Going to 100% cash

[fritz]

I originally posted this under "Vanguard: one in three chance of double dip "

As of Wednesday - Dex's T-Theory friend is looking at a down-turn sometime aro. October 11-18, and then a fall-off towards the end of the year.

T Theory

Guess we'll see.....

 

[haha]

Guys, I'm going to step out on a limb here and say that the beginning of September was a great point to be long on the market.

That is a very safe bet, as long as you stop measuring now.

For a longer time, not so clear.

We end with a word about momentum. This month was the best September for the market since 1939, when the [FONT=inherit!important]Dowhttp://www.businessinsider.com/the-...neyGame+(The+Money+Game)&utm_content=My+Yahoo was up 11.1%. Yet, the market dropped 30% by June 1940 and 41% by April 1942. The September 1939 top was not reached again until June 1949, almost ten years later. The market was also up 9.7% in March 2000, before dropping more than 50% over the next 2 ½ years. Momentum can and sometimes does turn on a dime, particularly when not supported by fundamentals.

Read more: http://www.businessinsider.com/the-market-is-on-shaky-ground-and-severely-overextended-2010-9?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheMoneyGame+%28The+Money+Game%29&utm_content=My+Yahoo#ixzz114rIwIvA[/FONT]

 

[chinaco]

If one can strip emotions out of it.... which is difficult to do, it comes down to (realistic) goals in light of the risk.

What are you trying to accomplish? Huge gains on an uncertain run up or preservation of capital so FIRE income is secured?

No right thinking person can know the direction of the market... at best it is a guess based on inadequate information.


I am in the stock market. But you can bet your bottom dollar that I have locked in my income for FIRE!

Do I want to make a buck? Sure! Do I want to keep working because I guessed wrong or made a bad investment decision? H3LL NO!

Those of you that think you are sure of how things will play out... well, guess what will happen?

As always; Some of you will be big losers and some will win. Which will you be?

Me.... I am being a bit conservative. I have a lot to lose. I could gain a lot if I took a big bet... But the downside is not worth it. Why? Because I have already won the FIRE game. My goal now is to secure an income stream.


What is your goal? If it is all in... IMO you better have a long-time horizon before you need your money, because it may not turn out as you hope... (hope... because you certainly do not know)!

 

[Gone4Good]

That is a very safe bet, as long as you stop measuring now.

Um, yeah. But the justification given for getting out in late August was a short-term technical indicator of 200 day and 50 day moving averages. So if you're judging the effectiveness of the indicator, it failed. And pretty miserably at that, considering that the S&P had its best September in 70 years.

But I'm sure all of the other technical mumbo-jumbo will work out much better in the future.

 

[Dawg52]

Me.... I am being a bit conservative. I have a lot to lose. I could gain a lot if I took a big bet... But the downside is not worth it. Why? Because I have already won the FIRE game. My goal now is to secure an income stream.

Same here.

 

[ERD50]

Originally Posted by chinaco View Post
Me.... I am being a bit conservative. I have a lot to lose. I could gain a lot if I took a big bet... But the downside is not worth it. Why? Because I have already won the FIRE game. My goal now is to secure an income stream.

Same here.

All well and good, but... inflation?

-ERD50

 

[TromboneAl]

Well, I have to hand it to you dex, you hit that low point with remarkable precision!

 

[ziggy29]

All well and good, but... inflation?

Too bad we don't live on cruise vacations or big screen TVs, because then we wouldn't have to worry about it for a while...

 

[shotgunner]

The lesson I take away from this is that none of us can predict the future with any great degree of accuracy. It is easy to become fearful and it's just as easy to get greedy. I have no idea what the future holds so I will continue to keep a portfolio with a mix of equities and fixed income and try to keep it balanced while ensuring I have several years of "guaranteed" monies.

 

[MichaelB]

ECRI says the odds of falling back into recession are 1 in 2. Vanguard says 1 in 3. Neither of these are Chicken Little's or permabears and both are more often right than wrong.

