The Day I Sold Everything

In the first week of September, I did something most investors would never think of —

I liquidated my entire equity portfolio.

Not a partial trim. Not a rebalance.

I sold everything.

Stocks were on fire.

Sentiment was overflowing, and every conversation sounded like 2021 all over again.

It wasn’t fear that drove me — it was pattern recognition.

Every cycle, I’ve learned, ends the same way: optimism first, euphoria next, and regret soon after.

So I exited. Completely.

Ten days later, I moved every dollar into Gold and Silver ETFs.

And what followed over the next 35 days surprised even me.

Before I go further, some readers might remember the pieces that set this story in motion:

“The Crash I See Coming” — where I first explained why I believed a correction was inevitable,

and “Why I Moved into Gold and Silver ETFs After Liquidating My Portfolio” — where I detailed the rotation into precious metals.

This article picks up where those two left off.

But it’s not just an update — it’s a framework.

A look at why timing the market isn’t luck, why cycles repeat, and how the data beneath sentiment tells us exactly where we are.

When I sold, valuations were stretched, retail participation was at record highs,

and the popular narrative was that “this time is different.”

It never is.

The result? In just 35 days, my portfolio delivered a +421 % IRR,

while the NASDAQ Composite Index rose only +9.7 % (IRR) in the same period.

That wasn’t coincidence — it was cycle recognition.

Understanding when optimism disconnects from fundamentals.

Seeing the same signals that have repeated across every boom and bust for the past century.

This piece unpacks that logic —

why market timing can be as scientific as stock picking,

how sentiment cycles shape returns,

and what indicators — from Sahm’s Rule to the Buffett Ratio — reveal about where we stand today.

This isn’t a victory lap. It’s a blueprint — for anyone willing to question the myth that market timing is guesswork, and to see it instead as a discipline as analytical and scientific as stock picking itself.

The Proof: The Results Up Front

When I moved everything into Gold and Silver ETFs on the 2nd week of September, it wasn’t an impulsive bet.

It was a conviction move — away from what felt crowded, toward what still had room to breathe.

Thirty-five days later, the numbers told their own story.

The portfolio delivered an annualized return (XIRR) of +421 %,

while the NASDAQ Composite Index — the global barometer of risk appetite — delivered an XIRR of +9.7 % over the same period.

Those are raw facts, not projections or back-tests.

And they reinforce a truth that markets have always rewarded: fortune favors the brave — especially those who read market cycles and act before the data becomes consensus.

Understanding the Math

XIRR simply annualizes a short-term gain to express its velocity.

It doesn’t mean the portfolio quadrupled in a month; it means the pace of compounding, if sustained, would equate to 421 % a year.

Even in terms of absolute returns, my portfolio’s growth was more than three times that of the NASDAQ Composite Index during the same period.

It confirmed that capital rotation, when timed with clarity, still works in modern markets.

The New Psychology of Safety

The more interesting story, though, lies in the behavior that powered those returns.

In previous cycles, gold was purely defensive — a shock absorber to prevent portfolio collapse.

But a small, increasingly influential set of investors today are far more macro-literate.

They track liquidity, policy, inflation and other macro indicators in real time.

They understand that when risk assets stretch beyond fundamentals, precious metals don’t just protect — they perform.

This collective shift — even if driven by a minority — has started to influence market behavior at scale.

It’s no longer just fear that moves gold & silver; it’s anticipation.

And that subtle behavioral evolution has transformed gold and silver from passive hedges into active beneficiaries of tightening liquidity and rising caution.

That’s why the move worked beyond what I even imagined.

Not because of timing alone, but because of understanding how sentiment, liquidity, and awareness converge to create short-term asymmetry.

So while the headline number may sound dramatic, the real insight lies deeper.

It’s evidence that markets still move in cycles — psychological as much as financial —

and that those cycles reward decisiveness, not denial.

In the next section, I’ll unpack the emotional architecture behind these cycles — the four sentiments that repeat through every boom and bust, and the variables that make them measurable.

The Science of Timing: The Four Sentiments That Drive Every Market Cycle

If there’s one truth markets have taught me over the years, it’s this:

prices don’t move because of numbers — they move because of emotions.

Behind every chart and every crash lies a rhythm of sentiment that repeats with astonishing regularity.

