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That’s what Wall Street Bigwig Barton Biggs told Maria Bartiromo last week. Now there’s at least one fairly reliable stock market indicator confirming Mr. Biggs call:

Called the Recession Buy Indicator, it was devised by Norman Fosback, who was editor of Mutual Funds magazine in the 1990s and the author in the mid-1970s of the popular investment textbook “Stock Market Logic.” He currently edits Fosback’s Fund Forecaster, an investment newsletter.

The indicator is based on the notion that it is darkest just before the dawn — that when the economic news becomes bad enough, the stock market’s likely subsequent direction is up. Because the stock market is forward-looking, Mr. Fosback said in the most recent issue of his newsletter, it “has little use for yesterday’s, or even today’s, crises.”

“The focus,” he added, “is always on the future — how will business be six months, or a year or two, from now?”

When the economy appears to be on tenuous ground, as it does today, he said, “stock investors looking well out to the future are able to perceive the seeds of the next economic expansion.”

Like Biggs, the indicator has some real history:

He came up with this indicator in 1979, and since then it has set off four buy signals (not counting the current one). On average over the 12 months following those signals, according to his research, the average stock on the New York Stock Exchange had a total return of 37 percent. And in the three years after such a signal, the average gain was 106 percent. These gains are triple the stock market’s long-term average.

(Mr. Fosback has also backtested this indicator to the late 1940s, the earliest period for which data on the coincident economic indicators were available, and it performed just as well from then until the late ’70s as it did in more recent decades.)

It feels like a contrarian long-term call right now (which is a good thing) but, as such, it may take some patience in the short-term.

An Alarm Is Blaring: Time to Buy
Mark Hulbert
The New York Times