{"id":8011,"date":"2022-05-25T23:56:00","date_gmt":"2022-05-25T15:56:00","guid":{"rendered":"https:\/\/www.granitefirm.com\/blog\/us\/?p=8011"},"modified":"2025-07-21T09:01:30","modified_gmt":"2025-07-21T01:01:30","slug":"is-market-fall-enough","status":"publish","type":"post","link":"https:\/\/www.granitefirm.com\/blog\/us\/2022\/05\/25\/is-market-fall-enough\/","title":{"rendered":"Three signals to decide if stock market fall deep enough"},"content":{"rendered":"\n<p>Recently, a few friends have been asking me if the stock market has fallen enough. I later wrote this article &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/06\/25\/market-crash-pullback\/\" data-type=\"URL\" data-id=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/06\/25\/market-crash-pullback\/\" target=\"_blank\" rel=\"noreferrer noopener\">How to deal with market crash or sharp pullback?<\/a>&#8220;, you can refer to it if you are interested in this topic.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/05\/25\/is-market-fall-enough\/#Current_market_conditions\" >Current market conditions<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/05\/25\/is-market-fall-enough\/#Bull_market_ends\" >Bull market ends<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/05\/25\/is-market-fall-enough\/#Is_it_safe_now\" >Is it safe now?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/05\/25\/is-market-fall-enough\/#When_does_the_stock_market_fall_deep_enough\" >When does the stock market fall deep enough?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/05\/25\/is-market-fall-enough\/#Situation_in_US\" >Situation in US<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/05\/25\/is-market-fall-enough\/#Situation_in_Taiwan\" >Situation in Taiwan<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/05\/25\/is-market-fall-enough\/#Buffett_hits_every_time\" >Buffett hits every time<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/05\/25\/is-market-fall-enough\/#Related_articles\" >Related articles<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Current_market_conditions\"><\/span>Current market conditions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Stock market fall staring last September, and it looks like will continue.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Bull_market_ends\"><\/span>Bull market ends<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>One thing seems certain, all stock valuations have gone through the bull run of the past 13 years, and since the beginning of the third quarter of last year, starting with the growth stocks sector, they have all started to decline from their all-time highs. <\/p>\n\n\n\n<p>As of today, the Nasdaq has fallen by about 30% from its high point, and it has been in a bear market for a long time. The more representative S&amp;P 500, which has fallen 19% from its peak, is already on the doorstep of a bear market, and it is very close to the bear market standard of a 20% decline. The Dow Jones Industrial Average, which represents large industrial and traditional companies, was down 15% at its peak.<\/p>\n\n\n\n<p><a href=\"https:\/\/coinyuppie.com\/2022-buffett-shareholders-meeting-highlights-500-words-condensed-into-five-and-a-half-hours-of-qa-points\/\" target=\"_blank\" rel=\"noreferrer noopener\">At this year&#8217;s Berkshire shareholders meeting, Buffett and Munger were again harshly critical of the market frenzy<\/a>. In fact, the Buffett Index, proposed by Buffett himself, has exceeded 200%, which represents the overheating of the stock market, for many years.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_it_safe_now\"><\/span>Is it safe now?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>If you ask me, is it safe to enter market now? Or when will stock market fall end? For questions like this, my answer is &#8220;I don&#8217;t know&#8221;.<\/p>\n\n\n\n<p>Bernard. Baruch said, &#8220;Don&#8217;t try to buy the bottom and sell the top. No one has a way to do that, except a liar.&#8221; No one can predict the highs and lows of the stock market, but at least all stocks fall a lot, the margin of safety has been raised. This should not be a bad thing for long-term investors. This is what Warren Buffett said, &#8220;When stocks go down, investors should be happy; unless you&#8217;re going to sell stocks tomorrow.&#8221;<\/p>\n\n\n\n<p>Keep in your mind &#8212; stock market fall is part of stock investment. In the stock market, nothing is 100% certain to happen. I suggest you refer to my other blog post &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/02\/the-uncertainty-in-investment\/\" target=\"_blank\" rel=\"noreferrer noopener\">The uncertainty in Investing<\/a>&#8221; for instructions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_does_the_stock_market_fall_deep_enough\"><\/span><strong>When does the stock market fall deep enough?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>I&#8217;ve been thinking about this. Few people have the free time to keep an eye on the market; unless it&#8217;s your job. So are there any indicators or signs that can be used to judge &#8220;when does the stock market fall deep enough?&#8221; Want to have &#8220;accurate&#8221; indicators, no, unless you are God. But there are still a few signs that can be provided for your &#8220;reference&#8221;.<\/p>\n\n\n\n<p>When friends around you, especially those who used to talk about stocks much, no longer talk about stocks and dare not mention how much money he lost in the stock market last year. Everyone scorns or ridicules the recent times when buying stocks is a fool, especially when the media is full of bad financial news, notable business failures, bankruptcies, massive layoffs, and soaring unemployment. Well, at this time, it is almost there.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Situation_in_US\"><\/span>Situation in US<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The U.S. market can see whether Buffett has made a big move and is busy buying critical companies around, or whether the media reports that this old grandfather spends money and makes big purchases in the stock market (please pay attention to my wording, &#8220;big purchases&#8221;). Almost all the cash accumulated in the bull market of the past decade is almost exhausted.