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Old 01-26-2013, 10:46 PM   #141
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Perpetually Out of Step

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Mutual fund flows suggest that investors are finally returning to equities, after selling in droves over the past several years. This article summarizes the issue:
From April 2009 through now, mutual-fund investors sold a quarter trillion dollars in stock funds, according to recent data from the Investment Company Institute.
Ironically, that selloff coincided with a period of stellar performance in stocks—when the Dow Jones Industrial Average jumped more than 60%.
Ouch. Mutual fund investors have been busily pulling money out of equities even as the market has risen 60%. And now investors are returning to the equity market and buying shares at a hefty premium to what they could have purchased them for if they had invested consistently over the last several years.
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Old 01-26-2013, 10:52 PM   #142
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The retail rubes are always a day late and a dollar short. I will be quite happy to sell equities to them in the future at inflated prices.
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Retail Investors
Old 01-26-2013, 11:07 PM   #143
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And your point is that now that everyone is buying stocks, now is the time to get out?
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Old 01-26-2013, 11:15 PM   #144
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And your point is that now that everyone is buying stocks, now is the time to get out?
Nope, the point is that retail investors are unfortunately their own worst enemies. They freak out and sell en masse (at exactly the worst moment) and they do the same when they finally decide that maybe the water is calm and decide to jump into the pool (long after the smart money has gotten long).
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Current Environment
Old 01-26-2013, 11:24 PM   #145
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Nope, the point is that retail investors are unfortunately their own worst enemies. They freak out and sell en masse (at exactly the worst moment) and they do the same when they finally decide that maybe the water is calm and decide to jump into the pool (long after the smart money has gotten long).
So, what do you think about investing in the current environment?
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Old 01-26-2013, 11:31 PM   #146
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So, what do you think about investing in the current environment?
I am a dirty bottom fisher/deep value investor by nature. I always go for the unconsidered trifle (which probably explains my delight in squirrel hunting in a state where everyone is after deer, antelope, elk, etc.). There are a few obvious values out there (and I have bought plenty of the names that are cheap), but pickings are getting slim. The junk market is unattractive, so I will let what I own get called and deploy the funds elsewhere. On the bright side, if credit spreads keep tightening aggressively it will foster an upward repricing of equities as the LBO shops and aggressive corporate acquirers use cheap leverage to do their thing. Obviously high grade fixed income is foolishly expensive.

Macro-wise the environment is OK and improving. That means that we should see good results for equities and commodities and I expect cyclical equities will do real well.
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Old 01-27-2013, 05:34 AM   #147
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So, what do you think about investing in the current environment?
I repeat:

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A physicist, chemist and economist are stranded and starving on an island. A can of soup washes ashore. The physicist proposes to smash it open with a rock. The chemist suggests building a fire and heating the can first. The economist says: "Assume we have a can-opener ..."

Or, if they're thrown down a well: "Assume we have a ladder."

The great economic historian Peter Temin tells another in his latest book, "The Roman Market Economy":
An economist meets a colleague on campus who asks, "How are your children?" "Compared to what?" the economist replies.
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Old 01-27-2013, 05:15 PM   #148
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Today, I was "catching up" on my reading and thought these two articles (well, it is kind of a part 1/part 2 but isn't identified as such.) would fit in here:

Investors’ 10 Most Common Behavioral Biases

Top Ten Ways to Deal with Behavioral Biases

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In other words, if we believe something to be true, we quite naturally assume that those who disagree have some sort of problem.
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In his 1974 Cal Tech commencement address, the great physicist Richard Feynman talked about the scientific method — a careful and consistent process designed to root out error – as the best means to achieve progress. Even so, notice what he emphasizes: “The first principle is that you must not fool yourself–and you are the easiest person to fool.”
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No matter how good our process is, we need also to assume that we have made errors and set out actively to find them by testing and confirming everything possible. Once we have decided that a given view is correct or committed to a particular course, confirmation bias has a tendency to take over. Planning to be lucky and believing that psychological realities don’t apply to us is a lovely (if arrogant) thought. But it’s not remotely realistic. Keep testing and looking for ways that you’re wrong.
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I often refer to myself as a recovering attorney, and there is a great deal about the practice of law that is frustrating and silly. But one excellent technique I learned from my time in that profession is to argue the other side’s case. Understanding and even appreciating a contrary point of view is helpful to our own thinking and can provide a good check on the coherence of our own viewpoints. Understanding and seeking support for the opposition’s best arguments is a powerful learning tool. We might even decide that – gasp – mistakes were made (almost surely by someone else, of course).
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arrogance and certainty are frequent enemies of continued investment success. Your accountability partners can and should help here, of course. Spouses are especially expert at promoting humility.
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"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
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Old 01-27-2013, 08:02 PM   #149
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Apparently the massive inflows into equities story is not true - maybe a week made all the difference. I don't have a reference yet.
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Old 01-27-2013, 08:35 PM   #150
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Originally Posted by RonBoyd View Post
Today, I was "catching up" on my reading and thought these two articles (well, it is kind of a part 1/part 2 but isn't identified as such.) would fit in here:
Nice link and an excellent reminder.

