1. Don’t catch a falling knife.
   • Even if a stock falls below its value because of panic, averaging down while it’s still in a downtrend is risky. Waiting for the clouds to clear and the price to flatten out is a safer strategy than trying to buy at the very bottom. Remember, after big drops, markets can mislead investors with a dead cat bounce.
2. Fear the drop whose cause is unknown, not the one whose cause is known.
   • Drops with a clear cause (April 2025, for example) can be managed. But when giants like Google, Amazon, or ASML get sold off hard despite great earnings, it shows that the market has entered an irrational phase. In these situations, the best move is to raise your cash position a bit, step aside, and watch.
3. During earnings season, if stocks are falling despite good reports, don’t buy; wait.
   • This point is intertwined with the one above. When stocks fall during earnings season despite good reports, it means the market is behaving irrationally. What you should do in this case is wait for the market’s irrationality to pass, and then buy. Markets can stay irrational until you go bankrupt.
4. During earnings season, stay away from buying or selling mid/small-cap and volatile stocks.
   • Once again, I want to give IREN as an example. After it reported earnings, it suffered a drop of more than 25%, then recovered within a day and turned positive.
5. Always hold at least a little cash.
   • No one can know when volatility will come or how severe it will be. Always keeping some cash in the portfolio is not just a safety net; it’s also ammunition for the opportunities that arise once things calm down.

In short, in phases when markets are falling fast, as tempting as it is to average down in the stocks you’re confident about, not rushing is usually more profitable. Waiting gives you either a lower cost basis or a safer entry point.

“The point is not to catch prices at their lowest moment, but to be able to buy or sell at the right time. If I think the market is going to fall and I’ve started selling, every sale I make must be at a lower price than the previous one. If I’m buying, the opposite applies: prices must be rising continuously.”