I read it differently: "a decline of 90% of ... equity assets ... of which 50% or more is due to trades."
This means that 45%-90% of equity was sold off ... they identifying the large sell-offs moreso than just equity drops.
This means that 45%-90% of equity was sold off ... they identifying the large sell-offs moreso than just equity drops.
Here is an example:
Month 0
STOCKS: $100
CASH: $0
Month 1
STOCKS $10
CASH $65
The account holder had their equity holding decrease by 90%. But that is composed of a market loss of $35 and their sale proceeds of $65.
65 / 90 = 72% (which is greater than 50% of the total decrease).
The 50% filter explicitly excludes those that just have market losses, the trader needs to have actively sold between 45-100% of their account value, combined with market losses between 0-45% for a total decrease of 90-100% between both factors.
I still have the same problem. The reason cycles cycle is because of the movement in money demand...which tend to be correlated to everything else. Being able to predict who will panic-sell could be correlated to other things (always a problem in financial economics).
I will need the read paper properly but would be interested to see how they deal with cash coming into and out of the account.