The strategy relies on identifying market turns by measuring extreme sentiment through mass participation, specifically by fading overcrowded long or short positions.

“I am measuring that capitulation by participation. Meaning, how many people are long, how many people are short. I'm looking for mass amounts of shorts Mhm. in order for me to start buying, or mass a lot of longs in order for me to start to look to get short. I'm fading mass participation.”

Gajendra Kothari believes in actively seeking out underperforming sectors or funds, viewing market bubbles as opportunities to avoid and market panics as opportunities to buy.

“The whole world is buying the best performing fund. I'm actually buying the onear fund or zero star funds and it has worked wonderfully well.”