<\/p>\n\n\n\n<p>If the Fed will change its monetary policy and propose a rescue strategy, it must be that the market situation is very urgent and the Fed needs to adjust its policy to rescue the market.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Situation_in_Taiwan\"><\/span>Situation in Taiwan<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Whether Taiwan stocks have fallen enough? there are some signs. Taiwan is a democratic society, and votors are very important. First of all, it depends on whether the government authorities have come forward to appease investors. Of course, the higher the level of authorities, the different meanings of sign and representation. Then the so-called eight major state-owned-enterprise banks, the buying of financial institutions of these official stocks are another bellwether that investors can immediately observe.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"224\" height=\"150\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2022\/09\/Bodsa.jpg\" alt=\"market fall\" class=\"wp-image-13474\"\/><figcaption class=\"wp-element-caption\">Credit: Bodsa<\/figcaption><\/figure>\n\n\n\n<p>The clearer signal is whether the National Stabilization Fund has entered the market. Considering the history of Taiwan stocks in the past 40 years, the National Stabilization Fund has entered the market and purchased aggressively. It does have a boosting effect on investor confidence and can also play a role in supporting the market. The market value of the Taiwan stock market has grown a lot, coupled with the effect of the increase in the proportion of foreign investors. Even if it cannot be repeated 30-40 years ago, the National Stabilization Fund still has a powerful role to support market and enhance investors&#8217; confidence.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Buffett_hits_every_time\"><\/span>Buffett hits every time<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Buffett has sold off U.S. stocks on a large scale five times in history, and as of early March 2025, the U.S. stock market crashed in the first four times:<\/p>\n\n\n\n<p>\u5df4\u83f2\u7279\u6b77\u53f2\u4e0a\u4e00\u51715\u6b21\u5927\u898f\u6a21\u6e1b\u6301\u7f8e\u80a1\uff0c\u81f32025\u5e743 \u6708\u4e0a\u65ec\u70ba\u6b62\uff0c\u524d\u97624\u6b21\u7f8e\u80a1\u96a8\u5f8c\u90fd\u51fa\u73fe\u5d29\u76e4\uff1a<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Year<\/td><td>Buffett&#8217;s move<\/td><td>The consequence<\/td><\/tr><tr><td>2025<\/td><td>Buffett big reduce his position on Apple and Bank of America<\/td><td>Let&#8217;s wait and see<\/td><\/tr><tr><td>2007<\/td><td>Buffett significantly reduced his holdings in U.S. stocks<\/td><td>S&amp;P 500 and Nasdaq index lost 55%<\/td><\/tr><tr><td>1999<\/td><td>Buffett publicly bearish on US technology and Internet stocks<\/td><td>Nasdaq index lost 78%<\/td><\/tr><tr><td>1987<\/td><td>Buffett almost dump all his stock position<\/td><td>S&amp;P 500 index lost 33%, Dow Jones lost 36%<\/td><\/tr><tr><td>1969<\/td><td>Buffett closed his partnership company that lasted 13 years<\/td><td>Dow Jones and S&amp;P 500 index lost 35%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Related_articles\"><\/span>Related articles<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/07\/20\/fedex-economic-prosperity\/\">Fedex directly linked to economic prosperity, how does Fedex make money? why it&#8217;s downward? <\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/06\/25\/market-crash-pullback\/\">How to deal with market crash or sharp pullback?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/05\/25\/is-market-fall-enough\/\">Three signals to decide if stock market fall deep enough<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/08\/05\/market-crashes-todolist\/\" target=\"_blank\" rel=\"noreferrer noopener\">Todolist when the stock market crashes<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/10\/12\/happy-market-crash\/\" target=\"_blank\" rel=\"noreferrer noopener\">Investors should be happy when market crash<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/05\/25\/is-market-fall-enough\/\" target=\"_blank\" rel=\"noreferrer noopener\">Does the stock market fall deep enough?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/01\/10\/volatility-is-friend\/\">Market volatility is investors&#8217; friend<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/06\/20\/2020-market-crash\/\" target=\"_blank\" rel=\"noreferrer noopener\">2020 market crash, why more retail investors than Wall Street made money?<\/a>&#8220;<\/li>\n<\/ul>\n\n\n\n<p><em><strong>Disclaimer<\/strong><\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The content of this site is the author\u2019s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.<\/em><\/li>\n\n\n\n<li><em>I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers&#8217; direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>When does the stock market fall enough? Buffett has made a big move and is busy buying critical companies around. If the Fed will change its monetary policy and propose a rescue strategy.<\/p>\n","protected":false},"author":1,"featured_media":13474,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[830,403,15,397,46,23,28,11],"tags":[2,47,48,49],"class_list":["post-8011","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-crash","category-bernard-baruch","category-charlie-munger","category-margin-of-safety","category-market-index","category-taiwan-stock-market","category-us-stock-market","category-buffett","tag-aapl","tag-bac","tag-brk-a","tag-brk-b"],"_links":{"self":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/8011","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/comments?post=8011"}],"version-history":[{"count":37,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/8011\/revisions"}],"predecessor-version":[{"id":37409,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/8011\/revisions\/37409"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media\/13474"}],"wp:attachment":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media?parent=8011"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/categories?post=8011"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/tags?post=8011"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}