Look for sectors that crash more than they should in a market downturn, due to correlated forced deleveraging, and load up on them when that happens. The energy midstream/MLP sector is a good recent example, because a lot of those stocks were held in closed end funds in part for tax reasons, those funds all tend to use leverage, and because they have a maximum leverage ratio that they’re not allowed to exceed, they were forced to deleverage during the March crash, which caused more price drops and more deleveraging, and so on.
Look for sectors that crash more than they should in a market downturn, due to correlated forced deleveraging, and load up on them when that happens. The energy midstream/MLP sector is a good recent example, because a lot of those stocks were held in closed end funds in part for tax reasons, those funds all tend to use leverage, and because they have a maximum leverage ratio that they’re not allowed to exceed, they were forced to deleverage during the March crash, which caused more price drops and more deleveraging, and so on.