Folks should'nt have money in equities if they can't afford a sudden and deep decline. While I have not followed those that took their equity allocations down I also don't criticize them for doing so and think their sharing that on this thread is positive.

 

[ziggy29]

ECRI says the odds of falling back into recession are 1 in 2. Vanguard says 1 in 3. Neither of these are Chicken Little's or permabears and both are more often right than wrong.

I would agree. On an anecdotal level I don't know many people (who have to work for a living, anyway) who is feeling confident enough about their job security and income security to start cranking up spending on stuff they don't need. As long as that mentality is widespread, the feeling that we need to cut back on discretionary stuff in case we lose our jobs becomes more of a self-fulfilling prophecy.

 

[Martha]

I give Dex credit for saying what he was doing when he did it and why. I appreciate that far more than the people who come here and say months after the fact that they sold at the near term high or bought at the near term low. Even if that is all true, you don't get many who are willing to say they bought at the high and sold at the low. I thank Dex for taking a risk before a tough audience.

 

[ziggy29]

I give Dex credit for saying what he was doing when he did it and why. I appreciate that far more than the people who come here and say months after the fact that they sold at the near term high or bought at the near term low. Even if that is all true, you don't get many who are willing to say they bought at the high and sold at the low. I thank Dex for taking a risk before a tough audience.

Agreed. Rubbing someone's nose into a decision to go into cash before a market rally is really not much different than the "I told you so" bears who went to cash while rubbing the buy and holder's nose in it during the 2008-09 crash.

And if we didn't appreciate that, I don't know why we'd think turning the tables is any more acceptable.

 

[samclem]

I guess if T-Al hadn't put the smiley-thang in, and if the timing weren't quite so amazing, and if dex hadn't already proven that he's eager to engage in the to-and-fro of the board, and if dex's arguments in favor of market timing weren't so adamant, then maybe I'd take exception to T-Al's comment.

Anyway, dex may get the last laugh when the timescale of that chart has a chance to expand a bit, and he'll get to recall T-Al's post with glee.

 

[REWahoo]

I give dex high marks for courage and certainly hold his actions far above the after-the-fact "I told you so" types. However, I think anyone who posts here about their attempt to time the market should expect criticism or praise once the results of their [-]gamble[/-] strategy plays out. Simple human nature.

 

[NW-Bound]

I have not posted for a while. Been RVin', ya know, and where we've been staying most of the time, there's no Internet, no cell phone signals.

And when I do get Internet access, I am just too tired at the end of the day to surf much. Too busy with travelin', hikin', sight seein'...

Right now, I just happen to be at a public library in a small Californian town to check my portfolio. Compared to its value on 8/23 when this thread started, I am doing quite OK. Though I am opposite Dex on our recent trades, I respect his opinion and action. "You pay your money, and you take your chances".

And by the way, at a National Park RV campground in Utah, I saw a man with a Casita and I though of Dex. No, I observed but did not ask him Well, it could be him, and I would also have to reveal myself

Will have to log off soon to resume what we have been doin'... Life is still good... Just a quick post to let everyone knows I am still alive and kickin'...

 

[Zathras]

I give Dex credit for saying what he was doing when he did it and why. I appreciate that far more than the people who come here and say months after the fact that they sold at the near term high or bought at the near term low. Even if that is all true, you don't get many who are willing to say they bought at the high and sold at the low. I thank Dex for taking a risk before a tough audience.

+1

Very much agree.

 

[dex]

It appears there are a lot of market timers here. This is a slo motion asset re-allocation. As everyone knows I do not time the market (speak with audreyh1 about that).

I have no problem posting what I do financially and how my net worth has performed. It might help those thinking about ER. The past few years have been challenging for investors. And if my net worth (excluding home) is down 1% from 2006 - I think I'm doing OK.

I too think it was gauche for some to post at the low of the market that they were glad they got out earlier. Comments like that reveal more about the poster than what I am doing.

