Key Takeaways
- Counter-cyclical investing buys during recession and sells during late expansion.
- Underwrite recession acquisitions to current conditions, not projected recovery.
- Leverage should be highest in recovery and lowest in recession (for existing holdings).
- Capital reserves should increase as the cycle matures to provide staying power through downturns.
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Test Your Knowledge
1.What is the core principle of counter-cyclical investing?
2.What leverage level is recommended for recession-phase acquisitions?
3.When is optimal for cash-out refinances in a counter-cyclical strategy?