i need a summary of the article "back in the hunt" by clifford asness

Market timing considered by many an investing sin, can be a blessing if employed modestly, using a combination of contrarian and trend following strategies. Authors apply these ideas to stocks and bonds and their combination; arguing that if employed in moderation, market timing can be a grace.

To be on point, market timing is very hard. For those who think market timing a two asset mix of stocks and bonds is impossible, authors give some measured hope, while for those who think it's easy, authors show that it isn't. The author of this article advice us therefore to sin a little.

We can say that market timing isn’t really a sin except, as for so many things, if done to excess. If market timing is a sin, then there are times when even the saints can be tempted into sinning a little. There are two simple strategies that governs the investing world basic value i.e. contrarian investing and basic momentum i.e. trend-following.

Some of the strongest evidence generally in favor of timing the market comes from studies of long-term predictability of stock market returns using valuation measures like the dividend yield or price-earnings ratio. Currently, the ratio is about 25, shows that equities are very expensive compared with historical levels but not very close to record highs.

Let’s sum up the practical recommendations for disciplined market timing which the author suggest in his article:

Combine signals:

Across investing, contrarian and trend strategies tend to pay off and diversify each other and seem to work best as equal partners. Auther certainly do not recommend looking at each area of investing separately and choosing which worked better in a backtest. In the case of timing, one could make an argument that trend following is more robust. A trend is a trend; it’s easy to define, whereas valuation measures may have long drifts, perhaps for some valid reasons, making them more difficult to compare through time.

Breadth is important:

Timing across asset classes i.e. more than one is important, as is using multiple signals. Contrarian and trend following (among other styles like carry, low risk, and high quality) are shown to be useful. So use timing in as many places as possible.

Timing is a moderate reward to risk strategy:

As such, investors should employ timing, but only in very moderate amounts. Timing has the potential for rewards, but it is not a high-return-for-risk strategy.

Don’t be binary:

It makes much more sense and more likely to succeed over the long haul to own less of an asset class when you are less positive on it, and vice-versa. Many popular studies of market timing don’t just act asymmetrically but only have one action — not just getting out of stocks or bonds but getting out entirely. Don’t employ market timing by getting in or out of an asset class entirely.

Have modest expectations:

If we look as a broad concept, market timing is not a sin, particularly if based on the same principles i.e. value and momentum. It is also not a high return for risk strategy. The proper thing is to do them, but only in very moderate amounts. Portfolio theory doesn’t tell us to only do the very best things but to do everything that can add value proportional to how good it is.

              In shortest way possible, when prices look cheap versus a reasonable metric, buy a bit more. When they have been trending up, buy a bit more. Of course, also do the opposite, and average both these approaches, doing the most when they agree. Do it in both stocks and bonds. Avoid the other most common errors in timing that we highlight, which we think are just common sense. Do so, and we think you may be able to add a little return over the long term, avoid some of the worst pain, or experience both.