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Why I DISAGREE With Mr. Loo's "Crash Buying" Strategy

Boon Tee · Checked Mar 17, 2026
Overall Verdict
MOSTLY TRUE

Summary

Boon Tee analyzes Mr. Loo's "crash buying" strategy (deploying cash at 10-30% S&P 500 drawdowns) versus a simple lump-sum approach. His core conclusion — that lump-sum investing beats market-timing strategies on average — is well-supported by decades of academic research and major financial institutions (Vanguard, Morningstar). The specific S&P 500 crash dates cited for the COVID period are accurate, the long-term ~10% annual return figure is correct, and the referenced Peter Lynch quote and Jeremy Siegel's research are faithfully represented. The backtesting methodology is sound, though the analysis uses price-only returns (excluding dividends) and simulates cash at 3-month T-bill rates, which he transparently discloses.

Claims Analyzed (8)

4:17
"The first 10% S&P 500 drawdown from the pre-COVID peak happened on February 27, 2020"
TRUE
The S&P 500 peaked at 3,386 on February 19, 2020. During the week of February 24, the index fell 12% — the biggest weekly decline since 2008. By February 27, the S&P 500 had dropped well past the 10% correction threshold from its all-time high.
https://en.wikipedia.org/wiki/2020_stock_market_crashhttps://www.cnbc.com/2021/03/16/one-year-ago-stocks-dropped-12percent-in-a-single-day-what-investors-have-learned-since-then.html
The exact date aligns with market records. The S&P 500 officially entered correction territory (10%+ decline) during this week.
4:29
"The COVID crash saw the S&P 500 draw down over 30% by March 20, 2020, with key buying dates on March 9, 12, and 16"
TRUE
The S&P 500 fell 34% from its February 19 peak to its March 23 trough — a 32-day bear market, the fastest in history. March 9 ("Black Monday I"), March 12 ("Black Thursday"), and March 16 ("Black Monday II" with a 12% single-day drop) were all major crash dates during this period.
https://en.wikipedia.org/wiki/2020_stock_market_crashhttps://www.statista.com/statistics/1175227/s-and-p-500-major-crashes-change/
The 30%+ drawdown threshold and key dates cited in the video match historical records precisely.
11:47
"The S&P 500 long-term annualized return is about 10%"
TRUE
Since 1928, the S&P 500 has averaged approximately 10.02% annual return. Since 1957, the average is 10.33%. Over the last 100 years, the annualized return is 10.42%. This is one of the most well-established figures in financial history.
https://www.macrotrends.net/2526/sp-500-historical-annual-returnshttps://www.fool.com/investing/stock-market/indexes/sp-500/annual-returns/
The ~10% figure is a nominal return including dividends. Boon Tee correctly notes it varies by exact start and end dates.
15:40
"The crash buying strategy works best when your start date coincides with a market peak just before a crash, but underperforms when no crash materializes"
TRUE
This is logically sound and consistent with financial research. A crash-buying strategy benefits only when a crash occurs shortly after the strategy begins. If markets continue rising (as they do roughly 75% of calendar years), holding cash creates a drag on returns. Vanguard and other research confirms this dynamic.
https://investor.vanguard.com/investor-resources-education/news/lump-sum-investing-versus-cost-averaging-which-is-better
