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i posted ths on anther frum, but it mst b 2 hard
Old 04-19-2004, 12:39 PM   #1
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i posted ths on anther frum, but it mst b 2 hard

can this be done ?
post that graph they always show that indicates the directions the stock market has travelled up and down over the course of a year

graph usually looks like a tough mountain stage of "tour of france".

now here is the question

can the graphs from 5 election years past be the ones posted

counting the year we are already in, up til now "graph"

if that makes sense

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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-19-2004, 01:07 PM   #2
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Re: i posted ths on anther frum, but it mst b 2 ha

Actually I cant figure out for beans what you're saying...perhaps if you say what you're looking to find out rather than the approach?

If you're trying to determine common market movement during election years, I can tell you that historically and with good correlation, the first two years of a new presidential cycle are generally weaker than the last two years.

Possible reason is simple: all the economic programs are geared up to make the time period nearer re-election look good, and people have short memories.

And wowie, this year looks pretty good, last year wasnt horrible, the two before that were terrible.

Which would make the next 2 years, if they follow the pattern, not so good.
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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-19-2004, 03:38 PM   #3
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Re: i posted ths on anther frum, but it mst b 2 ha

TH is correct. The year before election years is usually the best of the 4. Election years are the 2nd best. The market usually does not go anywhere in the first 6 months of the election year, and then gains during the 2nd half.
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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-19-2004, 05:27 PM   #4
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Re: i posted ths on anther frum, but it mst b 2 ha

TH,

Correlation in the Market

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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-19-2004, 05:56 PM   #5
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Re: i posted ths on anther frum, but it mst b 2 ha

Out of context, Mr. Chuck.

Somebody suggested there were correlative factors that allowed predictions of return and demonstrative patterns, no matter how "weak" the correlation. When I tried about 5 times to get said person to name the correlative factors in question, I got a definition of the word "correlation", examples of weak correlation, that the correlations were all historic, that they were and then werent meaningful and then an explanation that I misunderstood the original statement.

I dont think I ever disputed that there are market correlations, but simply that they are neither usefully predictive, or useful for any investing purposes.

This is one of those. Usually the first two years of a presidential term are worse than the last two. But not always. And in varying amounts. And sometimes the last two arent hugely superior to the first two. And sometimes the returns on the first two are both positive and good. So nothing actionable except that its historically and statistically a good idea to be in equities during the last two years of a term. But I wouldnt make any investing decisions based on that!

But you did rile me up a little there, so good!
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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-19-2004, 07:43 PM   #6
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Re: i posted ths on anther frum, but it mst b 2 ha

what i wanted was someone who knew about computers.

to post the 5 graphs together so they can be looked at at one time.

to see january thru decemeber of an election year

for 5 different election years.

i want to see these graphs .

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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-19-2004, 08:25 PM   #7
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Re: i posted ths on anther frum, but it mst b 2 ha

5 pieces of paper.

5 Graphs.

A really strong light bulb.

Or

5 8.5x11 mylar overhead sheets

5 graphs

Sometimes the solution is simple.

I can save you some time though. They dont look a lot alike, they have very little in common, other than 4 of the 5 were better returning years than the ones 2 and 3 years before them.
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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-19-2004, 11:39 PM   #8
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Re: i posted ths on anther frum, but it mst b 2 ha

Quote:
Uh, look man. ditto.
A Haiku in the making?

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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-20-2004, 10:02 AM   #9
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Re: i posted ths on anther frum, but it mst b 2 ha

Quote:
Someone mentioned that stock market returns from one year to the next are like a coin flip. *You said this was not so, because market returns are correlated to years that occur prior to and after.

In my opinion with a substantial base of facts, that is not true. *
....

Someone mentioned that monte carlos can produce a higher volume of "bad" scenarios than history provides, and wondered why that is. *I said that was because the randomness of putting together period runs can put together more strings of consecutive bad periods than real history made.
Just out of curiosity, can you clarify your beliefs? Do you believe that the lack of long-term bad runs in the historical data is a random quirk, or do you believe that RTM is intrinsic to the system and that monte carlo simulation fails to account for RTM?