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Apparently the massive inflows into equities story is not true - maybe a week made all the difference. I don't have a reference yet.
This past December was especially unusual with all the dividends and compensation pulled ahead, so I am reluctant to jumps to any conclusions based on any month to month or year to year data. Right now the economy is chugging along and the radar screens are free of icebergs.
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Old 01-27-2013, 09:52 PM   #151
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So, I read the linked articles, and thought they were good.

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Originally Posted by RonBoyd View Post
Today, I was "catching up" on my reading and thought these two articles (well, it is kind of a part 1/part 2 but isn't identified as such.) would fit in here:

Investors’ 10 Most Common Behavioral Biases

Top Ten Ways to Deal with Behavioral Biases
But then, if I like to see posts like the following, which agrees with my understanding of the current state of the world economy, people are going to say that I suffer from confirmation bias, right?

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Macro-wise the environment is OK and improving. That means that we should see good results for equities and commodities and I expect cyclical equities will do real well.
Anyway, I have placed my bets, and am patiently waiting to see if my prediction plays out. Will post result in a year.
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Old 01-28-2013, 04:12 PM   #152
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I think you have an asteroid fixation.
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Are you suggesting my asteroid needs fixing?
Blame that on me.

I posted that NASA link about the asteroid fly-by next month in another thread. I suspect that REWahoo hasn't slept since.

The 2012 DA14 fly-by is predicted for Feb 15, 2013. Hmmm...isn't that the same day my VG brokerage data will be available ?

2012 DA14 - Wikipedia, the free encyclopedia
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Old 01-28-2013, 05:00 PM   #153
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I posted that NASA link about the asteroid fly-by next month in another thread. I suspect that REWahoo hasn't slept since.
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Old 01-28-2013, 05:19 PM   #154
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There's no time to waste! Is it really an asteroid fly-by or a real "fly-to"?

I do not know how fast Vanguard can transfer the money to a shareholder's checking account, but there are only 17 days left.

Assuming one has 17 days left to spend it all, would that be called 100%WR in 2013, or should that be counted on an annualized basis as 100% X 365 / 17 = 2147% WR?

Forget about tax liabilities like several recent threads discussed. I would just spend all of the proceed and would not share any with the IRS.
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Old 01-28-2013, 05:25 PM   #155
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Too late. I spent everything just prior to the Mayan apocalypse last month, and am currently living on pine needles from my neighbors' discarded xmas trees. Good thing I kept that Euell Gibbons cookbook!
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Old 01-28-2013, 05:31 PM   #156
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Good thing you are not my neighbor!

Well, you see, I threw away the artificial Xmas tree which I kept for 20+ years. Its needles are plastic, and would cause you a helluva indigestion.
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Old 01-28-2013, 07:30 PM   #157
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Too late. I spent everything just prior to the Mayan apocalypse last month, and am currently living on pine needles from my neighbors' discarded xmas trees. Good thing I kept that Euell Gibbons cookbook!
Post Grape Nuts! Never knew grapes had nuts, but this is a learning forum. Any recipes you wanna share?
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Old 01-28-2013, 08:30 PM   #158
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PsychTrader - [Perspective] Avg daily return for $SPY by month. 1/13 best ... | StockTwits

This was posted on Stocktwits. Average daily return for SPY by month since 2000.
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Old 01-28-2013, 08:56 PM   #159
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PsychTrader - [Perspective] Avg daily return for $SPY by month. 1/13 best ... | StockTwits

This was posted on Stocktwits. Average daily return for SPY by month since 2000.
SPY was 50/50 for up months vs down months in the past 13 years. The worst times of the years were June/July. Thus the old see: sell in May and come back in September?
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Old 01-28-2013, 09:08 PM   #160
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Too late. I spent everything just prior to the Mayan apocalypse last month, and am currently living on pine needles from my neighbors' discarded xmas trees. Good thing I kept that Euell Gibbons cookbook!
Euell Gibbons...Talk about a blast from the past. I haven't heard that name in forever. I remember those commercials. I couldn't resist and googled him. Died in 1975, wow that was a long time ago. I guess no one under 30 would have got your joke. I truly am getting old.....
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