Why we insist on cycle timing

Why do we stress cycle timing?

The vast majority of institutions don’t time the market — they believe good managers and good assets rise over the long run, so finding quality assets, buying, and holding is the common practice.

But we must stress: the goals of institutions and of us ordinary investors are not aligned.

Institutions mainly earn management fees, while we ordinary investors mainly earn from our assets’ price appreciation and dividends.

So where you sit decides how you think — we must time the market!

Also, for a good holding experience, we want to make money in as many different cycles as possible.

Further, China’s and the US’s capital markets run on different underlying logic.

Most of the time ours is a ranging market, not a long-term upward grind like the US — so buying in bears and selling in bulls is one of the core premises for earning excess return in this market.

Another premise: even the best assets a manager picks still fluctuate with the cycle.

So essentially, it’s not that we don’t believe in long-term value, but that we believe more in cycle as one of the core laws of capital markets.

⚠️ This article is a methodological framework for illustration only and does not constitute any investment or trading advice. Markets carry risk; decisions require caution.