RTM is a form of auto-correlation, so I can't reconcile your two statements above.
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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-21-2004, 02:12 PM   #10
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Re: i posted ths on anther frum, but it mst b 2 ha

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Just out of curiosity, can you clarify your beliefs? Do you believe that the lack of long-term bad runs in the historical data is a random quirk, or do you believe that RTM is intrinsic to the system and that monte carlo simulation fails to account for RTM?

RTM is a form of auto-correlation, so I can't reconcile your two statements above.
Wab, I'll be glad to clarify, while concurrently apologizing to the original poster for the hijack, and also apologizing for being very grouchy. I tend to get that way when I'm trying to express ideas and opinions and someone calls me irrational and implies that my ideas are based on emotional misdirection intended to achieve some sort of "agenda".

My attempts to resolve the contradictions bought avoidance and eventually the passive name calling. I'm very guilty of being caught up in that, and assure I wont be caught up in it again.

Let me see if I can clarify some things.

- I do believe there are correlations in the market. I just do not believe they are measurable and predictable in most cases because the correlations are intertwined with highly variable social issues that inject an element of near randomness over periods of time less than 30 years. Bernsteins "guy walking the dog".

- I do not believe that in short term periods...7 to 10 years or less, that you can use any correlations - measured or implied - to predict anything meaningful about the future with regards to returns, inflation, interest rates, etc. In anything other than a very general way, eg: "interest rates are low now, they'll probably be higher at some point". "Gee, stock market returns have stunk for 10 years, they should get better sometime soon".

- I do believe that RTM happens, and it happens when the social influences weaken and investment values return to their core mathematical/financial value. I believe this can be measured in 30+ year periods.

- The whole disagreement over monte carlo sims comes from this statement. I said that monte carlo sims build their data sets from random periods, hence they can produce a random period that is worse than a historical run of comparable length. The response was: " You are simply not correct about this. Monte carlo analysis must assume something about the distribution of stock returns, bond returns and inflation. The analysis must assume something about the correlation between these distributions. And the analysis must assume somthing about the correlation of the data from year to year. What most monte carlo simulators do is fit the distributions of stock returns, bond returns and inflation to the distributions found from historical data."

I've never seen a monte carlo sim that did this and asked for one, never got it. I got evasive definition arguments over the word "correlation", rattlesnakes and weather prediction.

The root problem is that some folks think that historical data and calculators that use them are just about foolproof for future predictions of their investment returns.

Nice tool, but lets not get too carried away...
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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-22-2004, 04:45 AM   #11
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Re: i posted ths on anther frum, but it mst b 2 ha

Despite their limitations, I believe it makes sense to use both tools (and others) to analyze investment/allocation/withdrawal issues as an input to decision making -- not the only input, but one of the inputs. *The value of simulations using any of the tools available is clearly greatest if the user understands the limitations of the tool and appreciates what kinds of questions it best addresses.

Thanks for saying that, SalaryGuru. It's an important point, one that very much needs to be voiced from time to time and one that very much needs to be understood by the entire community of people with an interest in learning how to put together effective early retirement strategies.
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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-22-2004, 06:12 AM   #12
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Re: i posted ths on anther frum, but it mst b 2 ha

Good posts guys

Being semi - retro and quasi - curmudgeony, I like the grey area between SEC yield(heh, heh Norwegian widow) and 'SWR'(the outer fence line). I enjoy the discussions as to limitations, proper use, and data sets - even to the point of hopping over to the SWR reseach forum once in a while to read. Since I'm already pre-prejudiced I really enjoyed the data the data string of yield of a couple stock/bond portfolios and inflation thru history.

Keep up the good work.
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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-22-2004, 11:15 AM   #13
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Re: i posted ths on anther frum, but it mst b 2 ha

*****, *Surely we should all be in agreement on this point.

Oh, surely.

I'm mighty cautious about the things for which I claim 100 percent certainty, SalaryGuru. But the claim you put forward above is so true and so earth-shaking in its potential implications for our fledgling Retire Early movement that I will make a rare exception to my usual practices of prudence in posting. Just this one time, I will say it just as I feel it, nothing held back.

You are flat-out right about this and any poster who says different is flat-out wrong. I feel so strongly on this point that, should anyone venture to raise a voice of dissent, I will reach through the computer screen and give him or her a big fat punch in the nose.

