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US Recession Wagers - Please Don't Lose Your Shirt

Betting on the US Recession - The Most Painful Trade: 2020-Now

  1. Shorting stocks that does poorly in recessions has been the most painful trade for many investors.

2. But what if the trade eventually pays off, as it did in 2008, given the high interest rates?

3. In 2007, long portfolios of recessionary stocks, particularly in the Staples and Industrials sectors, outperformed.

4. It appears that this is not the case since 2021.

5. Long Late-Stage and long Recession Portfolios have offered way better value-proposition.

6. Financials, Industrials, and Staples Sector portfolios made up of stocks that do well in a recession have under-performed their peers in IT, Consumer Discretionary, and Communication Services.

7. Stocks in Quadrant I and II looks compelling.

Thanks for reading.


For educational purpose only.

Source: Refinitiv and

Important Disclosure This information is current only as of the printing date and provides and views as of the date of writing. We have no obligation to update this information. Actual performance may differ from what is shown here and the views expressed are subject to change without notice. We may have a significant financial interest in the positions and securities discussed.

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