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Markets tumble again
Old 11-01-2011, 07:45 AM   #1
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Markets tumble again

Looks like my move to cash at the end of last Thursday is going to pay off again. My cash position will be put to work in chunks again as we pull back 10% from recient highs.

This will be the 3rd time I have cycled 40% of my porfolio from cash to stock and back again. selling on the rips and buying on the dips seems to work nicely if you are willing to sit on cash or cash equivilent investments for long periods of time. Just make sure you don't find yourself chasing stocks feeling like you are missing out. If you miss the run there will be another oportunity while Greece is still a country.

I think there is some serious hype still goimg on that makes the market swing wildly.
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Old 11-01-2011, 05:15 PM   #2
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Sounds like market timing to me.
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Old 11-01-2011, 05:21 PM   #3
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Originally Posted by RetirementColdHardTruth View Post
Looks like my move to cash at the end of last Thursday is going to pay off again. My cash position will be put to work in chunks again as we pull back 10% from recient highs.

This will be the 3rd time I have cycled 40% of my porfolio from cash to stock and back again. selling on the rips and buying on the dips seems to work nicely if you are willing to sit on cash or cash equivilent investments for long periods of time. Just make sure you don't find yourself chasing stocks feeling like you are missing out. If you miss the run there will be another oportunity while Greece is still a country.

I think there is some serious hype still goimg on that makes the market swing wildly.
To quote the infamous CFB, "Yep, it works...until it doesn't."
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Old 11-01-2011, 05:27 PM   #4
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To quote the infamous CFB, "Yep, it works...until it doesn't."
At least CNBC has someone to watch their advertisements.
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Old 11-01-2011, 06:31 PM   #5
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As they'd say while I was still w*rking with computers, "now you know enough to be dangerous"

Or, if you go to a casino and hit on the first three slot machines, that's probably the worst thing that can happen...as now you're hooked!
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Old 11-01-2011, 08:40 PM   #6
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Looks like my move to cash at the end of last Thursday is going to pay off again. My cash position will be put to work in chunks again as we pull back 10% from recient highs.

This will be the 3rd time I have cycled 40% of my porfolio from cash to stock and back again. selling on the rips and buying on the dips seems to work nicely if you are willing to sit on cash or cash equivilent investments for long periods of time. Just make sure you don't find yourself chasing stocks feeling like you are missing out. If you miss the run there will be another oportunity while Greece is still a country.

I think there is some serious hype still goimg on that makes the market swing wildly.
Let us know when to hit the buy button.
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Old 11-01-2011, 09:30 PM   #7
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Let us know when to hit the buy button.
Don't forget the sell button/signal also.
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Old 11-01-2011, 10:06 PM   #8
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I am wondering if Merkel might put Germany's contribution to the Greek bail-out up to a vote of the Germans! Anyone care to guess the results of that? I imagine the market will bounce up and down until they finally work this thing out or it goes away Either way, holders of Greek bonds will have their lunch eaten. We stock market owners will have to hand on. That is what risk and reward is about.
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Old 11-01-2011, 10:40 PM   #9
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It may not even get to that point. Isn't there going to be a greek referendum? From what I have been hearing, the Greeks may just vote to not take the bailout.
Seems utterly bizzare. I mean, yes the austerity measures are going to hurt, but the alternative is much worse, isn't it?
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Old 11-01-2011, 11:28 PM   #10
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Seems utterly bizzare. I mean, yes the austerity measures are going to hurt, but the alternative is much worse, isn't it?
The Greek public is PO'ed about the austerity measures already put in place and the promise of more if they accept the bailout. It's widely perceived as punishment by foreigners, and President Papandreou is taking tons of heat from the public and opposition parties for "going along" with these pushy foreigners. IMO, it's a win-win for Papandreou: If the referendum passes, he's got political cover for all the pain to come. If it fails, maybe his government falls and he looses his job, which is probably the most thankless, no-win job in the world today.
If the referendum occurs (it's far from certain) and it doesn't pass, the Greek public will have spurned this gift from the EU, will have to adopt the austerity measures anyway (or inflate their resurrected drachma currency so that the effect is the same), and will have assured their slide into bleak economic condition for a long time. But maybe it's better to have the market administer the beating than have the know-it-alls in Brussels, Paris, and Berlin do the deed.
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Old 11-02-2011, 01:38 AM   #11
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It may have been a smart move by Papandreou from a political perspective however, regardless of the outcome of the vote, you would assume that most Greeks and holders of Greek assets would follow the Earl of Elgin's example and remove everything they can from Greece (to the extent that they haven't already done so) to protect themselves from the now increased possibility of Greece exiting the EU, abandoning the Euro and reverting to the Drachma.

Greece's financial pain is likely to get worse as a result of this move.

