How to Turn a Stock Market CRASH into CASH: Investment Conversations That Will Change Your Life

By Stephen Laube

Two stock market elective courses in two different MBA programs and a Certified Financial Planning program didn't teach the author how to make a dime in the stock market. Over decades of investing, Steve has developed a simple, safe way to make money in the stock market. Steve's method does not use any risky techniques. Stock picking, hot sector/hot country chasing, momentum buying, charting, options, etc. aren't necessary! No need to guess the market top or bottom. Steve teaches how to use the long, detailed history of the "fully diversified" SP500 index to put the odds in your favor by progressively buying low and selling high. Both the buy and the sell are done after the SP500 has moved already, and the buy or sell is based on likely circumstances according to 80 years of SP500 index history. To summarize, Steve's technique shows how to buy the SP500 on sale rather than panic sell, which is what most investors do.
Did you know a bull market has always followed a bear market? Did you know that at the end of a calendar year the SP500 index is at a new record high about 75% of the time? Did you know that the most common return for the SP500 is "over 20% per year" and that happens about 40% of the time? Steve shows you how to use these basic SP500 behaviors to make money. An interesting and foolproof "accelerated dollar cost averaging technique" results in buying low and selling high, and all but eliminates the chance of losing money.
Quit missing opportunities and riding stocks like a roller coaster. Steve shows you how to easily make 200-2000% mastering his simple techniques. The introduction to leveraged SP500 index funds is invaluable, and Steve shows that using leveraged funds can result in making a significant amount of money.

• Language: English
• Publisher: BookBaby
• Release date: Aug 1, 2023
• ISBN: 9798350902501

Stephen Laube

Steve started life as a geeky scientist , earned a BS in chemistry, put his name on three patents, co-authored a chapter in a chemistry book, and then earned his MBA. Just before he retired 20 years ago, he took the CFP program at a local Atlanta college and passed the Certified Financial Planner boards. Despite his formal training, Steve learned next to nothing about how to make money in either stocks or his other love, real estate. Steve developed the simple stock strategy taught in this book on his own and has used it since 1983, enabling him to retire early. Steve's big picture goal is to help eliminate financial illiteracy and this book will help many people learn how to handle the ups and downs of the stock market. Steve lives in Georgia, where he is active in the Georgia Real Estate Investors Association. A highly rated instructor at GaRIEA, he has taught courses on investing in student housing, condos, the stock market, and in mastering passive income.

Book preview

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How to Turn a Stock Market CRASH into CASH

Investment Conversations That Will Change Your Life

Stephen Laube

ISBN (Print Edition): 979-8-35090-249-5

ISBN (eBook Edition): 979-8-35090-250-1

© 2023. All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law.

DISCLAIMER: All investing involves risks, and the reader is advised to use caution and due diligence, before using any of the techniques revealed in this book. This book should be treated as educational material, and specific advice from one’s investment advisor should be obtained before taking any action. Making a profit using any of the methods taught herein is neither guaranteed nor implied. All investing involves risk.

NOTE: I have chosen to write this book in an informal, fun format, using a personalized conversation between me and an investor. This chat format will reinforce what you are learning every step of the way as the investor digests, summarizes, and asks questions. This format will also allow me to anticipate a few of your questions and thus answer them for you. When I tell the investor that he or she has a handout, you will find the material in the appendix of course. When I suggest homework to the investor, you have homework! You should Google the topic and read up on it further. As with anything in life, the more you put into this the more you will get out of it, including potential financial rewards. Sincerely, Steve

Table of Contents

CONVERSATION ONE; INTRODUCTION TO CONCEPTS AND BASICS

HIGH RISK STRATEGIES ARE NOT NECESSARY

SP500 BASICS AND THE SAFEGUARDS BUILT INTO THE TECHNIQUES YOU WILL LEARN

INTRODUCTION TO THE 30/30 STRATEGY

DOLLAR - COST AVERAGING (DCA)

THE MAGIC MATH OF CRASH BUYING / NORMALIZATION

INTRODUCTION TO THE 200-500% RETURN STRATEGY

WHAT IF THE SP500 DOES NOT RECOVER?