This is perhaps the strongest analytical insight in the video — demonstrating that cherry-picking start dates near market peaks creates a survivorship bias favoring the crash-buying strategy.
16:19
"Lump-sum investing on day one outperforms crash-buying/market-timing strategies on average by about 0.8% annualized"
MOSTLY TRUE
Vanguard research using MSCI World Index data (1976-2022) found lump-sum investing outperformed dollar-cost averaging 68% of the time globally and about 75% of the time with 100% stock allocation. J.P. Morgan, Morgan Stanley, and Hartford Funds research all corroborate that "time in the market beats timing the market." The specific 0.8% figure is from Boon Tee's own backtesting, which uses reasonable methodology (all possible start dates from 1981-present).
https://investor.vanguard.com/investor-resources-education/news/lump-sum-investing-versus-cost-averaging-which-is-betterhttps://www.cnbc.com/2021/08/12/which-investment-strategy-is-better-lump-sum-or-dollar-cost-averaging.html
The exact 0.8% figure is from his own analysis and cannot be independently verified without replicating his model, but the direction and approximate magnitude are consistent with published research. He notes including dividends would widen the gap to ~2%.
17:07
"S&P 500 dividend yields were higher in earlier historical periods and lower in recent periods"
TRUE
S&P 500 dividend yields have declined significantly over decades. In the early 1980s, yields were around 5-6%. By the 2000s-2020s, yields fell to approximately 1.2-1.8%. This is a well-documented trend attributed to increased share buybacks replacing dividends.
https://www.macrotrends.net/2526/sp-500-historical-annual-returns
Boon Tee correctly identifies this trend and notes it would further widen the gap against the crash-buying strategy if included in the analysis.
21:47
"Jeremy Siegel's "Stocks for the Long Run" shows that over 200 years, stocks vastly outperform cash after accounting for inflation"
TRUE
Jeremy Siegel's research, first published in 1994 and updated through multiple editions, shows stocks returning approximately 6.5-7% per year after inflation over 200+ years (since 1802), far outpacing bonds, bills, gold, and cash. Cash holdings lose purchasing power after inflation.
https://en.wikipedia.org/wiki/Stocks_for_the_Long_Runhttps://knowledge.wharton.upenn.edu/article/jeremy-siegel-why-stocks-are-still-durable-in-the-long-run/
Some recent scholarship (McQuarrie, 2025) has challenged the consistency of stock outperformance over bonds in certain historical sub-periods, but the core claim that stocks outperform cash over the very long run remains well-supported.
22:33
"Peter Lynch said: "Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in the corrections themselves""
TRUE
This is a verified and widely attributed Peter Lynch quote, originally from a 1995 interview with Worth magazine and also found in his book "Learn to Earn."
https://finance.yahoo.com/news/peter-lynchs-market-observation-far-221013428.htmlhttps://247wallst.com/investing/2025/02/05/legendary-investor-peter-lynch-says-far-more-money-has-been-lost-by-investors-preparing-for-corrections-and-hes-spot-on/
The quote is accurately represented and used in its proper context to support the anti-market-timing argument.

