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I Made a Huge Mistake

Posted May 14, 2025

Davis Wilson

By Davis Wilson

I Made a Huge Mistake

Think back over the last few weeks.

Stocks got crushed. Volatility spiked. Bears got loud.

Your portfolio most likely plummeted in value. Mine certainly did.

Then (just like so many times before) stocks ripped higher.

A “V-shaped” recovery, once again.

Now the S&P 500 is officially positive for the year after another sharp rally – this time sparked by easing trade tensions between the U.S. and China.

This isn’t a new pattern.

In fact, it’s one of the most consistent traits of the modern stock market.

Over the last 10 years, we’ve seen at least five major market drawdowns of 10% or more.

Every single one of them has followed the same playbook:

  1. A sharp, scary decline that sends retail investors fleeing for cover

  2. A short-lived bottom

  3. A face-ripping rally that recovers losses faster than anyone expects

Take a look yourself:

Aug 2015 – Feb 2016

Drawdown: -13%
Recovery time: 45 days
Trigger: China slowdown, oil crash

Q4 2018

Drawdown: -19.5%
Recovery time: 75 days
Trigger: Fed tightening + trade war

COVID Crash (2020)

Drawdown: -34%
Recovery time: 97 days
Trigger: Global pandemic

Jan – Oct 2022

Drawdown: -24.5%
Recovery time: 294 days
Trigger: Inflation, Fed hikes

Jul – Aug 2024

Drawdown: -10.5%
Recovery time: ~30 days
Trigger: Yen carry trade unwind, Fed shift

Each time the market panicked… And then each time stocks rebounded sharply.

There are a few structural reasons why V-shaped recoveries have become so common.

Central banks move fast. The Fed and other central banks are now trained to backstop liquidity shocks.

Buy-the-dip is embedded. Investors have been rewarded for 15 years for stepping in on weakness.

Passive flows dominate. With ETFs and indexes steering the ship, indiscriminate selling often turns into indiscriminate buying.

And here’s the kicker: quality stocks get thrown out with the garbage every time.

That’s where the edge is.

If you’ve been following The Million Mission, you know I’ve had a solid track record of calling great setups – especially when fear is in the air.

But I’ll be honest: I didn’t take full advantage of the recent rebound with options.

I was well-positioned with stocks I love, many of which I’ve written about recently.

But when the volatility spiked, I didn’t load up on options like I normally do.

That’s on me. The setup was there. The bounce was predictable. And I didn’t swing the bat.

That said, I hope you took advantage yourself by buying the high-quality stocks I’ve talked about that have been selling at major discounts recently.

If you followed those recommendations, you’re probably smiling today.

The market’s muscle memory is undeniable. It panics fast, and it recovers faster.

That’s not a guarantee (it never is) but it’s been the rhythm of this entire post-2008 cycle.

So the next time the market drops and fear takes over, remember what’s happened time and time again.

I’ll certainly be doing this…

Because if history keeps rhyming, the next “V” will be just around the corner.

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