Then there's the not insignificant issue of irritating those Euro members who voted to give Greece a bail out.
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Old 11-02-2011, 04:35 AM   #12
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At least the Germans and the French - the two European heavyweights - speak with one voice now. I cannot imagine what the situation would be like if Sarkozy and Merkel could not agree.
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Then there's the not insignificant issue of irritating those Euro members who voted to give Greece a bail out.
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Old 11-02-2011, 06:52 AM   #13
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Sounds like market timing to me.
Nothing wrong with taking profits. But, I would like to hear of the screw ups too. I doubt the poster is 100% perfect on his strategy. If so, he needs to write a book.
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Old 11-02-2011, 10:25 AM   #14
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Nothing wrong with taking profits. But, I would like to hear of the screw ups too. I doubt the poster is 100% perfect on his strategy. If so, he needs to write a book.
I've been doing the same, selling a buttload on Thursday, buying half of that back end of day yesterday. I call it locking in profits, not timing. Taking risk off the table is understandable after a 14% run up.
I personally sold CMG, PNRA & a couple big positions in Vanguard MF's. Bought back CMG & Vanguard fund yesterday. NLY in my IRA today at $16.25...

My mistakes, holding on to PBI and buying NFLX at $133 after the first rout. I took a loss at $119 stop loss.

This works until there is a breakout of the current range of trade. I'll likely sell off on major upswings and then wait for the pullback that never happens. In the meantime, I'm up 15% against the s&p this year.
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Old 11-02-2011, 10:54 AM   #15
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Nothing wrong with taking profits. But, I would like to hear of the screw ups too. I doubt the poster is 100% perfect on his strategy. If so, he needs to write a book.
Well if there is any strategy, including buy and hold, out there that is 100% perfect all the time, I would like to know about it.
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Old 11-02-2011, 11:08 AM   #16
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But maybe it's better to have the market administer the beating than have the know-it-alls in Brussels, Paris, and Berlin do the deed.

I think so.

If the Greeks choose their own poison and wind up in tough economic times for years, at least they will have done it to themselves and perhaps will be more motivated to pull themselves up by the bootstraps to improve things for the next generation.

If it's a EU bailout, all future pain will always be seen as something that was done to them by outsiders and needs to be corrected by outsiders with additional gifts. IE., they have an entitlement to their current lifestyle and if they can't afford it themselves, then outsiders need to make up the difference again and again.
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Old 11-02-2011, 12:19 PM   #17
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If the Greeks choose their own poison and wind up in tough economic times for years, at least they will have done it to themselves and perhaps will be more motivated to pull themselves up by the bootstraps to imporove things for the next generation.
What's interesting to me is all the shock and outrage elicited by the idea of the Greeks voting on this. The folks running the EU have gotten so used to hatching deals among the leaders and then quickly signing them that the introduction of this messy, antiquated, slow idea of the people having an input has caused quite a stir. Seems healthy to me, politicians having to build public support for ideas before they are enacted, though I don't think it will end well for Greece.

This referendum tactic is exactly the kind of thing I'd expect from Italy's Berlusconi. He's a desperate man. I'll bet he'll watch what happens in Greece (and how FR and GE handle the issue) very closely.
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Old 11-02-2011, 12:41 PM   #18
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Martin Wolfe had an article in FT where he put forth that Germany needs its debtors, as much as Italy, Greece, etc. need German goods and loans. Very similar to ideas about China needing the American consumer/debtor as much as the American needs China.

True enough on the face of it, as without what amounts to consumption financing by Germany who would buy all their products? In a sense, Italy and Ireland and Greece and Portugal are saving Germany from 20% unemployment and political chaos.

Germany is a modern industrial state, a very powerful one, yet it operates a mercantilist economy.

Ha
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Old 11-02-2011, 12:47 PM   #19
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This referendum tactic is exactly the kind of thing I'd expect from Italy's Berlusconi. He's a desperate man. I'll bet he'll watch what happens in Greece (and how FR and GE handle the issue) very closely.
We're looking at a referendum here in Illinois. It concerns whether to default on the seemingly insurmountable debt the state has run up and then sell the whole thing to the EU. I mean the whole thing. The zillions of acres of productive farm land, the access to fresh water from the Great Lakes, the worlds most corrupt political system......... everything. Then Washington could make a counter offer if they're interested.

One way or another, we're gona need a BIG bailout! These Greek folks are small potatoes.
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Old 11-02-2011, 12:51 PM   #20
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Martin Wolfe had an article in FT where he put forth that Germany needs its debtors, as much as Italy, Greece, etc. need German goods and loans. Very similar to ideas about China needing the American consumer/debtor as much as the American needs China.

True enough on the face of it, as without what amounts to consumption financing by Germany who would buy all their products? In a sense, Italy and Ireland and Greece and Portugal are saving Germany from 20% unemployment and political chaos.

Germany is a modern industrial state, a very powerful one, yet it operates a mercantilist economy.

Ha
This is so very true. Michael Pettis has written a number of blog and newsletter entries on this. See here, here and here. Global trade imbalances are just as big a problem for the exporters as they are for deficit countries, and they are not getting any better.
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