The Analyst’s Course · Macro Regimes
Case File: Three Regimes, One Decade
2013: the tantrum (premium shock)
What the panels would have shown: CAPE ~20–22 (above median, not extreme), curve steep and stable pre-May, then bear-flattening as the 10Y jumped ~100bp on taper talk. The correct regime read: not a valuation signal — a term-premium repricing with a pinned front end. What a regime-follower did: trimmed duration-sensitive equity (long-duration growth) while valuations were mid-range; what happened: growth stocks de-rated 15–25% into 2014 while the index recovered by year-end. Outcome spread: right mechanism, modest cost, no crisis — most regime calls are like this.
2020: the pandemic (liquidity shock)
Panels in February 2020: CAPE ~31 (p88), curve fine. The crash was not on any dashboard — exogenous, mechanical, fast (−34% in 23 sessions). Then the panels earned their keep on the other side: CAPE spiked to ~29 only because earnings collapsed (the 2009 lesson — smoothing sees through it), the curve stayed steep as the front end went to zero, and the liquidity signal (lesson 7) fired at maximum volume. A regime-follower re-risked into Q2-2020 while headlines screamed; the subsequent 12 months were the best 12 in modern equity history. The lesson: exogenous shocks require liquidity tools, not valuation tools.
2022: the rate shock (denominator)
Panels in January 2022: CAPE ~38 (p98+), curve flattening hard from March, inversion by July. Both signals pointed the same way: long-duration risk was being repriced from an extreme starting point. A regime-follower holding a p95 tilt from 2021 entered the year already de-risked — the tilt's tuition (2021 underperformance) was repaid in one year. S&P −19%, Nasdaq −33%, 60/40 worst since 1937, while the tilt cohort drew down meaningfully less. Three regimes, one decade, same instrument set: CAPE for level, curve for mechanism, humility for timing.
The honest scorecard
Grade the decade: 2013 — mechanism right, size small, cost modest. 2020 — valuation panel useless for the crash (exogenous), essential for the recovery. 2022 — both panels early and right, the only year the signals paid cleanly in-year. That is the realistic distribution: one clean win, one assist, one tuition payment, per cycle. Anyone selling more than that from two dashboards is selling something else.
What you'll practise
For the 2020 crash specifically, the most useful panel signal was…
3 graded checkpoints · certification exam at the end of the track
Sources
Shiller, Irrational Exuberance (3rd ed.); Estrella & Mishkin (1996); multpl.com; US Treasury
Learn content is for education only — not individualized financial advice, a recommendation, or a solicitation to buy or sell any security. Options involve substantial risk. Examples are simplified and historical patterns never guarantee future results.