BEAT THE COUCH · THE ARCHIVE · THE DOWNGRADE

Could You Have Timed the 2011 Downgrade?

THE WINDOW: NOV 1, 2010 TO OCT 31, 2012 · 504 TRADING DAYS

In August 2011 the US lost its AAA rating and the market had its worst day since 2008. The couch held and ended with $12,446. 30.0% of 1,458 players beat it.

THE COUCH'S $10,000, DAY BY DAY, REAL DAILY DATA

$10,000 START $12,446 Nov 1, 2010 Oct 31, 2012

What the couch did

ENDED WITH$12,446 (+24.5%)
WORST DRAWDOWN-19% by Oct 3, 2011
WORST SINGLE DAY-6.7% Aug 8, 2011
BEST SINGLE DAY+4.7% Aug 9, 2011
CASH INSTEAD (T-BILLS)+0.1%

What happened

November 2010. The recovery is a year and a half old and still nobody believes it. Greece needs a bailout, then Ireland, then Portugal. Every few months the euro is about to break up.

On Friday, August 5, 2011 Standard and Poor's strips the United States of its AAA credit rating. On Monday the market falls almost 7%. On Tuesday it rises almost 5%. The drawdown reaches 19% by Oct 3, 2011, and every week has a new reason it could get worse.

It does not get worse. The couch finishes the window with $12,446, +24.5%. Cash paid +0.1%, which is to say nothing.

What the players did

GAMES FROM THIS YEAR1,458
BEAT THE COUCH30.0%
CERTIFIED SKILL15.3%
MEDIAN TRADES5
MEDIAN TIME IN MARKET60%

Player figures cover every game whose window started in 2010, not only the exact hand above, and come from the run export of October 31, 2026. A win counts as SKILL only if it beats 90% of 1,000 monkeys replaying the same window with the same trade count and the same time in the market. Across the thirty windows in this archive players beat the couch 39.2% of the time, because these are the famous years. Across the whole ledger the couch wins 62% of 120,800 games.

The read

30.0% of 1,458 players beat the couch, and 15.3% passed the monkey audit. With cash paying zero, every day out of the market is pure cost, and the downgrade gave everybody a reason to step out at exactly the wrong moment. The median player finished -4.3% against the couch.

Play this exact windowfree, no signup, about two minutes. Same two years, same data, no hindsight.

Frequently asked

What happened to the stock market when the US was downgraded in 2011?

The market fell almost 7% on Monday, August 8, 2011, the first trading day after the downgrade, and rose almost 5% the next day. A couch holding from Nov 1, 2010 ended with $12,446.

Did selling during the 2011 euro crisis help?

Usually not. In windows starting in 2010, 30.0% of players beat a couch that held through it.

Method: real S&P 500 daily total returns, dividends included, calibrated to Damodaran's annual series; cash earns 3-month T-bills. The same data the game deals. See the evidence page for sources, and the full ledger for the whole ledger.

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Not financial advice. The couch is not licensed for anything.