Across decades and asset classes, the market dances through four emotional stages — each with its own fundamentals, liquidity behavior, and valuation signature.

Understanding these four sentiments — Growth, Irrational Exuberance, Crash, and Wait & Watch — is what turns market timing from guesswork into science.

Before We Begin: The Five Key Indicators

To decode these sentiments, it helps to understand the five variables that mirror them:

• Buffett Indicator (Market Cap-to-GDP Ratio): Measures total stock market value relative to GDP. A ratio above 150% suggests overvaluation; below 80% often signals opportunity.

• Price-to-Earnings (P/E) Ratio: Compares stock prices to company earnings. Rising P/Es indicate optimism; falling P/Es reflect fear or undervaluation.

• Yield Curve (Short-term vs. Long-term Interest Rates): A flattening or inverted curve (short-term rates higher than long-term) often precedes recessions. A steep curve indicates renewed growth.

• Sahm’s Rule: Triggers when the three-month moving average of unemployment rises by 0.5 % or more above its 12-month low — a reliable sign that a recession has begun.

• Mean Reversion: The natural tendency of valuations and returns to revert to their long-term averages after periods of excess or pessimism.

These five metrics, taken together, form the quantitative backbone of every emotional cycle.

🟢 1. Growth — Rational Optimism

This is when fundamentals truly lead the story.

Earnings rise, productivity improves, and investor confidence feels justified.

The economy expands naturally — not through leverage or hype.

• Buffett Indicator: Healthy, between 90–120 %, signaling fair valuations.

• P/E Ratios: Rising modestly in step with earnings.

• Yield Curve: Positive and upward-sloping — long-term confidence intact.

• Sahm’s Rule: Stable; unemployment at cyclical lows.

• Mean Reversion: Functions smoothly — overvalued sectors cool off, undervalued ones rebound.

This is the quiet phase of real wealth creation — when conviction, not excitement, drives returns.

But success attracts capital, and capital attracts speculation.

As liquidity deepens and returns look effortless, investors start believing that risk has disappeared.

The same confidence that powered growth begins to inflate valuations — and the line between rational optimism and irrational exuberance blurs.

🟠 2. Irrational Exuberance — The Bubble Phase

This is when markets lose their grounding.

Valuations expand not because of earnings, but because of emotion.

Capital floods in. Caution vanishes.

The fundamentals try to catch up with fantasy, and for a while, they seem to succeed — until they can’t.

• Buffett Indicator: Surges well past 150 %, showing the market’s worth exceeds the real economy.

• P/E Ratios: Detached completely from corporate performance.

• Yield Curve: Flattens or inverts as short-term rates rise faster than long-term expectations.

• Sahm’s Rule: Remains dormant through most of this phase but flashes toward the end — a warning that the labor market is beginning to weaken.

• Mean Reversion: Breaks down entirely; prices stop correcting, bubbles start compounding.

We’ve seen this movie before:

• 2000 (Dot-Com Mania): Companies with no profits — sometimes no revenue — traded at billion-dollar valuations simply because they were “internet stocks.”

• 2008 (Housing Bubble): Homes were bought and sold multiple times before anyone lived in them — yet prices kept climbing.

When greed overtakes reason, even bad data feels like validation.

And when enough people ignore the signals, the cycle completes itself. The air thins — and the fall begins.

🔴 3. Crash — Rationalization Returns

Every bubble eventually meets its reckoning.

A black swan event, a policy misstep, a credit event, or just collective exhaustion tips the scale.

Fear replaces greed. Liquidity vanishes. And the market crashes.

Now the pendulum swings back — fast and brutal.

• Buffett Indicator: Collapses toward its long-term mean near 100 %.

• P/E Ratios: Compress violently as prices fall faster than earnings.

• Yield Curve: Steepens sharply as short-term rates plunge.

• Sahm’s Rule: Fully triggered — unemployment rises, confirming what prices already signaled.

• Mean Reversion: Snaps back with force, erasing speculative excess.

This is when fundamentals finally catch up with reality — not fantasy.

The market cleanses itself. Over-leveraged players exit.

It’s painful, but necessary. The noise fades. Rationality returns.

⚪ 4. Wait & Watch — The Quiet Rebuild

After the chaos, silence.

Liquidity returns slowly, but trust takes time.

Investors are cautious — they want proof before conviction.

