MARKET PHASE · SURGE
Surging market
Moves most when prices rise
A stretch where indexes and stocks keep rising and you hear more and more about people making money
Reaction by phase and the gap
Highest minus lowest of the three phases
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Answer the questions and your reaction in each of the three phases and the gap between them will appear here.
Surging market
-Falling market
-Sideways market
-With 4 questions per phase, the value moves only in steps of 25. Answering one question differently moves that phase’s value by one step.
A high value in this phase means you often rethink decisions made in advance while prices are rising. Which of the three phases was larger is shown in the bars above.
What it means
A rising market looks like the best condition for rethinking. The fact that the price went up already reads like a reason, and a story to back that reason can always be found. Prices often do rise for real reasons, so this reaction cannot be called wrong.
In a rising market, though, almost every decision is right. Any stock you choose is right, and choosing with no standard is right. So performance in this stretch cannot tell you whether your judgment was good, because what would have happened with the same judgment in a different market is missing.
A large reaction in this phase means you reset your standards often, and the direction is usually upward. A price you thought too high last month looks reasonable this month, and a stock you set aside returns to the list. That your standards moved is not a problem in itself, but what moved them is worth recording.
How it shows up
- After a run of good calls, you consider whether it is time to raise your position
- After hearing about others’ returns, you go over your watchlist again
- When a stock you set aside rises, you look at the price again to see whether it is still time to get in
Traps that arise only in this phase
- The higher price itself becomes the reason. The price rises first and the reason is attached later, but it is remembered the other way round.
- A period of being right reads as a record of skill. In a rising market you cannot tell whether a correct call was the market being right or the judgment being right.
- Other people’s returns push up your own baseline. Only the point of comparison has changed, yet the same stock starts to look inadequate.
If your value came out low
If your value in this phase came out low, you rarely change your decisions in a rising market. You may miss rising phases, but you also rarely adjust your standards to a higher price.
The Jupick grade in this phase
Even if a share price doubles, the Jupick grade stays almost the same. For Korean stocks all nine metrics that make up the grade come from financial statements and dividend history and do not use the share price at all, and for overseas stocks only one metric, dividend yield, divides the dividend by the price, and only when a dividend is paid. PER and PBR, on the other hand, rise as much as the price does, and those two are not part of the grade. That is why the grade and the multiples say different things in a rising market.
Worth reading in this phase
What the other two phases look at
This assessment is reference content that describes differences in reaction across market phases. It is not a suggestion to trade any stock or product and not investment advice. Investment decisions and their responsibility rest with you.