A Playbook for Bear Markets

Down markets are where good habits compound. When the music quiets, you can actually hear your own process. Prices go down, sure, but the signal-to-noise ratio goes up — fewer shiny things, more blocking and tackling. It’s not fun; it’s useful.

What to do

• Clean house. Revoke approvals you gave during the era of good vibes and bad opsec. Archive receipts. Reconcile basis. The future you who needs a tax lot number is begging you to become the sort of person who has one.
• Review theses. If you can’t explain it in one sentence to a bored friend, it’s not a thesis; it’s an aspiration. Keep the few that survive plain English. Retire the rest.
• Harvest losses, deliberately. Realize what’s below basis, rotate into what you actually want, and reset exposure on purpose rather than by accident. Less flailing, more choosing.

What to avoid

• Revenge trading. When you’re trying to get even, you’re already odd. Size down until you can think in probabilities again, not in feelings.
• Timeline doom. The feed is not a risk model. Replace scrolling with shipping. Ship is a verb here.

Small daily actions

• Read one primary source. Not a thread about the paper; the paper.
• Ship one small improvement. Even if it’s boring. Especially if it’s boring.
• Log one decision. You are your own compliance department; leave yourself a record.

Scenario: portfolio triage

• Bucket A (keep): Assets above basis with strong theses. Do nothing. Doing nothing is a position.
• Bucket B (rotate): Below basis but you still want exposure. Sell, then buy the better substitute you can defend to future‑you. The trade is the rotation, not the hope.
• Bucket C (exit): Below basis with a weak thesis. Harvest and move on. “Someday” is not a catalyst.

Operating constraints

• No new leverage. The market already volunteered to lever your emotions; you don’t need to lever your balance sheet too.
• Smaller sizes, longer horizons. Stretch time, shrink risk.
• Weekly review, strictly: approvals revoked, receipts saved, bids placed (not floors chased). Floors are for standing on, not sprinting after.

Bear markets are training. You are building the habits that will scale in the next cycle. The gains will look sudden later. They will be earned now.