• Buffett Indicator: Stabilizes near fair value.

• P/E Ratios: Bottom out, offering genuine bargains.

• Yield Curve: Gradually steepens as confidence rebuilds.

• Sahm’s Rule: Peaks, then begins to recede as employment stabilizes.

• Mean Reversion: Completes; the system resets to sustainable levels.

Economic data still looks dull — but sentiment starts to thaw.

Innovation quietly restarts beneath the surface.

And those who observe patiently, rather than react emotionally, begin positioning for the next cycle.

It’s the most underrated phase — when fear fades, optimism hesitates, and opportunity hides in plain sight.

Why This Matters

Each of these sentiments carries both a psychological fingerprint and a quantitative signature.

Together, they make market timing observable — not mystical.

When liquidity, valuations, credit spreads, employment, and reversion all begin to rhyme, the message is unmistakable:

markets are never random, only cyclical.

That’s the true science of timing — recognizing emotion through data, and data through emotion.

The Science of Timing the Market (A Misunderstood Discipline)

For decades, investors have been told one universal truth:

“You can’t time the market.”

It’s repeated like scripture in every finance book, investing podcast, and mutual-fund brochure.

And for most people, that advice works — it protects them from impulsive trades, emotional panic, and short-term noise.

But somewhere along the way, this sensible caution turned into blind obedience.

The idea that no one can time the market became an excuse to never even try to understand the cycles that shape it.

The Problem with Conventional Wisdom

The “don’t time the market” philosophy was built for a world that no longer exists —

a world where information moved slowly, liquidity data was hidden, and access to indicators was limited to institutions.

Today, data is democratized.

Anyone can track the Buffett Indicator, P/E ratios, yield curves, credit spreads, or Sahm’s Rule from their phone.

Yet most investors still act as if markets are random.

Here’s the truth: markets are complex, but not chaotic.

They are systems of behavior — shaped by liquidity, psychology, and time.

And systems can be studied.

So the question isn’t “Can you time the market?”

The real question is “Can you recognize when the odds are no longer in your favor — and act before consensus catches up?”

Timing vs. Trading

Market timing has long been confused with day trading —

the frantic jumping in and out of positions to chase every tick.

But timing is not trading.

Trading reacts to price.

Timing responds to pattern.

A trader watches candles; a timer watches cycles.

One bets on movement, the other anticipates transition.

It’s not about catching tops or bottoms — it’s about avoiding extremes.

The best timers don’t predict; they read the temperature of the market —

liquidity, leverage, sentiment, and participation — and act when those variables heat up beyond reason.

Timing Is Not Luck — It’s Awareness

When I exited equities and rotated into Gold and Silver ETFs, it wasn’t a hunch.

It was the convergence of sentiment data, liquidity signals, and pattern recognition.

Every major downturn — from 2000 to 2008 to 2022 — flashed warnings long before prices broke.

Valuations stretched. Yield curves inverted. Credit spreads tightened. Retail inflows spiked.

The evidence was visible — just not widely acknowledged.

Timing the market isn’t about guessing the future.

It’s about recognizing when the present has already changed.

If you can measure sentiment, liquidity, and valuation together, you’re not predicting — you’re observing.

Most investors think of timing as a gamble.

I see it as a discipline — the ability to see patterns others ignore and act before comfort returns.

Because cycles don’t punish those who act; they punish those who hesitate.

And history rewards those who understand that timing isn’t luck — it’s logic in motion.

Let’s look at a few real-world examples that prove exactly that.

Timing in Action: Three Stories, One Pattern

Markets often reward those who move at the right time —

even when they don’t realize how perfect their timing really was.

The difference between luck and logic, however, lies in awareness.

Some decisions are made with a clear understanding of cycles; others just happen to land on the right side of them.

But what if more founders and investors actually understood the rhythm beneath their outcomes?

Let’s look at three stories — one driven by deep cycle awareness, and two by instinct that coincidentally aligned with market timing.

🏙️ 1. Encore Enterprises (2008): The Conscious Exit

In the mid-2000s, U.S. real estate was euphoric.

Credit was easy, prices were surging, and properties changed hands as if appreciation were guaranteed.

But Dr. Bharat Sanghani, founder of Encore Enterprises, saw the imbalance forming beneath the optimism.

He recognized that he was getting outsized returns for Encore's portfolio.