Source Quality

Boon Tee uses primary S&P 500 price data from investing.com (1981-present) and 3-month US Treasury bill rates for cash returns. He transparently discloses limitations: price-only returns excluding dividends, and data starting from 1981 rather than the full S&P 500 history. He references well-known financial literature (Jeremy Siegel, Peter Lynch) and directly replicates Mr. Loo's Excel model for validation. The methodology of testing all possible start dates rather than cherry-picked examples is a rigorous approach common in financial research.

Transcript

The Crash Buying Strategy Under the Microscope

Malaysian finance YouTuber Boon Tee takes a data-driven look at a popular crash buying system promoted by fellow creator Mr. Loo (of the 1M65 channel). Rather than dismissing the strategy outright, Boon Tee builds his own backtesting model to determine whether waiting for market drawdowns to deploy cash actually produces superior returns compared to simply investing immediately.

Mr. Loo's Crash Buying Framework

The strategy is straightforward in its rules: start with $200,000 in cash and wait for S&P 500 drawdowns from the all-time high. At a 10% drawdown, deploy 10% of capital ($20,000). At 15%, deploy another 15% ($30,000). Continue through 20% and 25% drawdown levels, and at 30%, deploy everything remaining. If the drawdowns never materialize, you simply hold cash.

Mr. Loo demonstrated this strategy using an Excel model with three carefully chosen start dates. Starting from November 29, 2019 — just months before the COVID crash — the strategy deployed all $200,000 by March 20, 2020 and grew to $557,000 by the present day, versus only $442,000 for a lump-sum approach. Two other start dates (October 2021 and December 2017) similarly showed the crash-buying strategy winning.

The Problem of Cherry-Picked Dates

Boon Tee's key insight is methodological: three favorable start dates do not prove a strategy works in general. Using S&P 500 data from 1981 onward (sourced from investing.com), he runs the crash-buying strategy from every possible start date and compares it against simply investing the full $200,000 on day one.

The results are revealing. Starting from September 1, 1981, the crash-buying strategy produces $11,247,000 while lump-sum yields $11,287,000 — virtually identical at 9.5% annualized returns each. But this masks enormous variation depending on start date.

When the start date happens to fall just before a major crash (as Mr. Loo's three examples did), crash buying naturally outperforms. But when markets continue rising without a significant drawdown — which happens far more often — the crash buyer sits in cash watching the market climb, suffering from what finance professionals call cash drag.

The Verdict from Exhaustive Backtesting

Averaging across all possible start dates from 1981 to the present, lump-sum investing outperforms crash buying by approximately 0.8% annualized. This may sound modest, but compounded over decades, 0.8% creates an enormous difference in terminal wealth.

Boon Tee further notes that his analysis understates the gap because he uses price-only S&P 500 returns (excluding dividends). Since lump-sum investors receive dividends immediately while crash buyers hold non-dividend-paying cash, including even a 1% dividend yield would widen the advantage to approximately 2% annualized.

Why Lump Sum Wins: Time in the Market

The explanation is intuitive once stated: the lump-sum strategy maximizes time invested in the market. Since equities have historically produced positive returns in the majority of years, every day spent holding cash waiting for a crash is statistically likely to cost you money. As Boon Tee summarizes, drawing on Jeremy Siegel's Stocks for the Long Run: over 200 years of data, stocks have massively outperformed cash after inflation.

He closes with Peter Lynch's famous observation: "Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in the corrections themselves."

A Balanced Assessment

Despite the quantitative verdict, Boon Tee is careful to credit Mr. Loo's contribution. From a behavioral perspective, the crash-buying framework gives investors a structured plan that turns market panics into buying opportunities rather than selling triggers. For investors who would otherwise panic-sell during crashes, having a predetermined buying schedule at drawdown levels could prevent far more destructive behavior.

The tension, as Boon Tee frames it, is between what is quantitatively optimal (lump-sum) and what is psychologically sustainable (crash buying with predetermined rules). For most investors, the strategy that prevents panic-selling may ultimately produce better real-world returns than the theoretically superior approach that they cannot emotionally sustain.

Show raw transcript with timestamps

[0:00] Few days ago, Mr. Lou, he had a YouTube live session and he talked about a powerful simple crash buying system. So for those who don't know Mr. Lou, he's creating YouTube content for a while already, especially right after COVID period, right? I think there was a couple of market kind of like crashes or market deep. He's the one that on his YouTube on his telegram group. He's guiding people into like crash buying. I think all this while right his so-called crash buying right is more like view based meaning that he will look at market deep and then he will study the economics and then he will give commentary. then he will tell people when he deploy his uh dry powder right so I think there are many people actually uh follow his core one meaning that people saw him bought into the market by the day they also follow I think this is definitely true and I think the more interesting part about this video is that he's not just talking about on high level wait for market crash and then buy it's not like that he really come up with a strategy with specific draw down numbers and specific allocations that he's going to deploy so that's why I I find it quite interesting because once you have this kind of rule that you can formalize right then you and run all these what we call back testing meaning that you just take the

