3 bonnes pratiques à avoir en Bear Market :

Welcome to Investia, this episode from Wednesday, July 10th. I'm a bit fatigued this week, so please excuse any slowness or choppiness; it's 6 PM and my last show before the weekend. Investia focuses on finance, current events, personal development, stories, and science, all combined into a podcast. We appreciate our solid base of listeners, especially during this bear market. I'm organizing a contest for listeners who create an account on OKX using the link in the description. You just need to deposit a minimum of €1 in crypto. OKX is a platform I personally recommend. One random person who creates an account through the podcast will win an iPad. Last week, only about 8 or 9 people created accounts, so your chances of winning are high, around 1 in 6 or 7. It takes about 5 minutes. Let's start with finance: investing when everything is collapsing, the psychology of a bear market. A bear market is defined as markets losing more than 20% from their peak. While common in crypto, this is the standard definition for most stock market investors. The real enemy in a bear market isn't the market itself, but ourselves. Historically, the S&P 500 has experienced 13 bear markets. On average, a bear market lasts 10 to 18 months, with a median loss of 30-32%. Most of the time, markets recover their losses. The Dalbar Study, an American study, measures the performance of individual investors compared to the market. In 2024, the average investor underperformed the S&P 500 by almost 8.5 percentage points. This isn't due to bad stock choices, but bad decisions made at critical moments. Studies show that seeing your portfolio lose value activates the same brain region as physical pain. In a bear market, especially in crypto, this pain is significant. The natural response to pain is flight, so beginners often sell. This is often the worst decision because the best market days almost always occur during the most volatile periods, in a bear market when prices are low. Consider these statistics over 20 years of investment: * Missing the 10 best trading days halves your final return. * Missing the 20 best trading days results in a performance four times lower than if you had remained invested. * From 2003 to 2023, missing the 20 best days meant making 93% instead of 411%. The market doesn't bottom out in the middle of a crisis, but at its end. This is called the "behavior gap"—the difference between market performance and what investors actually do. This gap is largely due to two movements: selling in fear and buying in euphoria. This is the "greater fool theory" applied internally. So, what should you do? 1. **Accept that bear markets are part of the game.** They are regular, occurring every seven years on average. You will experience many in a 30-year investing life. 2. **Build an allocation you can psychologically hold during a storm.** The best strategy is worthless if you can't stick to it when your portfolio is red. Many crypto investors are currently regretting their overly aggressive altcoin allocations, making it impossible to navigate the bear market. Bitcoin-only investors, while still seeing losses, experience a different feeling. 3. **Understand that panic, catastrophic news, and expert predictions of "this time it's different" often mark the best opportunities.** This is because prices reflect maximum fear rather than real fundamentals, creating an asymmetry of opportunities. While past performance is not indicative of future results, history shows that those who stay invested and resist the urge to flee almost always fare better than those who try to outsmart or time the market. This is a crucial time to learn and recall these concepts. Now for current events: the Artemis 2 mission. On July 1st, NASA launched Artemis 2 with four astronauts aboard the Orion capsule: Reid Wiseman (commander), Victor Glover (pilot), Christina Koch, and Jeremy Hansen (mission specialists). On July 6th, they orbited the Moon, a feat not accomplished in 56 years, breaking Apollo 13's distance record by traveling over 406,000 km from Earth. These are the humans furthest from Earth. It's surprising this hasn't been more widely publicized. Christina Koch, 47, an engineer and NASA astronaut since 2013, already holds the record for the longest single spaceflight by a woman (328 days on the ISS). She is now the first woman in history to travel beyond Earth. Previously, 24 men had made the journey to the Moon, but no women. Jeremy Hansen is the first Canadian to travel to the Moon. The mission lasts 10 days, with return to Earth expected soon. Artemis 2 is a validation flight, testing the vessel and systems before the "big leap." A lunar landing is planned for Artemis 4 in 2028. The last human lunar orbit was Apollo 17 in December 1972. It's fascinating that after 55 years, we are returning. Next, a science topic: neuro-singularity. This concept suggests we stop trying to "fix" ourselves and instead learn to live with our innate traits. For example, if you're naturally introverted or have an "hyperactive" brain, instead of feeling guilty or trying to change, create an environment that allows you to thrive with these traits. Examples: * **For disorganization:** Instead of trying to be tidy, place a bag in each room for items you tend to leave lying around. Later, sort the contents of the bags. * **For an "hyperactive" brain:** Create three micro-zones at home with different ambiances. A dedicated work zone (desk, no phone), a creative zone (sofa, soft lighting), and a standing zone for different tasks. Your brain will associate each space with a specific state. * **For constant thoughts:** Note down "brain-pensers" on your phone or in a notebook to clear your mind. * **For phone addiction:** Create negative friction by setting your phone to grayscale. Neuro-singularity is about accepting your "cards" and building an environment where you can flourish as you are, whether "hyperactive," disorganized, or overly organized. Now, a story about Nick Leeson and Barings Bank. Barings