And in a move that would later prove prescient, Encore sold a portfolio of properties across the southeastern U.S. for nearly $400 million just before the 2008 crash.

That single decision yielded an IRR of 55 %, while institutional peers like Colony Realty Capital, which chose to “invest through cycles,” barely achieved low double-digit returns.

This was timing done consciously — reading sentiment, liquidity, and valuation, not reacting to them.

Dr. Sanghani understood the cycle — and acted with discipline.

That awareness turned prudence into performance.

📈 2. Vajro (2020–21): The Unintentional Peak

Fast-forward to 2020.

The pandemic had accelerated digital adoption at unprecedented speed.

E-commerce SaaS was booming, venture capital was abundant, and every investor was chasing the next Shopify ecosystem play.

At Vajro, we raised our Series A at 10× annual revenue, a number that — at the time — felt completely reasonable.

Only in hindsight did I realize that we had raised capital at the very top of the cycle.

The chart below, from SaaS Capital, tells the story better than words ever could:

Source: SaaS Capital Index (SCI), 2025.

In June 2021, the SaaS Capital Index peaked at nearly 17× ARR, a record multiple across the sector.

By mid-2025, that multiple had normalized to around 6.7× — less than half.

Our raise happened right at that 17× peak.

We weren’t trying to time the market — we simply believed our valuation was justified by momentum.

But the data now shows how perfect the timing was, even if we didn’t recognize it then.

Sometimes you benefit from timing without ever realizing you did.

💼 3. Ally.io (2021): The Ultimate Multiple

Around the same time, another SaaS story was playing out on a far bigger stage.

In October 2021, Microsoft acquired Ally.io — an OKR (Objectives and Key Results) platform — for nearly 100× its annual revenue.

It was one of the richest exits in SaaS history.

And yet, like many founders at the time, Ally’s leadership wasn’t consciously “timing” the market.

They were simply executing, unaware that the broader SaaS multiples were peaking.

Within months, public comps for similar businesses had fallen 70–80 %.

In hindsight, it was a masterclass in perfect — if accidental — timing.

The irony is that cycles reward you whether you understand them or not — but only awareness lets you repeat it.

Luck, Logic, and the Power of Awareness

All three stories had one thing in common: they happened at the edge of a cycle.

But only one — Dr. Bharat Sanghani’s — was driven by clear, conscious awareness of where the market truly stood.

Vajro and Ally.io benefited from the same dynamics — liquidity peaks, valuation inflation, and exuberant sentiment — but almost by accident.

The outcomes were successful, yet unrepeatable.

Because without understanding why timing worked, you can’t make it work again.

Imagine what would happen if more founders and investors treated cycle literacy the same way they treat financial literacy —

not as theory, but as an edge.

Awareness turns luck into strategy.

And that’s what separates those who occasionally get timing right from those who get it right by design.

The Cycle We’re In (and Why Metals Still Have Steam)

Every market cycle has a tipping point — the moment when sentiment quietly flips from confidence to caution, and the data starts to tell a different story than the headlines.

We’re not there yet.

That’s precisely why so many people are still in denial.

When I wrote “The Crash I See Coming”, I argued that the early signs of a slowdown were already visible — from tightening liquidity to valuations that defied fundamentals.

Two months later, those signals have only strengthened.

But because the pain hasn’t yet appeared on balance sheets, most investors are still playing along as if the music hasn’t stopped.

The Macro Undercurrents

We’re still living through the aftershocks of the easiest-money era in history.

Central banks have withdrawn liquidity, global debt has soared, and corporate borrowing costs are rising again.

Yet equity markets continue to behave as though this expansion is infinite — a familiar late-cycle illusion.

In past cycles, this is the calm before the inversion flips to reality — when liquidity dries up faster than confidence, and capital begins to rotate from risk to resilience.

That rotation always seeks an anchor — an asset class that preserves value when both growth and liquidity are under pressure.

And historically, that anchor has been precious metals.

Gold and silver rise not because investors suddenly become fearful, but because institutional capital quietly starts prioritizing preservation over performance.

You can see this shift most clearly in what the biggest players in the world — central banks — are doing.

1. Central Banks Keep Buying Gold

2023 and 2024 marked the highest level of central-bank gold buying in over half a century, according to the World Gold Council.

China, India, Turkey, and Poland were among the biggest accumulators.

