Is anyone tempted to do some "market timing"

[Notmuchlonger]

So for the people who got "out" . Whats your criteria for getting back in?

 

[danm]

If it's a typical recession than later this year should see bottom. If the de-leveraging continues (this is a solvency bust not liquidity) then ... we'll see.

Problem is I don't see where the long term growth will come from for the next decade. I believe that the global growth idea is a red herring, examining trade balances shows that it's all going here in the US, mostly due to home equity withdrawal which is over with.

I opine the money won't be as easy in the next decade as it was in the last.

So for the people who got "out" . Whats your criteria for getting back in?

 

[P.S.]

i've started to take nibbles...

 

[Notmuchlonger]

If it's a typical recession than later this year should see bottom. If the de-leveraging continues (this is a solvency bust not liquidity) then ... we'll see.

Problem is I don't see where the long term growth will come from for the next decade. I believe that the global growth idea is a red herring, examining trade balances shows that it's all going here in the US, mostly due to home equity withdrawal which is over with.

I opine the money won't be as easy in the next decade as it was in the last.

You have confidence that you can pick the bottom?

 

[danm]

(Shrug ...) I picked the exact top in local housing which is when I sold my house (still renting), picked the low in bonds and the top in stocks last year.

It's odd, Bill Bernstein sings the praises of not timing, however I know one of his close friends - who also retired early from following Bill back when he was just a voice on the internet. Anyhow this friend does time, at the big turning points, such as 2001 when he sold everything and went into REIT's.

99% of the time I ... don't time. However I don't follow the passive investing mantra like it's a religion, certainly I don't think it applies to the many very knowledgeable people on this board.

You have confidence that you can pick the bottom?

 

[REWahoo]

(Shrug ...) I picked the exact top in local housing which is when I sold my house (still renting), picked the low in bonds and the top in stocks last year.

That's great. How about posting here when you identify the low and share some of the wealth? You'd make a lot of friends!

 

[poyet]

That's great. How about posting here when you identify the low and share some of the wealth? You'd make a lot of friends!

You know, nobody never ever takes advantage of your own experience and everybody needs to pay to make its own. When you see people catching falling knives and you try to deter them from doing so, they claim that for whatever reason they know what they do and they are confident that they'll make more money than anyone else... When a month or two later it's obvious that they could have made money going SHORT they just say that if they do not sell they have lost nothing etc.

I do not claim to be 100% right on the target. But most of the time when I've been (and that was more often than not, otherwise I would not have ER@45) and I've let others know of what I was doing (to foster discussion, challenge positions, try to improve myself), they usually dismissed my options for very good reasons and were doing something else.

You can't help people. Sometimes not even yourself as from time to time I keep re-doing previous, well known and well documented mistakes myself !

 

[danm]

That's great. How about posting here when you identify the low and share some of the wealth? You'd make a lot of friends!

No way, I might be wrong! I won't be responsible for your losses (or gains for that matter). The flip side is getting continually nagged by friends and relatives who know little about investing, yet think it's their job to advise me. Such as 'you are crazy to sell and not buy another house - housing ALWAYS GOES UP ...'

Of course, those nags turned to praise this last six months, but I still get blank stares when I offer my opinion.

You know, nobody never ever takes advantage of your own experience and everybody needs to pay to make its own. When you see people catching falling knives and you try to deter them from doing so, they claim that for whatever reason they know what they do and they are confident that they'll make more money than anyone else... When a month or two later it's obvious that they could have made money going SHORT they just say that if they do not sell they have lost nothing etc.

I do not claim to be 100% right on the target. But most of the time when I've been (and that was more often than not, otherwise I would not have ER@45) and I've let others know of what I was doing (to foster discussion, challenge positions, try to improve myself), they usually dismissed my options for very good reasons and were doing something else.

You can't help people. Sometimes not even yourself as from time to time I keep re-doing previous, well known and well documented mistakes myself !