Mentally, I am prepared to be in cash until the end of the year. I'll be watching along the way for an entry point. My weighting would be heavier in High Yield Corp bonds than stocks - if any. This would provide me with a good interest rate and some appreciation if there is a rally. There may be rallies in the future but they will have lower highs and of shorter duration than the recent one.

 

[REWahoo]

This is a slo motion asset re-allocation. As everyone knows I do not time the market ...

OFGS!

Dex, I love your sense of humor.

 

[BigNick]

We end with a word about momentum. This month was the best September for the market since 1939, when the [FONT=inherit!important]Dowhttp://www.businessinsider.com/the-...neyGame+(The+Money+Game)&utm_content=My+Yahoo was up 11.1%. Yet, the market dropped 30% by June 1940 and 41% by April 1942. The September 1939 top was not reached again until June 1949, almost ten years later. The market was also up 9.7% in March 2000, before dropping more than 50% over the next 2 ½ years. Momentum can and sometimes does turn on a dime, particularly when not supported by fundamentals.

Yeah, you never know when the Germans will invade France and the Japanese will take Singapore.

 

[TromboneAl]

I guess if T-Al hadn't put the smiley-thang in, and if the timing weren't quite so amazing, and if dex hadn't already proven that he's eager to engage in the to-and-fro of the board, and if dex's arguments in favor of market timing weren't so adamant, then maybe I'd take exception to T-Al's comment.

Anyway, dex may get the last laugh when the timescale of that chart has a chance to expand a bit, and he'll get to recall T-Al's post with glee.

Right. I hesitated to post that, and hoped the that smiley would indicate the good-natured ribbing that was intended.

I also think that a time-frame of one month isn't enough to prove dex's move right or wrong.

 

[Gone4Good]

The lesson I take away from this is that none of us can predict the future with any great degree of accuracy.

The lesson I take away is that the human mind has a remarkable capacity to see patterns in randomness (have you ever looked at the constellations?). Technical analysis is no different.

 

[ERD50]

Right. I hesitated to post that, and hoped the that smiley would indicate the good-natured ribbing that was intended.

I also think that a time-frame of one month isn't enough to prove dex's move right or wrong.

That's how I see it too. And I would expected dex to chuckle at the joke too. He was bold and brave enough to lay it out there, he knows this crowd, he has to expect a little joking/push-back. And the timing was an eerie co-incidence (or maybe not?). I don't think any explanation is needed T-Al, but that's just me.

Anyhow, I'm glad to see that dex posted the OP, and glad to see the responses. It gets me thinking, and that's good. I guess I'd say that I am, in my heart, a dirty market timer (two Hail Marys and an Our Father?) I don't think I'm alone, and I also don't think I'm alone in admitting that at this stage, I just don't trust my instincts enough to risk doing anything like a 100% of anything. But... (and I'm also a contrarian, economically and otherwise ), so this fast run up really does have me thinking about checking to see if a re-balance is on order, or even taking a degree of market timing, and adjusting my AA to a bit more conservative level (I'm pretty aggressive, ~ 75% now), but nothing drastic.

It's all good, that's what I say.

-ERD50

 

[clifp]

I am dirty market timer also and a stock picker, option seller and am I guilty of other financial high crimes and misdemeanors. In truth I am not happy if I am not thinking about buying or selling something.


The things that keeps me out of trouble is that only buy and sell about 1/3 of the time that I think about it. And all of my wheeling and dealings only affect about 1/3 of my total portfolio. Meaning basically I have a slightly larger testosterone than Uncle Mick

 

[bbbamI]

I have not posted for a while. Been RVin', ya know, and where we've been staying most of the time, there's no Internet, no cell phone signals.

Ye gawds man...how have you been survivin'.......

Will have to log off soon to resume what we have been doin'... Life is still good... Just a quick post to let everyone knows I am still alive and kickin'...

Y'all be safe and have a good time.