They’re not chasing returns. They’re hedging trust.

This silent accumulation signals something deeper — that nation-states themselves no longer fully trust the financial plumbing that underpins their reserves.

When governments start diversifying away from paper assets, it isn’t a trend; it’s a tell.

Gold is no longer a hedge against fear — it’s a hedge against fragility.

2. The Labor Market Is Flashing Early Warnings

For months, unemployment data looked resilient. But cracks are now showing.

The four-week average of U.S. jobless claims recently climbed above 235,000, its highest since 2021, per U.S. Department of Labor data (October 2025).

Unemployment is edging up from its trough — not enough to trigger alarm, but enough to whisper that the slowdown is already in motion.

That’s where Sahm’s Rule comes in: it’s triggered when the three-month average unemployment rate rises by 0.5 percentage points above its 12-month low.

If the current trend continues, that line could be crossed within a quarter.

Once it does, it won’t be a surprise to those watching closely.

It’ll just confirm what the data has been saying for months — that the cycle is finally turning.

Markets don’t wait for official declarations of recession. They move when the signs stop being deniable.

Why the Cycle Still Favors Metals

The setup today mirrors every late-cycle transition that came before it:

• Liquidity is tightening.

• Debt is rising.

• Confidence remains high — for now.

That combination has always marked the window where gold and silver quietly front-run the crowd.

Central banks continue to buy. Retail participation remains low.

And sentiment toward metals is still underweighted — a perfect setup for the next leg higher.

This isn’t a short-term rally; it’s the slow awakening of capital realizing where safety and opportunity overlap.

Gold protects; silver multiplies. Together, they compound awareness.

We haven’t reached the tipping point yet — which means the opportunity remains open.

Most are still holding on to denial; a few are quietly preparing for transition.

Cycles reward awareness. There’s still plenty of steam left in metals — and there’s still time to act.

Conclusion: The Case for Studying Market Cycles

Investing has always been taught as the art of picking — the right stock, the right entry, the right multiple.

But very few talk about the rhythm that moves them all: the cycle itself.

We analyze companies in infinite detail — their margins, moats, and management — yet most investors never pause to ask the one question that trumps them all:

Where are we in the cycle?

Because the truth is, a great company in the wrong part of the cycle still underperforms.

And an average asset in the right part of the cycle can deliver extraordinary returns.

That’s not theory — it’s history.

The Blind Spot in Modern Investing

Over the last decade, financial education has become company-centric.

We’ve trained millions of investors to study businesses, but not behaviors — the patterns that define liquidity, sentiment, and confidence.

This is why even the smartest investors often get blindsided:

they can read a balance sheet, but not a cycle chart;

they understand profit margins, but not yield curves.

And that’s what I’ve tried to challenge through this series of essays —

to show that market timing isn’t reckless gambling; it’s pattern recognition in slow motion.

Studying cycles is not the opposite of studying stocks — it’s the layer above it.

The Courage to See Beyond Fundamentals

Most people don’t study cycles because they’re uncomfortable.

Cycles expose denial. They make you question conviction. They force you to see that markets don’t rise and fall because of earnings, but because of emotion disguised as logic.

Yet awareness isn’t about predicting crashes or calling tops.

It’s about reading the room — seeing when fundamentals stop explaining price, and acting with the humility that every phase eventually ends.

You don’t need to outsmart the market — you just need to stop pretending it’s random.

A Final Reflection

I don’t know exactly when the tipping point will come.

But I do know this: every indicator — from central-bank gold buying to rising jobless claims — suggests that the next phase of this cycle is already forming beneath our feet.

Most will see it only in hindsight.

A few will act while it’s still uncomfortable.

In the end, cycles reward those who stay aware — and humble enough to listen.

This isn’t about outsmarting the market.

It’s about listening to it — and having the courage to act when it whispers what everyone else will soon shout.

If this perspective made you see the markets differently, share it —

because the more people who study cycles, the fewer who get crushed by them.

Disclaimer

This article reflects my personal views and interpretations of market data.

It is intended for educational and informational purposes only, and should not be construed as financial or investment advice.

Markets are inherently uncertain, and past performance — including my own — is no guarantee of future results.

Please do your own research or consult a qualified advisor before making any investment decisions.

I take no responsibility for any actions taken based on the contents of this article.