[1:00] strategy and then you run through the historical period and then you just look at the result whether it it makes sense or not. So basically today I'm going to cover whether this crash buying system whether it works or not and everything will be based on data analysis and not so much about my own opinion just to give you all a bit of introductions uh because if you don't know about this video you don't know the content it's a bit hard for you to follow. So I will give you a bit of intro but I strongly encourage you to uh go to his 1 M65 YouTube channel and then you click on the live section right and then I think the video is still there you can click into it. I think this video is about 1 hour length. It's quite interesting because he really have an Excel model that try to simulate the actual buyings. So that's what he did. So this is the Excel spreadsheet that he created. So you see that there's a button up and down here, right? This is when he one click it means that you you move to next day, next day, next day, right? And then his strategy is summarized in this table here on the right hand side. So if you look at this uh let me zoom it up for you. So basically his strategy is that if market drop 10% right then he will deploy 10% of his capital and his capital is always stuck with 200k. So

[2:01] 10% of 200k is 20K. If he did 15% right then he will deploy 15% meaning 30,000s and so on and so forth. So if really market drop by 30% right he will deploy all this money in total he would deploy 200,000s and all this deep right or also called drop right is uh what we call draw down. Draw down meaning that if you you see market come to a peak right and then from there it drops slightly right you always compare today's price versus the all-time high prices. So that that's what we call draw down. So you need to experience this draw down 10% 15 20 25% then only you buy. If there's no draw down right and let's say from his starting point right no draw down let's say you can have draw down of 2% 5% 8% it doesn't hit the this 10% right then he will just keep on holding cash basically that's the strategy that he's trying to come up with and quite interesting is that he really simulate right so he for example he give a date right uh starting with a date and then he put key in the date and then he just click next next next and then if it hits the level and then he will just record a buy transactions and then he will put into his spreadsheet and then he will calculate his P&L basically just look at

[3:03] that 200k Okay, how much it will grow. So basically that's the strategy and then let me give one example here. Okay, so because I I need to study whether it works or not, I I need to validate it, right? So I come up with my own uh data and the data wise is quite simple. Basically, we only need the S&P index and then you can model uh his strategy, right? Say for example, if it drop 10, 15, 20%, then you will buy and and these are the date of the purchase. In terms of the data that I have, right, I have a longer data. I pull out the data from 1981. Uh so this is the longest one that I can get from investing.com. Of course S&P 500 it is longer but I think 1981 is quite long already. Uh we have like 44 years of data. So similar to his strategy start with 200k. So basically I try to uh mimic his strategy. Okay. So I can give one example just to make sure that my formula here right actually is the same as his one. So let's say I start from 2019 29th of November which is one of the example that Mr. Lou has provided. Okay. So based on this strategy here right you can see that okay my model here because I I I don't

[4:03] do like manual things right I just you know based on the formula I just know that okay if on 2019 November 29th right let's say on that date right suddenly we're handed with 200,000s following his strategy right I will just wait for the first 10% crash and then I will buy right and the first 10% crash happened on 27th of February 2020 so this is like a couple of months after the start date meaning that you wait like about 3 months right then 10% draw down then you buy 10% then After that on 9th of March you buy another trench with it which is 15% and so on and so forth and then by 20th of March right you will deploy all 200,000 already because really the market draw down right already exceeded 30%. So basically this is my formula here. So if you look at all these by dates right they are the same as the one that provided by Mr. L. So basically this is the one that I screenshot. Okay the top part right is I took it from his YouTube video. So you can see the date actually they all match right? So uh 27th of February here 27th of February then 9th of March 12th of March and then 16th of March. So basically this is his strategy and he just want to say that okay he started with 400,000s right and

[5:03] if you deploy all your money 20 March 2020 right then after that you just stay invested you don't you you just do nothing and then until today right you will have 557,000 already this is the total gains right meaning that total gains is about 357,000s because your investment started with 200k okay so basically this is the money that he earned so he say wow his strategy really really works so okay now that that's the thing right if you want to say a strategy works or not, right? We need to compare against something. Let's say if we compare against just take that 200k just put in bank account or even hold that 200k in cash meaning that you earn zero, right? If this number is not 557,000, it is just 20,000, right? You still gain 1,000. You will just say, okay, it works. Okay, I earn 1,000. I earn money that still works. But should we compare against not investing, just hold on to that 200,000s. I I think that's not a good comparison because it is very hard to imagine someone who will just hold on cash for many many years right let's say if you start from 1981 you hold cash until now of course you will lose out right so I I just want to