Well said. I didn't try and deter my sister from making a mess of her finances by dumping everything into a declining asset (her house). Well, I did try, but as I expected I couldn't somebody who was so positively sure. One advantage I have is continual self doubt.

 

[mathjak107]

You know, nobody never ever takes advantage of your own experience and everybody needs to pay to make its own. When you see people catching falling knives and you try to deter them from doing so, they claim that for whatever reason they know what they do and they are confident that they'll make more money than anyone else... When a month or two later it's obvious that they could have made money going SHORT they just say that if they do not sell they have lost nothing etc.

I do not claim to be 100% right on the target. But most of the time when I've been (and that was more often than not, otherwise I would not have ER@45) and I've let others know of what I was doing (to foster discussion, challenge positions, try to improve myself), they usually dismissed my options for very good reasons and were doing something else.

You can't help people. Sometimes not even yourself as from time to time I keep re-doing previous, well known and well documented mistakes myself !

bought citigroup last month trying to catch the ole falling knive. got stopped out yesterday and its gone at a loss.
damn i was sure i timed it just right.

 

[Salaryman]

buy index funds for the long term. too busy enjoying life to worry about up/down of market.

 

[poyet]

buy index funds for the long term. too busy enjoying life to worry about up/down of market.

Well, I do not worry about the markets, I just enjoy the playground. The better you get the better you play the more fun you have. Sometimes you are frustrated as you did not play well the game (as for any game), but in the end it is something you like and you would miss if not in (short &/or long). At least this is the way I feel and my ER was in fact a gradual shift from a management (science) job where 10%, 20%, 30% of my time was progressively allocated to trading, managing my investments. The only thing is that I've replaced the other 70% by astronomy, skiing, etc. but I keep spending 30% of my time improving my trading software(s), my techniques, reading, surfing forums like this one to get a feel of what people do and think, etc.

As far as Citygroup is concerned the last entry was short on 28/08/2007 @ 47,26 initial stop buy @ 50,2 (pretty close) and stop buy moving down since. Position still open. I promise, I'll post here when I'll go LONG on it ! Might not be soon...

I strongly recommend to you all if you wish to time a bit your investments or trade a bit (for fun) the reading of Stan Weinstein's secrets for profiting in Bull and Bear markets (13,57$ on AMZN !!). Undoubtedly and by far the best book I've ever read on these subjects. This is mainly TA but the guy has got a clear mind and the book is well written and organized.

Again some will tell me that TA is tea leaf reading. They should better say that they are not interested in it. Quantic mechanics is also tea leaf reading for those who do not want to know what it is about ! But in the end these are just models of some reality. Would not we talk about money and would we analyse graphs of physical phenomenons (or sociological behaviours - which is the case in fine) nobody would consider TA strange. Physicists keep on processing signal, doing FFTs, and so on and so forth. It's just a way of extracting useful information from phenomenons & signals.

I'm not selling TA here, just sharing a bit of my life and of what I enjoy.

 

[2B]

Again some will tell me that TA is tea leaf reading. They should better say that they are not interested in it. Quantic mechanics is also tea leaf reading for those who do not want to know what it is about ! But in the end these are just models of some reality. Would not we talk about money and would we analyse graphs of physical phenomenons (or sociological behaviours - which is the case in fine) nobody would consider TA strange. Physicists keep on processing signal, doing FFTs, and so on and so forth. It's just a way of extracting useful information from phenomenons & signals.

I'm not selling TA here, just sharing a bit of my life and of what I enjoy.

You are denigrating tea bag reading. I'd put much more faith in it than technical analysis. I was fully committed to TA way back when. I had the charts going all over the place. Eventually I figured out that technical analysis was an excellent way of sounding knowledgeable when describing what had already happened but was totally useless in predicting anything reliably.

Technical analysis sucks in the math and science types. It feeds on our strength and a human desire to see a pattern in everything. Repeated studies have shown it to not "work" but it still sells books so it's still around.

Good luck to you. I hope you can escape befoe it causes you to lose too much money.

 

[mathjak107]

like fabian and his moving average system which failed badly

 

[chinaco]

Not me.

