Stages of a bear market:
- Stage 1—Unwind: It may still feel like the good times, but the seeds of the bad are starting to appear. Mini-narratives of bad times to come are proliferating.
- Stage 2—Forced Capitulation: Positive narratives die and negative narratives reign supreme. Deleveraging spirals, layoffs, and company shutdowns.
- Stage 3—Bottomless Exhaustion: Long, painful nothingness. No positive narratives or catalysts for improvement. Extended period of darkness.
Interestingly, the seeds of the bull market are often planted at the beginning of Stage 3 and begin to take form during that period.
My perspective is simple: If you can be a buyer when everyone else is a forced seller, you are positioning yourself well for long-term growth and success. Being a buyer can take any number of forms—it can relate to accumulating talent, building new ideas, or creating new opportunities.
During periods of prolonged darkness, this is the playbook:
- Default Alive: Make sure your personal situation is “default alive”.
- Long-Term Orientation: Play long-term games with long-term people.
- Optimism: Realize that dark times never last forever.
- Bias for Action: Boldly act on new and exciting opportunities.
Credit: Sahil Bloom from The Curiosity Chronicals.
First princples 