Isn’t it ironic that last corrections look like a lost opportunities but current correction is painful?
I think it is because of expectations. In hindsight it is easy to say that a correction was due whenever these happened but hindsight is not foresight so all corrections are unexpected whenever they start.
I used to feel the pain in the past during a correction but now I adjust my expectations as soon as markets begin to sway from trend value for whatever reasons. So when a correction begins I just take it as business as usual. Unexpected shocks is never a good state of mind to make rational decisions especially contrarian decisions
In normal course of business i monitor my margin of safety regularly and keep my buy and sell lists ready.
When a correction begins the first thing I do is to get rid of positions that turned out to be duds. No matter how carefully I choose my investments I always find some positions are not working out as expected and in most cases chances are that it will definitely not work out after a correction. Instead of going in denial and fighting the market, I take the losses if any and move on.
A correction also gives me an opportunity to buy something that was previously expensive. That’s another reason to dump the duds
One thing I don’t do is to try and time the bottom.
when correction begins I tend to adjust my valuations downwards and that is because I realise that i had raised my fair value calculations upwards during the up move that usually happens before a corrections.
Once i I adjust my valuations I monitor market values more closely as market begins to throw some opportunities .
Another thing I don’t do is buy something just because it has fallen a lot. Usually such stocks look overvalued even after a steep drop. Valuations and margin of safety is always a criteria.
I do keep an eye on stocks that rally during a correction or defy gravity. I sometimes some hidden gems here.