[6:04] say that okay aside from this so-called crash buying strategy right I have another strategy which is just I just call it like just all in S&P 500 okay what's the meaning of just allin so instead of like waiting for the market to drop 10 15 20% right I would whenever I'm handled with that you know power of money right I would just all in 100% day one no need to for all this threshold straight away all in but we want to compare these two strategy right we need to start from the same date right so let's say I I just follow this uh date 29th of November 2019 right so based on his strategy right I will deploy on all this date and then end up out fast forward to today I will have 557,000 if on 29th of November 2019 right I just don't wait I just all in okay then right now today I will have 442,000 so you can see right 442 versus 557 my strategy lose up really his one is really you wait for the market crash then only you buy it works. Okay, based on his strategy here, can we just based on this and conclude that this strategy is superior? Uh, so this is the question that I want to pose to you, right? Maybe you can pause here and just think for a while like what just look at this. Would you rather to have 557,000s or just

[7:06] 442,000s? Of course 557,000s, right? You earn more by waiting for the crash, waiting for the dip to for the crash, then only you buy. And when you buy at lower prices here, right, as compared to on 29th of November, right? Of course you earn more, right? Very simple. But what's the problem of this strategy? Okay, so the problem of this strategy is that it whether it works or not, it really depends on your start date, right? But I think in Mr. Lou videos, right, he provided three dates as three starting point. Okay, the first one is this November 2019. Then after that, you have a cover crash, right? Then I think the second one he provided is 2021 29th of October. It's arbitrarily by Mr. L, but I just copy his date. So if you use this date, right, and then you start from 2021 October, right? You don't wait you wait until 2022, February, May, June, September when it hit all this draw down level, right? Then only you buy into the stock market, right? And even that, right? The 30% never hit, right? So you just keep cash. Okay, even with that, right, you will have 327,000s, which is more than by strategy, which is just all in on this

[8:06] start date here, 29th of October. Okay, so still win. Okay, this is the second date that he provided. And then the third one he provided is 29th of December, 2017. And then he just uh wait until you see February you hit the draw down already you buy and then after that the rest you will deploy in December 2018 and then the rest in March anyway when you hit all this draw down you will deploy okay so you successfully deploy all and then today you have 591,000s instead of all in on 29th of December 2017 you will only have 519,000 on three dates right you won't his strategy is superior strategy one as compared to mine but the question is this right are you sure that this kind of strategy right works on every day okay so when I say I start from this 1981 right it's not like it's not arbitrary by by me it's just based on investing.com that all the data that I have right is is from 1981 September 1st of September okay imagine right let's say if I do this right you see if you wait for market crash right you will wait until 1982 and then you successfully deploy 25% then the rest you have to wait like 5 years to deploy because you need to wait until October 1987 then only you

[9:07] are able to wait for that 30% draw down in between right 1982 to87 right you are actually holding cash and when you are holding cash let's say market is ringing or slowly climb up, right? You are losing out in terms of like you basically hold cash and usually hold cash over the long term they don't earn as much, right? So that's why you look at this this investment account, right? You will end up with 11,247,000. But if you just all in on day one, right, you will have 11,287,000 which is more. Okay, but in terms in terms of the average return, right, you get 9.5% based on his strategy and then mine also 9.5%. Not not that different. Okay, the difference here is only like 0.0%. Okay, but imagine if I run these things, right? Not just one scenario. I don't cherry pick. Okay, basically I just run this. Okay, day one, I run this and then I look at the difference. 0%. Okay, then I repeat this for day two. Okay, then I I check again. It's 0%. And I keep repeating this, right? Day three, I start from day three, wait until today and then see what is the percentage, right? You just do this right for all the data points. Then you look at the result, right? Which what I want to show here. But before that right I I'll just