I am sticking with the plan!

Just normal rebalancing and long-term adjustments.

 

[limpid lizard]

Don't Know Market Timing

But I am cowardly. A few years ago, I took a paltry couple thousand and opened a Roth. I was interested in seeing how the financial consultants worked, and I shopped that couple thousand around to a few different big names. I did not see any real genius at any of them. The money eventually found its way to Vanguard.

Last spring I retired at 55. I transferred most of my 401K to Vanguard and had my lump sum pension sent there too. I stuck it all in MM and went walkabout until my head cleared.

When I spoke with the Vanguard rep, our ideas were quite similar, except he wanted me to buy into the index funds while the DOW was way over 14,000. I purchased my bond funds at that time and let the rest ride in the MM as I was too cowardly to bet my money on the DOW staying that high.

Since then, I bought here and there when the DOW dropped below 13,000. If it dropped one day and then again the next, I just bought more. I am willing to gamble below 13,000.

I was sitting at 20% MM, 50% index stock and 30% index bonds until last Friday. I bought more index stock on Friday. If the DOW continues down this week, I will buy a bit more.

My short time, ~5 years, living money remains conservatively invested at Fido in my 401K. I'm nervous, but I keep telling myself that I have played at this game for more than 20 years and have not lost my shirt yet. I finished up 2007 having done all I wanted to do and with more than I started after accounting for inflation at 3%. I would have liked to have done better, but thank my lucky stars I did this well.

So, in a sense I guess I have been market timing. I do not expect to buy at the bottom, but I abhor the idea of buying at the top. I'd just like to get everything were I want it at a reasonable price and then forget about it.

 

[Spanky]

With all the talk of a tough time for the DOW and the US economy in the next year is anyone tempted to try to time the market by selling stocks before the recession hits; or maybe you've already done it............

It has crossed my mind many times, but has decided that to stay put.

 

[poyet]

Good luck to you. I hope you can escape befoe it causes you to lose too much money.

Fortunately I've made enough money with TA to ER and keep my pile growing with fun.
Good that Sir 2B knows all what works and doesn not. It is so comforting.
BTW, thanks for providing such a timely confirmation of what I started with, you can't help people...

 

[kat]

I'm sticking with my plan -- which is kind of cool for me, because I only paid attention to having an AA plan last year!

I figured out (the Unclemick version on an envelope) how much the funds in my taxable account throw off as dividends. I know that covers my basics. I take more when needed for maintenance and travel, which happen at irregular times. I decided not to worry about the market, on the theory there will be a time to travel and do maintenance some day. And if the urge or need comes sooner, I can always sell bonds.

 

[DangerMouse]

We are not trying to time the market, however the market situation has caused us to pay more attention and we have taken the following actions:

(1) Liquified the majority of our positions in individual stocks in the US. We will hold onto our solid performers like Berkshire Hathaway, but some of the smaller positions we are going to close out.

(2) Transfer the cash to Australia. We are not certain how much long the US$ is going to hold up and as the Aussie $ has been so high it seems time to take this action.

(3) We have moved our 401k holdings to cash. We are prepared to sit on the sidelines for the next 6 months and watch how things play out.

(4) We are investing what cash we do have in Australia in the Aust equivalent of CD's - Term Deposits. It is possible to get as high as 7.75%.

Of course our situation is probably different from 99.999% of the people on this board. We are looking at 2008 as being our last year in the workforce and we will be moving to Australia to live, so in a sense all we have done is accelerate what we may have done in 12 months time.

 

[megacorp-firee]

We are not trying to time the market, however the market situation has caused us to pay more attention and we have taken the following actions:

(1) Liquified the majority of our positions in individual stocks in the US. We will hold onto our solid performers like Berkshire Hathaway, but some of the smaller positions we are going to close out.

(2) Transfer the cash to Australia. We are not certain how much long the US$ is going to hold up and as the Aussie $ has been so high it seems time to take this action.