If no one were to take me up on the challenge within 24 hours or so, my sense would be that we could all stop walking on eggshells and relax again. All of us who participate only at this particular internet discussion board, anyway.
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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-22-2004, 11:18 AM   #14
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Re: i posted ths on anther frum, but it mst b 2 ha

Quote:
Some clarification:

I have never advocated using monte carlo or any other simulation to predict future market performance. This idea is simply something that has been conjured up and asserted as if it were fact.
I dont think I've ever heard anyone say this.

But I suppose that just because you're paranoid doesnt mean "they're" not out to get you...

What WAS said is that in the same thread you did say that monte carlo sims used random logic to build data sets, then later you disagreed with me when I said the same thing. Your statement is quoted above.

This is an interesting strategy in having a discussion. If you take both sides you can agree or disagree with selected others at any time. Certainly makes things lively and introduces exciting unpredictability. Sort of the ultimate devils advocate...someone that disagrees with themselves...
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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-22-2004, 11:30 AM   #15
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Re: i posted ths on anther frum, but it mst b 2 ha

Certainly makes things lively and introduces exciting unpredictability....

You guys feel free to tear each other to pieces.

Just remember, the rest of you, ***** manages to get along with both TH and SalaryGuru. I'm a mental case, that much we know for sure. But it's a gentle-spirited sort of mental illness that evidences itself in my posting.

There's a good reason I don't always take my medications, you know. I've found that taking the medications makes me mean.
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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-22-2004, 12:04 PM   #16
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Re: i posted ths on anther frum, but it mst b 2 ha

The big question I have is if you can punch someone in the nose through the screen, can you hand me a beer as well?

In fact, I've got a 19" lcd, I think a whole six pack will go through.
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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-22-2004, 12:40 PM   #17
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Re: i posted ths on anther frum, but it mst b 2 ha

The big question I have is, if you can punch someone in the nose through the screen, can you hand me a beer as well?

Oh, yes.

I have been told that I have "A Beautiful Mind." I believe that the comment was intended as some sort of dig. But I choose to view these "special" perception skills as not a bug, but an extra-added feature.

As I understand things, the fellow in the movie enjoyed imaginary friends. Well, I enjoy imaginary punches in the noses when such are called for, and, when shooting the breeze with some friends, imaginary frosty mugs. (Why waste my energies imagining up the canned stuff?).

Imagine a mug on me, TH. Imagine the cold and imagine the taste and imagine the flowing, enriching, mind-bending conversation.

There's a chair here with your name on it too, SalaryGuru. Please join us.
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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-22-2004, 12:48 PM   #18
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Re: i posted ths on anther frum, but it mst b 2 ha

What an interesting conversation that would be.

You only need one chair though. SG and I are the same guy.

I just log in alternately under each name, and argue with and insult myself until it looks like another case of two asshats who cant get along on a web discussion.

Hilarity ensues. :P
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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-22-2004, 01:08 PM   #19
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Re: i posted ths on anther frum, but it mst b 2 ha

What an interesting conversation that would be.

Just remember, "interesting" is good.

The day there is nothing "interesting" to say is the day we all agree on all the issues. That's the day they close up all the boards. "Interesting" conversation is what we are aiming to achieve.

The mistake sometimes made is to think that it might be "interesting" to try playing baseball without foul lines. It sounds like an interesting idea because it is so much easier to hit home runs that way, and we all think of hitting home runs as being a lot of fun. The way it turns out in real life, however, is that hitting home runs when there are no foul lines is so easy that it turns out to be no fun at all. In fact, playing without foul lines turns out to be a stone drag for all concerned.

I imagine a discussion board community where there are foul lines and where most posters most of the time aim to hit the ball within them. And where, when they do not, the other players point out that a foul ball counts as a strike, not a point on the board. I imagine aspiring early retirees getting together and having fun conversations about where they have been and where they hope to be going. Not fun because they all agree; fun because the things they are talking about are--interesting.
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Re: i posted ths on anther frum, but it mst b 2 ha
Old 04-22-2004, 01:32 PM   #20
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Re: i posted ths on anther frum, but it mst b 2 ha

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. . . The way it turns out in real life, however, is that hitting home runs when there are no foul lines is so easy that it turns out to be no fun at all. In fact, playing without foul lines turns out to be a stone drag for all concerned. . .
Playing without foul lines? . . . Don't they call that cricket? Which I guess proves your point about it being a stone drag.
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