[10:08] say that because based on what all the data that I have just shown right let's say imagine that I I just start from this specific date right instead of the dates provided by Mr. blue, right? If you start from October 27, 2023, just another arbitrary date, right? It's actually cherrypicking, okay? You you actually following his strategy, you only deploy 25%. Then after that, you keep cash until today. So, you end up having 244,000s. But if you just all in on day one, right, you will have 337,000. So, this strategy, actually, I think my strategy is better. Okay? That's why I say you have to really run all the possible start date, right? Because we don't know when you would be handed that 200,000s, right? You have to try all the dates, right? Then only you can compare these two strategy and you can tell these two strategy on average which one is better right. So just now I say I repeat all these for all the dates right if you want to look at the results right is actually the first one right by Mr. L strategy they will look something like this this chart here right for every data point on this chart right so for example I just choose a date on 1988 right so this point here so what it means is that if you are handed 200,000s

[11:08] right and you follow his strategy right and then invest until today what's the return that you will get you'll get 7.61% 61%. So that's just one data point and every date right you will just repeat the same thing and then you will just wait for the draw down and then only you buy and then invest until today you will have all this money right so the three data point provided by Mr. blue right uh I I try to circle that around this region here. So say for example here right you get something like quite a high return right let's say 14% and then here is even higher right so say for example let's say the this is one of the date that he provided right you see this 18% this is the annualized return that you'll get following his strategy so you can see that so that's the point that was picked by Mr. blue and then the third point is around here. So all these point right you notice that they are above 10% because S&P 500 over the long term right their return is about like 10%ish depending on your exact start date and exact end date but you can see if you follow your strategy based on this chart here right you will end up out more than 10% which I mean based on his his argument is that these three dates right it shows that it is superior okay so this is the line let's say if you follow my strategy which is just all in on day one and then hold

[12:09] until today right you get this line here right and this line here you can see they also depends on your stud say for example let's If your start date is around year 2000, right? Then after that you just all in on day one, right? And then we all know that from 2000 to 2010, right? You have two market crashes, right? So you actually just start at bubble and then you just hold until today, you you will have much lower returns which is around only 6%. But let's say if you start way earlier, right, in 1981 and of course you can get something close to 10% and then of course if you start right after global financial crisis around 2009, right, you will get get something like close to about 14%, right? So you have very different results uh comparing these two strategy and what we need to do right is just you take his strategy minus my strategy and then you see whether it is above zero or below zero and that is the chart that I'm going to show you here. So this is Mr. Lou strategy crash buying minus my allin just all-in strategy you get something like this so you notice right the zero% right is somewhere around here okay this is the 0% here and the three points that picked by Mr. blue right they are better which I just shown

[13:09] right I say that okay if you pick these three dates the the numbers is above 0% because his numbers is better than mine okay so these three red line and just I also provided uh some examples right let's say if I buy around 2012 right let's say 2012 is uh you can you can just pick another like one of the date right you pick one date here or you pick one date here right you will end up just getting a lot better result based on or in I give another one example so this is another example right just to check whether our our numbers is correct or not. Right? So let's say if you start in June 2020, okay, you follow his strategy, right? You depart on these four digits here and then you end up only with 328,000 but you just all in on day one, right? You get 454,000. This is like know quite different 9.2% versus 15.7%. Why? Because on this date here, you just buy you already picked up the market before it rally, right? So you just all in here and then you just ride through all this instead of like wait until wait the entire 2021. If you want to look at the difference, right, just to show you the date just now, okay, that that's the starting date, right? 20

