[lamontcg]

Don't invest for the winners in the recession.

Invest near the depths of the recession for the winners of the recovery where everything looks like its on a firesale.

The problem is of course timing the bottom. And resisting the emotional urge to think nothing could ever recover.

The 2020 extraordinarily V-shaped recovery surprised me a lot.

Given that nothing financial is really popping that hard and a lot of the headwinds we're facing now are just high commodities prices, bullwhip effects from the pandemic, and China is shutting down again, all of those factors are likely to be temporary so any near-term recession is likely to be V-shaped as well.

I suspect this is just a correction and we're close to maximum pessimism and investors should start looking for what to buy in the near term. And if you didn't already sell then you're probably too late and would be looking at locking in any losses that you had and missing the rebound.

But this is a description of conditions as they are today, not a crystal ball of the future. If something detonates tomorrow everything could change (and literally if Russia launches some nukes at Kiev tomorrow everything may change in an instant -- but I'm more considering a financial detonation).

[maerF0x0]

> The 2020 extraordinarily V-shaped recovery surprised me a lot.

Printing and living on monopoly money really helped. Instead of running faster we simply made the ruler shorter.

[pinky1417]

While I agree with much of your first couple sentences and resisting the emotional urge to think recovery is impossible, you're walking a hazardous line between believing recession timing is effectively impossible and trying to ballpark near term recession risk.

I preach this: nobody can reliably predict recessions but everyone should know recessions will happen. It would be damn near impossible to predict recessions if you had a single large country only trading with itself. Throw in the billions of people in the global economy, each a market participant, and the task becomes intractable. The macroeconomists and policy wonks sound much like you do: identifying real risks and evaluating sentiment in an attempt to convince others, and themselves, that they have special insight. I try not to be a cynic - there's enough negativity on HN - but I really think recession prediction is an exercise in futility.

Still, it's critical to expect recessions. Buying stock in a company that's selling for 100x revenue and would go bankrupt in the event of a recession is gambling. Likewise, leaving the market and putting your money in gold, Bitcoin, your mattress, etc because you think recession is around the corner is likely to burn you. Yes, Michael Burry and The Big Shorters made a ton of money betting on what would coincide with a recession... but some of them would've gone broke had the timing stretched on even longer.

In short, your best bet if you're scared of recessions is the same as your best bet if you're in a boom or in the middle of a recession: buy undervalued assets and hang on to them long enough for everyone else to recognize their value. And, since recessions happen regularly at an irregular interval, your job will be made much easier if those assets can simply survive a recession.

[iancmceachern]

I took the question differently, but I may be wrong. I took the question as which tech industries will do well in the coming recession so as to work for them and have solid dependable employment during the recession, not how to invest to take advantage of it. I suppose I took it that way because that's my place in the world (a worker not an investor).

[AnimalMuppet]

So if you're sure that it's going to go into a recession, you invest in medium-to-long-term bonds, because recessions cause interest rates to fall, and bond prices go up as interest rates fall. Then, approximately when the recession hits bottom, sell the bonds and buy stocks.

Note that this requires that you approximately time the market twice, which can be difficult. Also hazardous.

Note well: I am not a financial advisor. Follow this advice at your own risk.