(3) We have moved our 401k holdings to cash. We are prepared to sit on the sidelines for the next 6 months and watch how things play out.

(4) We are investing what cash we do have in Australia in the Aust equivalent of CD's - Term Deposits. It is possible to get as high as 7.75%.

Of course our situation is probably different from 99.999% of the people on this board. We are looking at 2008 as being our last year in the workforce and we will be moving to Australia to live, so in a sense all we have done is accelerate what we may have done in 12 months time.

? sounds like market timing to me. It is sacrilegious on this forum and I find I can't do it, but I thoroughly understand your logic. Even though I don't agree with it. But you do have to admit to yourself that you are attempting to time the market. not a criticism, just an observation.

 

[DangerMouse]

? sounds like market timing to me. It is sacrilegious on this forum and I find I can't do it, but I thoroughly understand your logic. Even though I don't agree with it. But you do have to admit to yourself that you are attempting to time the market. not a criticism, just an observation.

I don't think what we are doing is market timing because the cash we are now withdrawing we will not be looking to put back in at any time.

We have always operated differently to the majority on this board and that is because our situation is different from most. We don't have to worry about medical insurance because of the national health system in Australia. We will qualify for SS in the US if it is still around and if we fall on hard times we will also qualify for SS in Oz. We don't own a house anywhere in the world. Our investments are diversified in 3 currencies - US$, Aus$ and Pound Sterlings. We have always held about 44% of our portfolio in cash and it is likely to be around 50% after we liquify some of our holdings this week. We don't have any children so don't care about leaving behind pots of money and if we do we don't have to worry about estate taxes because there are none in Australia. If we end up broke and have to go into a nursing home well the good old government pay the $275k bond in Australia if you have nothing.

 

[megacorp-firee]

I don't think what we are doing is market timing because the cash we are now withdrawing we will not be looking to put back in at any time.

You should not take this as an accusation and be defensive. I know that most (me included) on this forum don't think it is a good idea.

But I do think that market timing is a definition.
It is when you attempt to pick a high point to sell and a low point to buy. I believe that is what you are doing.

(3) We have moved our 401k holdings to cash. We are prepared to sit on the sidelines for the next 6 months and watch how things play out.

 

[haha]

You should not take this as an accusation and be defensive. I know that most (me included) on this forum don't think it is a good idea.

But I do think that market timing is a definition.
It is when you attempt to pick a high point to sell and a low point to buy. I believe that is what you are doing.

What I can never get clear about is why anyone should feel that it is some sort of breach of faith to do this. Most really successful investors do it to some extent, although they may explain it somewhat differently. Whatever Warren Buffet says, watch the way he acts.

I feel that stocks should be bought like anything else. By a lot when what you want is cheap, buy much less or even sell some when it would take a miracle for cash flows to justify the price of the target company. No one ever said it should be easy. But not easy is not the same as impossible.

And what difference does it make what people on this board think? We all have different goals, different bankroll to spending ratios, different personalities, etc.

I think tax considerations are an important negative to market timing with taxable funds, but other than that, why not?

Don't you think it was easy to see in 2000 that many stocks could not possibly pay out as business investments at the prices they were selling? So all you have to do is take control of your greed, realize that your wife's sister's husband may beat your performance for a while, and you may hear about that from DW. But so what? A seller of grossly overpriced investments has to prevail eventually as long as there are any rational investors left. This appeared to be the case; and lo and behold it was the case. Going on 8 years now and the S&P has gone nowhere. And the dividend would not keep you up with even the low inflation we have had.

Ha

 

[mathjak107]

heres my definition: market timing is anytime we try to beat the markets....when we say we will accept what the markets give us each year good or bad thats investing .when we attemp to be smarter than the markets and beat them thats speculating.

making a change in your portfolio due to age, lifestyle or other non market related reasons isnt market timing.

 

[mathjak107]

as far as the s&p barley being up in 8 years , the s&p is only a segment of a balanced portfolio. if you were well balanced over the last 8 years you had to do great. im up over 100%