[14:09] 2020 June here, right? You say I want to wait until 10%, 15%, 20% and 25%. My strategy is that day one here, you straight away buy already. Okay? And then you just write on the market up and then market down, you just write only until today. So that's the return that you get if you follow my all-in strategy. But if you wait for Mr. L strategy, right? Basically, you are not deploying money for quite a while. You see, for about one year each year and then after that, okay, market really crashed in 2022. Okay, all this you know slow down in economics then you deploy here you deploy here you deploy here and then you really hit 30% right so your strategy really works you deploy here right so you buy here but if you look at the chart here right deploy here and here when there's market deep right actually this level here right is still higher than the start date here that's why his crash buying strategy is worse off as compared to just buy on day one all in right so you can see that's the difference just to to give you some some idea this is basically showing the draw down here to illustrate that yes although if you just based on his result here and then you say that I only had 200,000s I follow my strategy everything I just follow I end up with 328,000s you

[15:09] earn 128,000 right if you don't compare with anything else you will say that okay my strategy works I earn 128,000 by waiting for market crash and then just buy on the deep and then just hold on to it right but someone else will just say that okay I just know whenever I have the money regardless of when I get the money 200,000s on day one I just lump some on on day one that kind of like even a simpler strategy right you get something like 154,000s on this specific date. So that's why I I say that it all depends on your start date. Different start date you will have different result. So if you look at this chart here, right? Let's say if your start date is somewhere around here or here or here, right? Then wait for market crashes, right? Your result will be better. I think all this date right coincide with just the market peak before the market drop. Okay? If you wait for market crash, of course it is better, right? But if your start date is the green green circle here uh here or somewhere around 1990, right? You want you want to wait for market crash but it didn't happen, right? So you just they one lump sum a lot better. You you get a much better result. And just for your information, if I just take an average of all these numbers, column C is

[16:09] strategy one. Column D is strategy two, right? Strategy one is uh Mr. Lou crash buying, right? Let me just calculate for you quickly here. So average okay. And then you just take his one minus. So actually just lumpsum on day one, you get like 0.8% higher. And 0.8% right. If you compound 0.8% for long enough, the difference is very very big one. Okay. Oh just just for your for your information. So it can be very big and secondly right even the data right that I have here right I just assume that I invest in S&P 500 okay basically I just earn the price return okay not even the dividend because uh dividend data is a bit harder to get I just don't bother to get it okay but for if you keep cash right actually I take the 3 months T bill just to simulate that okay assuming that if you don't invest you keep in cash you will earn that 3 months uh US treasury bill as your cash uh returns so just to make sure that we all compare to be fair to those who just hold on to cash so that you get a little bit of you right uh and and for S&P 500 let's say if you include the dividend right and we all know that I think throughout history right depending on which period that

[17:09] you're looking at if you look at the recent period I think dividends is a lot lower and earlier period is actually higher if even 1%'s uh the dividend use of 1% across right then you get close to 2% difference difference by just waiting for crash it actually make your result worse off on average so that's why I would say that sometimes although all this crash buying strategy right it works on paper, right? And it based on the strategy that we just seen, right? It works if you just say that, okay, it works uh I I define it works by just having some positive returns, right? It it sounds good, right? But actually, if you just compare against another simpler strategy which is just all in on day one, right? Actually, all in on day one have better results on average. So that's the key point that I want to tell you. But with that said, right, I have to give some credit to Mr. Der because you know, not everyone is like him trying to educate people on investing uh on like almost every day. I saw him his frequency publishing videos is so high, right? So I have to give some credit to him for coming up with this Excel spreadsheet just to help people to learn about all this investment right and

[18:09] sometimes even though I say that my strategy tool which is just all in on day one is better than than his strategy of crash buying right but I I do feel that let's say from emotional point of view right let's say if you you condition yourself to say that okay I only buy when market is crashing right you you are actually conditioning yourself to take advantage of market crashes instead of panic during market crashes because you know let's say when market experience some sort of draw down there's some sort of crisis right you are you know emotionally we feel very a bit how to say we we worry about our portfolio and when you feel worried right you will tend to want to do something regardless of what it is you just feel okay I need to act I need to act right so I think that is perfectly normal so anyone who have experienced all this market crashes right they will know that okay whenever market have some sort of crisis we get worried and we just want to do something and if you don't have a framework right you just say okay I lump sum on day one right and then suddenly market is like having a crisis Right? Then your your next panic action could be just you want to sell, you want to park in cash, you want to wait for the uh crisis to be over then then only you you start to think about

