Every newsletter shows you the trades that worked. Here’s the other thing. We walked through every major market scare of the Risk Reducer’s lifetime — from the 2008 crash to the 2025 tariff shock — and asked one question of each, with no spin: did it actually help?
For every event you get two numbers: what buy-and-hold lost at the worst point, and what you’d have lost with the signal stepping you aside on a prior-day warning. Sometimes it got you out clean. Sometimes it only softened the blow. And at least once it “caught” a panic only because it was still hiding from the previous storm — luck wearing skill’s jacket, and we label it as such (see SVB). A signal that shows you a flat line through all of them is named Madoff. That’s the one to run from.
The market is the line. Each crisis is marked by hand with two numbers: what buy & hold gave back at the worst, and what it cost with the Reducer. green = got us out · amber = cushioned · red = missed it.
Same numbers as the walk below — just marked up the way you’d do it on a printout. Hypothetical / backtested, prior-day signal, no lookahead. Educational, not advice.
The spring tariff air-pocket. The warning fired as the market fell, and the signal cut −19% down to −3%.
August 5, 2024: an abrupt unwind of the yen ‘carry trade’ cracked global markets — Japan’s Nikkei had its worst day since 1987 and the VIX spiked. It was over in days, so the signal only partly caught it — trimming a −8% to −6%.
The autumn yield-spike selloff. The market weakened, the signal eased off, and it cut a −10% to −3%.
A bank failed over a weekend and the panic was over in days — far too fast for any daily signal to react to. So why does the ledger show −8% → 0%? The humbler truth: the signal was still standing aside from the 2022 grind when the panic hit. Not clairvoyance — leftover caution. We’d rather tell you that than take the bow.
A full year of grind. The signal was out far more than it was in, and a −24% buy-and-hold drawdown came through as −4% — but a year-long bear with a dozen false rallies means a lot of time parked in cash to get there.
The headline. The signal flipped to stand-aside in late February, days before the worst of it, and rode the −34% out in cash. The best week of its life.
A slow, grinding ten-week bleed into Christmas Eve — precisely the kind of selloff it’s built for. Nineteen percent became one.
The day the short-volatility trade detonated. The warning fired just ahead of it, and the signal sat out two-thirds of the drop.
‘Sell everything,’ said the famous bank note; oil was $26. The signal got you partway out before February’s sharp V-bottom snapped the rest back.
May 2013: Bernanke hinted the Fed would ease off its bond-buying and rates lurched higher — the famous ‘taper tantrum.’ On stocks it was a brief scare, not a crash; the signal eased off and a −6% came through as −1%.
Europe was ‘about to end’ for the third summer running. The market wobbled, the signal eased off, and a −10% became a −6% before the all-clear.
S&P stripped America of its AAA rating on a Friday night and the market gapped lower for weeks. The warning fired into the drop and the signal stepped aside — a −19% for buy-and-hold came through as −8%.
The May 6 crash itself was a nine-minute air-pocket no daily signal can dodge. Through the jittery ‘double-dip’ summer that followed, it shaved a little off the top and otherwise rode along.
The big one. The warning fired early and the signal spent almost the whole eighteen-month bear standing aside in cash — while the market bled out more than half. The vicious bear-market rallies that sucked everyone back in nicked it for a few points on the way down, but nothing remotely like the −55% buy-and-hold rode all the way to the bottom. This is the event the entire idea was built for.
Across 15 scares, the Risk Reducer cut the average worst drawdown from -18% to -4% — better than half. It owns the slow grinders. It can’t dodge a weekend. And it will never, ever show you a flat line through a crisis it didn’t actually catch.
Here’s the strange part. The Risk Reducer reads market conditions — the health and trend of the broad market, not the price of any one thing. It has never seen a Bitcoin price. We didn’t build it for crypto; we didn’t even point it at crypto. We just laid the signal, unchanged, over Bitcoin and Ether — to cash on a warning, holding otherwise. 2015-2026:
| buy & hold | + Risk Reducer | |||||
|---|---|---|---|---|---|---|
| /yr | Sharpe | worst | /yr | Sharpe | worst | |
| Bitcoin | +74% | 1.16 | -84% | +79% | 1.4 | -52% |
| Ether | +77% | 1.08 | -94% | +118% | 1.41 | -58% |
Read that twice: a stock-market signal added return (Bitcoin +74% → +79%/yr) and cut the worst crash by 32 points — on an asset it never looked at.
| Bitcoin in… | buy & hold | + Risk Reducer |
|---|---|---|
| 2018 crypto winter | -84% | -46% |
| COVID crash | -52% | -6% |
| 2022 crash | -77% | -35% |
Why it works: crypto sells off when broad risk appetite collapses — the same market conditions the Risk Reducer already reads. COVID was pure macro fear, so it nearly vanished (−52% → −6%). The crypto-only blow-ups — an exchange failing, a single-country ban — it can’t see. So this is no magic wand: a −52% hole is still a brutal ride, and it doesn’t make crypto safe. But it makes the real point plain: this isn’t a stock signal or a crypto signal — it’s a risk-off signal. When conditions turn, it turns — and that protects whatever risk you’re holding. We show what works; we don’t tell anyone to buy crypto. Hypothetical/backtested on cached spot prices, prior-day signal, no lookahead. Past results don’t predict the future. Educational, not advice.
The day the signal flips — worth the risk, or not — you get the message. No forecast, no drama. Just the read. About a coffee a week.