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Abrupt change in plans
Old 06-04-2011, 02:46 PM   #1
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Abrupt change in plans

Hi all,

I'm 54 with 2 teenagers. My skills in the stock market are abysmal, unfortunately, or I'd be in great shape. (I managed to LOSE money during the 1984 - 2000 mega-bull market, *sigh*) Fortunately DW and I were frugal and paid off all our debts. We own two houses (our own and a rental) free and clear. Things were looking pretty good. Or so I thought.

Unfortunately life had other plans -- DW recently informed me she no longer wants to be married to me. So in addition to the shock and grief of losing a 20-year marriage, there went half of my/our income & net worth, and my dreams of a fun retirement together. Fortunately I don't have to worry about alimony, since one of her complaints was that I didn't earn as much as she did (as much as I "should" have). We're splitting amicably and we'll share expenses of raising the boys.

So I'm planning on my own now. Even after helping our sons with college, I think I'm in moderately good shape. Not able to retire yet, especially with kids still at home, but in 8 years when the boys are out of college (or maybe even sooner) I think I'll be ready.

I also have an ace up my sleeve. Even though I can't pick a good stock to save my life, I'm very good at developing technical trading models for futures and other exotic markets, and some of those concepts can be applied to stocks as well. I did it professionally (and very successfully) for a few years around 2000-2002. If I'd done as well in 2002-2003 as I had for the 4 previous years, I could have retired years ago. Unfortunately the market changes after 9/11 blew a hole in the strategies I'd developed and forced me to close our commodity fund. Meanwhile DW had always despised my trading, considering it nothing more than a gambling addiction, so in an attempt to preserve domestic harmony I haven't been doing any active trading for the last 10 years. I've just been getting back into it recently. I'm confident I can place a portion of my portfolio into aggressive technical strategies that will significantly boost my overall returns. Haven't done much with real money quite yet -- still researching and deciding on the best approach.

I'm looking forward to learning lots and enjoying the community!
Gary
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Old 06-04-2011, 02:59 PM   #2
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Even though I can't pick a good stock to save my life, I'm very good at developing technical trading models for futures and other exotic markets, and some of those concepts can be applied to stocks as well. I did it professionally (and very successfully) for a few years around 2000-2002.
Uh oh...

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If I'd done as well in 2002-2003 as I had for the 4 previous years, I could have retired years ago. Unfortunately the market changes after 9/11 blew a hole in the strategies I'd developed and forced me to close our commodity fund.
As a legendary poster on this forum was fond of saying about 'trading models': "It will work - until it doesn't". Then it can resemble gambling...
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Old 06-04-2011, 03:02 PM   #3
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Welcome Gary, now that you are confident that you can time the market can you help us all out?
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Old 06-04-2011, 03:13 PM   #4
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Fortunately I don't have to worry about alimony, since one of her complaints was that I didn't earn as much as she did (as much as I "should" have).
Hey, I just don't understand this. I have learned on this board that women just love having house husbands, and they they no longer require or even want a man to be more successful- just that he make a good soufflé.

My personal experience was more like yours- she would shout at me, why don't you get a job?!- even though I was responsible for all the cash that came into the house.

See if you can get alimony from her, that would be a man bites dog story for sure.

Good luck, the pain lessens over time, and you may one day look back with relief that she is gone.

Ha
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Old 06-04-2011, 03:24 PM   #5
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Welcome. Sorry to hear about your breakup. Been there, done that, got the lawyer's bill to prove it.

As ha said, it gets better over time and you may well find someone that will truly make you happy.
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Old 06-04-2011, 04:01 PM   #6
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As a legendary poster on this forum was fond of saying about 'trading models': "It will work - until it doesn't". Then it can resemble gambling...
I absolutely agree that trading models don't work forever, or all the time.

Of course, neither does any stock-picking technique I've ever heard of. Does that mean stock investing resembles gambling?

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Welcome Gary, now that you are confident that you can time the market can you help us all out?
OK, here's a simple example. The market has gone just about sideways for the last 10 years. If you'd bought SPY, the S&P 500 ETF, back in early 2000, you'd be down about 10-11% now. And you would have suffered through some pretty gut-wrenching gyrations in your account balance.

How does this look?



That's the profits from trading a very simple strategy on a $100k account, NOT compounding the profits. It returned an average of about 11.5% per year, with only one losing year (-10.5% in 2000).

And it's dead simple:
* Once a month, record the closing value of the S&P 500.
* Calculate the average value of the last 12 months' closes.
* If the LOW of the past month is greater than the average, you want to be long. If you're not long already, buy SPY, the S&P 500 ETF.
* If the HIGH of the past month is less than the average, you want to be short. Sell your SPY and buy SH. SH is an inverse S&P 500 ETF that goes up when the S&P goes down.

If that's not exciting enough for you, you could buy SSO and SDS instead of SPY and SH. Those are also S&P 500 ETFs but they move 2x as much as the "normal" ETFs. That should roughly double your returns.

Here are the trades you would have taken. Not too bad for such a simple strategy.



Will this work all the time? Of course not. If the market got into an extended sideways period, you could end up going long just as the market turned around and headed down, and vice versa. The S&P500 did that from about 1960 to 1973 and this strategy went sideways for 13 years. But so did the market, so you were no worse off. Same thing in the late 80's. But other than that it's worked very well on the S&P500 for the last 50 years.

haha and TL, thanks for the kind words. And haha, you don't know the half of it. I was doing most of the child care and cooking all of those soufflés (I'm a gourmet cook) -- but I was also earning a high 5-figure income most of the time. Go figger.

Gary
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Old 06-04-2011, 04:52 PM   #7
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Sorry to hear about your breakup. You might want to consider that your current state of mind is unlikely to be objectively reliable and be cautious about committing resources you can't afford to lose to a plan that would let you say "I told you so" to a departing spouse.

Alimony may not be an issue for you since your spouse earns a good income, but child support could still be substantial. Better know all the particulars before you make plans.

Lastly, spouse no longer wants to be married to you doesn't make clear whether this is a situation without hope, or if you could find a way to work together and salvage the relationship. There is lots of information available if you want to try, but a lot is not intuitive so you should probably do some research quick if you want to go for it.
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Old 06-04-2011, 06:46 PM   #8
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You might want to consider that your current state of mind is unlikely to be objectively reliable and be cautious about committing resources you can't afford to lose to a plan that would let you say "I told you so" to a departing spouse.
Sound advice. I'll confess it has crossed my mind. But my long-term goals of retirement are a much bigger motivator than "showing her."

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Lastly, spouse no longer wants to be married to you doesn't make clear whether this is a situation without hope, or if you could find a way to work together and salvage the relationship.
Long story, but no. We went to several marriage counselors for about 4 months but her mind was made up. While I love her dearly, we always had many incompatibilities. As TL said, I hope to find someone who will make me happier than she ever did. Is there a dating board on the forum??
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Old 06-04-2011, 07:09 PM   #9
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I hope to find someone who will make me happier than she ever did.
Sorry to be picky, esoteric or whatever this is but I have a long-standing mantra... nobody can MAKE YOU HAPPY! That's entirely up to you. Now, whether they can make you UNhappy is a whole different matter!!!!
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Old 06-04-2011, 07:18 PM   #10
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LOL Brad, right you are. Badly worded. I hope to find someone who I can be happy with -- better?
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Old 06-04-2011, 07:49 PM   #11
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I think so! I'm going on 20 years with my second and I'm very happy that I had a second chance. Meeting her has opened doors in my life that I couldn't have imagined before!
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