteristic of a mature bull market and they will find themselves in very favourable positions.
- Look for signs of early ...