Why would I buy stocks before a recession?

[ergophobe]

It turns out that stocks - on average through every bear market since the inception of the S&P 500 in 1957 - bottom in price a full 9 months before the earnings do. This is an extraordinary insight and the reason why the pros refer to stocks as an anticipatory vehicle. By the time earnings are reaching their cycle low, stocks have already been rallying for three quarters of a year in advance of that low.

https://www.downtownjoshbrown.com/p/why-would-i-buy-stocks-before-a-recession

[ergophobe]

And Josh's followup post
https://www.downtownjoshbrown.com/p/man-looks-in-the-abyss

[littleman]

>uncertainty

Josh's followup post is already out of date.  We have no idea what whims are going to manifest next week. These are no ordinary times.  Today Trump is talking about tariffs replacing income tax.  You might get lucky, but the smart move is to reduce debt and expenses imo.

[buckworks]

>> reduce debt and expenses

Yes.

I'm feeling the need to plan, almost like pandemic preparedness.

I'm starting to rebuild our supplies of food and other items ... practical prepper basics. Those are the stocks to invest in!

Also, I'm working to get necessary things done sooner rather than later, from dry cleaning to dental work. I expect that many things will become more difficult.

[Brad]

>prepper basics

In addition to the basics, I bought a couple of electronic items earlier than I was going to figuring problems with China or Taiwan.

I also stocked up on my favorite no sugar added cookies which are from Canada, but I need to restock because I ate them.

>reduce debt and expenses

This is about the best advice I've heard. 

[ergophobe]

>> You might get lucky

Because of all the uncertainty, Ryan Peterson (? CEO of Flexport global logistics) was saying that companies either relocated factories from China to elsewhere before all this hit or they are sitting still because the future is so unclear.

In other words, it's too late to get "lucky" - the "lucky" people made decisions before this year that set them up to weather this year.

The last president to pressure and bully a Fed chair in order to juice his numbers was Nixon, resulting in stagflation and the deep recession caused because by the time Volcker acted, the only path to success was deep pain which Carter and Reagan were willing take in a way that Nixon and Ford were not.

[ergophobe]

>> already out of date

Lately, I am constantly reminded of the line from Hannah Arendt, Origins of Totalitarianism (p.335), where she says, "One could follow the party line only if one repeated each morning what Stalin had announced the night before."

>reduce debt and expenses

This is about the best advice I've heard.

Good advice for good times and bad. These are exceptionally uncertain times, but not times are certain times. Such a thing doesn't exist and when the uncertain times come quickly, many people do not have enough runway to fix this.

Of course, some people are justifiably maxed and have little choice in this, but most people who are maxed have gotten there by slowly turning up the water temperature.

One of the shocking things for me as I have gotten older is

1. how much stuff I own. In my late 20s to mid-30s, I moved twice by airplane just by paying for two extra bags and twice with a Ford Escort. Now I would need a box truck. That said, most of it means nothing to me and I could walk away from lots of it without sorrow.

2. How high my fixed expenses have become (property tax and insurance principally) and semi-fixed expenses (food and utilities). Even though I don't have debt as normally defined, fixed expenses amount to functionally the same thing.