Bank, founded in 1762, was one of England's oldest merchant banks, surviving numerous wars and crises for 233 years. In February 1995, it disappeared in a few weeks, all because of one person: Nick Leeson. Leeson, 28, from a modest background, was a brilliant and hardworking trader. In 1992, Barings sent him to Singapore to manage operations on Nikkei futures contracts. His mission was low-risk arbitrage, exploiting small market differences. However, Leeson quickly began taking unauthorized directional positions, betting on market direction. Initially, he generated massive profits, becoming a rising star. His superiors in London were happy and didn't ask many questions. In 1992, a junior trader made a small mistake, a £20,000 loss. Leeson hid this in a secret "88888" account. The losses continued, and instead of reporting them, Leeson hid them in this account. To compensate, he took larger positions, using a "doubling down" or "martingale" strategy: lose €1, bet €2 to recover, then bet more if you lose again. This system can quickly lead to ruin. In January 1995, the Kobe earthquake struck Japan, causing the Nikkei to plummet. Leeson had bet massively on the stability of the Japanese market. Within days, the losses became colossal. On January 23rd, 1995, he fled. He was arrested in Frankfurt and extradited to Singapore, where he was sentenced to 6.5 years in prison. The total losses were not £20,000, but $1.3 billion—double Barings Bank's own capital. Barings went bankrupt and was sold for a symbolic sum. Leeson was not initially a fraudster; he made a small mistake, feared reporting it, and chose to hide it, leading to a disastrous snowball effect. Each subsequent lie was easier, each position harder to reverse. Barings' management either saw nothing or chose to ignore it because Leeson was making so much money. A culture where short-term results overshadowed risk control ultimately brought down the bank. Leeson was released in 1999, survived colon cancer, and now gives conferences on risk management. Finally, a science subject: a potentially living molecule detected on an exoplanet. In April 2015, Cambridge University researchers announced the detection of a molecule in the atmosphere of exoplanet K2-18b that, on Earth, is almost exclusively produced by life: dimethyl sulfide (DMS). K2-18b is 2.5 times the size of Earth, orbiting a red dwarf star at 124 light-years. The James Webb telescope detected the DMS. On Earth, DMS is produced by microorganisms and gives the ocean its particular smell. No known geological process produces it in large quantities without life. The James Webb telescope works by analyzing light from the star as the exoplanet passes in front of it. Each molecule in the atmosphere absorbs light at specific wavelengths, creating a unique "fingerprint." James Webb reads these fingerprints, and among them, it read DMS. However, in July 2025 (note: transcript says 2025, but the context suggests past or present), a counter-study in *Astronomy and Astrophysics* questioned this, stating the signal was too weak to be statistically significant. The debate is ongoing. This illustrates how science works: one team makes a discovery, others verify or contest it, eventually leading to a consensus. We haven't found extraterrestrial life, but we may have the tools to detect it, and DMS on K2-18b is a serious candidate. Let's return to investment with some "shocking" notions. 1. **The power of time in investing:** Compare two investors. Antoine invests €300/month from age 20 to 30 (€36,000 total) and then stops. Beatrice waits until age 30 to invest €300/month but continues until age 65 (€126,000 total). At 65, Beatrice has around €680,000, while Antoine, who invested four times less and stopped at 30, has €840,000. This highlights that time is more important than capital; it's about investing what you can for a very long time. Every year you delay investing is a loss to your final capital. 2. **The impact of fees:** Two investors start with €100,000, invested at 7% per year for 30 years. Investor A invests in ETFs with 0.2% fees, ending with €720,000. Investor B invests through a classic bank with 2% fees (entry, management, arbitration), ending with €430,000. A difference of just 1.8 percentage points in annual fees results in Investor B losing 40% of their final fortune. Be very careful with fees. 3. **The cost of market timing and panic:** Many investors try to time the market, selling when it drops and buying when it rises. This is the best way to ruin your investments. If you invested €10,000 in the S&P for the last 20 years and always stayed invested (buy and hold), your final capital would be €64,000. Missing the 10 best trading days reduces it to €29,000. Missing the 30 best days reduces it to €11,000. 4. **Bessembinder's Law (the illusion of choice):** Most people believe the stock market grows because companies generally progress. Professor Hendrik Bessembinder's study of over 90% of global stock markets revealed that 96% of stocks collectively did not outperform treasury bonds (considered the safest and most profitable). All net wealth creation in the stock market was generated by just 4% of companies. Removing these few high-performing companies makes the market's overall performance zero. This means stock picking is a lottery with a 96% chance of choosing a mediocre stock. This also applies to crypto. It's the ultimate argument for ETFs, which aim to capture these few high-performing companies. 5. **Financial gravitation:** We tend to think that if we lose 50%, we just need to gain 50% to get back to even. This is a severe mental error. If you lose 50% on €100, you have €50. To return to €100, you need to gain 100% on your €50. If you lose 90%, you need to gain 900% (x10) to return to zero. This shows why losses can quickly become almost insurmountable. In conclusion: be careful with your losses, avoid stock picking, resist timing the market, and understand that time is your best ally. I hope you enjoyed this podcast. Don't forget to subscribe. Take care, and see you next week.