[19:10] whether come back to the market again. That is the worst kind of investing because when market crashes right what we wanted to do is that if you have money you want to buy more because those are the period where you can buy at a much affordable level. So I I 100% agree with Mr. D on this. That's why when he come up with all these tools right to help people instead of like thinking should I panic now you are thinking about oh I have a p of cash which save out already now I can deploy you condition yourself to do the right thing during market crisis which I appreciate I think that that is the right thing to do it it's just that me um coming from like a nerdy kind of perspective right and I just think of like if we try out all these period instead of like cherry picking one or two three data points right does this strategy really work that's the thing that I want to try out so that's why even though I I feel that is just allin is better on average. But if you think of like investing not just everything based on logic everything just based on quantitative right you just think of it from emotional point of view I I do think that his strategy is superior one. So this one I really need to give uh credit to Mr. Lou. All right

[20:10] I think just as a closing right just want to tell you like okay even though I say that strategy 2 is better we also need to understand why it is better. Okay. So a simple explanation that I can give right is that when you compare strategy one crash buying versus strategy two right I think the most obvious difference is that strategy two right we don't wait one we just deploy okay you just maximize your time in the market and by that right that alone is enough to push out your return rate because market right like S&P 500 right the longer you stay in the market the more return that you can make because all this like the entire market right is made up of all these companies and many of these companies they are very profitable even during market crisis right they you look at their share price right the share price drop but if you look at the business right the fundamentals sometimes they have a bit of dip right but I I can't imagine let's say the entire market right suddenly the earnings every all the dollars all the earnings all gone usually it's not like this one even the earnings dip by 10% 20% right the market already freaked out meaning that earnings right the fundamentals right they are usually quite resilient one yes it could dip 5

[21:11] 10 15% but you don't see the earnings just dip by 50% 80% that that won't happen right that's why if you stay long enough in the market right or what we call the equity risk premium right the longer you stay in the market right the more returns you are going to make and my strategy by construction right I max out the time in the market but for Mr. do crash buying strategy, right? He just, you know, there's a portion where let's say after he deployed, then he just makes up the time in the market. But the period before he bought into market, right? That was the period he stayed with with cash, right? That's the part that drag his return to be lower. So or or so-al cash drag. So that's the terms. So just to as a reminder, right, this is pulling from Jeremy Seager's book stocks for the long run. So you look at in the past 200 years, right? If you invest in stock market, right, stock market is the one that give you very very high returns as compared to cash. If you hold cash after account accounted for inflation, you are losing out. So I think that's the most important thing to remember. But holding to stock although it works over the long run but the short term right whenever there's a bit of like you know market crisis right market

[22:11] just dip by 10 15 20% you see people freaked out right I think that's the part that not many people a able to withstand they they tend to panic and when they panic they sell out and then they will they will result in all this permanent loss right those are the cost that paid by those who just you know not able to hold so I think that's all about my sharing today thanks for watching so I should have put this in my main sharing deck right far more money has been lost by investor preparing for corrections or trying to anticipate corrections that has been lost in the corrections themselves. So I think this is a great quote by Peter Lynch. Basically what he trying to say is that don't time the market just all in just all in is like you you maximize your time in the market and then by that right you will have a better results. Don't think about too much about like timing the market. So I think this is definitely a good quote by Peter Lynch. Happy Chinese New Year. Hope everyone portfolio quite big big. Okay. Thank you so much. See you in the next one.

Fact-checked on Mar 17, 2026