THE AMAZING 75% STATISTIC

BAD INVESTOR BEHAVIOR

CORRECT INVESTOR BEHAVIOR

NEAR ZERO CHANCE OF LOSING MONEY REQUIRES JUST A LITTLE PATIENCE

COVID CRASH EXAMPLE

THE 30/30 BASIC TECHNIQUE STEP BY STEP

INTRODUCTION TO LEVERAGED FUNDS AND 2,000 PERCENT RETURN TECHNIQUES

THE 2008/9 AND 2022/23 CRASHES

CONVERSATION TWO; ALL THE NAMED CRASHES, THEIR HISTORICAL BEHAVIOR, AND RECOMMENDED BUY AND SELL STRATEGIES FOR EACH NAMED SP500 DIP/CRASH LEVEL

NAMED DIP / CRASH LEVELS AND THEIR DEFINITIONS AND FREQUENCIES

SUGGESTED BUY AND SELL STRATEGIES FOR EACH NAMED DIP/CRASH

CONVERSATION THREE; SUPERBEARS AND LEVERAGED SP500 FUND VARIATIONS

LEVERAGED FUND BASICS

LEVERAGED SP 500 FUNDS HAVE THE SAME TIME AXISAS THE SP500

LEVERAGED SP FUNDS AND THEIR POTENTIAL RETURNS

SPUU AND SPXL DURING THE COVID CRASH

LEVERAGED SP500 FUNDS IN BULL MARKETS (MONTHLY DATA)

MAJOR RISKS WITH LEVERAGED SP500 FUNDS

BEAR MARKETS AND LEVERAGED SP500 FUNDS (MONTHLY DATA)

SPUU AND SPXL RETURNS SINCE INCEPTION (MONTHLY DATA)

LEVERAGED FUND STRATEGIES, CAUTION

TAKING YOUR PROFITS; NICE PROBLEM TO HAVE

FINAL WORDS; SUMMARY AND RECOMMENDATIONS

APPENDIX

HANDOUT ONE; UNDERSTANDING THE SP500

HANDOUT NUMBER TWO; FEAR AND GREED CONTROL / SAFETY FACTORS IN THE TECHNIQUES TAUGHT IN THIS BOOK

HANDOUT NUMBER THREE: THE MAGIC MATH OF CRASH BUYING / NORMALIZATION

HANDOUT NUMBER FIVE: THE PORTFOLIO VISUALIZER

About the author

CONVERSATION ONE;

INTRODUCTION TO CONCEPTS AND BASICS

Investor: Crash to Cash? What kind of crash?

Steve: A major crash in the stock market like the one we are currently experiencing in 2022/2023, or the COVID crash in 2020, or the financial crisis crash in 2008/9. Lots and lots of less severe crashes/dips too.

Investor: So, you are going to recommend something like investing in the tech wreck?

HIGH RISK STRATEGIES ARE NOT NECESSARY

Steve: No, I don’t recommend investing in individual stocks, sectors, hot countries etc. Way too risky. You don’t have to invest in a particular stock or sector such as technology to make great returns from a crash. The methods we will discuss are MUCH safer.

Investor: So, you have a low-risk way to make a lot of money in the stock market, particularly when it crashes?

Steve: YUP! The method we will discuss has worked every time over the last approximately 80 years (since WW2).

Steve continuing: To decide whether a particular company’s stock will recover from a crash and therefore could be a good investment, you must determine why the company’s stock crashed. Among the dozens of reasons you have to study and evaluate are a change of management, a law suit, product recall, new competition, technical obsolescence, labor, material, or supply chain issues, older inefficient factories/processes resulting in high costs, expiration of an important patent, on and on. Some changes may have a short-term affect and the stock may recover while others could signal that the company is in real trouble and could even go out of business.

Even the TV pros record of predicting the future of a stock are about 50/50; may as well flip a coin. One of the poster children for how hard predicting a particular stock’s future is the case of ENRON. Enron was named America’s most innovative company for 6 consecutive years, had sales of $101 billion in 2000, 20,000 employees, and on October 18, 2001, was given a buy rating by 12 of the 15 analysts whose job was to study and rate it for the public. In fact, the other 3 analysts gave it a strong buy recommendation. Enron filed for bankruptcy two months later in December 2001.

Investor: Yes, that does ring a bell, wow! So, what do I buy on a crash?

SP500 BASICS AND THE SAFEGUARDS BUILT INTO THE TECHNIQUES YOU WILL LEARN

Steve: The answer is very simple and straightforward, and yet I didn’t put this all together until maybe ten years ago, almost 30 years after getting an MBA in finance (1983) and twelve years after passing the CFP (Certified Financial Planner) boards (2001). Have you heard of Warren Buffett?

Investor: Yes, of course.

Steve: 2020 quote from Mr. Buffett: "In my view, for most people, the best thing to do is to own