Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 02-25-2015, 01:25 PM   #101
Moderator Emeritus
 
Join Date: Oct 2007
Posts: 4,929
Quote:
Originally Posted by ejman View Post
Nothing like a good dose of Farrell whenever I start feeling very optimistic about the future. Stock-market crash of 2016: The countdown begins - MarketWatch
Uh huh.

2014: https://secure.marketwatch.com/story...ing-2014-02-19

2013: https://secure.marketwatch.com/story...013-2013-01-01

2012: https://secure.marketwatch.com/story...ash-2011-08-23

2011: https://secure.marketwatch.com/story...mas-2011-02-22

2010: https://secure.marketwatch.com/story...now-2010-05-25

Oddly, there's no forecast I can find of a crash in 2009...
__________________

__________________
M Paquette is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-25-2015, 01:40 PM   #102
Thinks s/he gets paid by the post
nash031's Avatar
 
Join Date: Jun 2013
Location: Coronado
Posts: 1,485
Quote:
Originally Posted by W2R View Post

Honestly, even if the market duplicated the 2008-2009 crash tomorrow, I think many of us would still be sitting pretty after the gains of the past 5-6 years.
If the market replicated the % drop of 08-09, it'd still be up almost 50% from the market low in 09. Certainly not good gains over the course of that time compared to what we have now, but I think this suggestion points to the issue that many have when understanding the stock market, and that is basic math. People think a "crash" tomorrow means a return to S&P 800. It might, but it's more likely to mean a return to 1700 or 1800 or 1600.

I'm reminded of the person on this board who told me he didn't believe we'd see S&P 2000 before the year 2020 in 2013. At that point, the S&P would've had to average something like 2% growth to get there, but that point seemed lost. Numbers, in this index game, are relative. Absolutes mean little, as is the case with the repeated pointing out of "all-time highs!"
__________________

__________________
"So we beat to our own drummer in the sun;
We ask for nobody's permission to run.
I just wanna live in a world like that;
Now I'm gonna live in a world like that!" - World Like That, O.A.R.
nash031 is offline   Reply With Quote
Old 02-25-2015, 02:03 PM   #103
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 1,903
Funny! A broken clock...
__________________
ejman is online now   Reply With Quote
Old 02-25-2015, 03:42 PM   #104
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,446
Being a scaredy cat, as our portfolio makes new highs, I occasionally update my "bad bear market" model where I put in the worst annual drop that we saw in 2008.

Our portfolio is slightly more conservative now, and our bonds a bit higher quality overall.

But yes, we've come so far from the beginning of 2009 that a repeat would probably leave us quite a bit better off than we were at the end of 2008. And a more "normal" bear market of equities 20 to 25% down with non-treasury bonds behaving better than they did in 2008 would mean backtracking a couple of year of gains maybe, but nothing like the 2008 bear.

Furiously knocking on wood!!!!
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Old 02-25-2015, 03:54 PM   #105
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,387
Quote:
Originally Posted by W2R View Post
Already posted it, less than 2 weeks ago! It didn't "take", though. And the market has soared dramatically since then. ....
Yes folks, the ol' girl is losing her touch....
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now   Reply With Quote
Old 02-26-2015, 08:32 AM   #106
Thinks s/he gets paid by the post
target2019's Avatar
 
Join Date: Dec 2008
Posts: 3,705
In order to know where we're going, we must know where we've been:

Callan Periodic Table of Investments

The 2014 version can be found at that link. Should not take much to move the colored squares for 2015.

My picks:
MSCI EAFE
MSCI EM
S&P 500 Value
Russell 2000 Growth
S&P 500
Russell 2000
Russell 2000 Value
Barclays Agg
S&P 500 Growth
Barclays Corp High Yield
__________________
target2019 is online now   Reply With Quote
Old 02-27-2015, 04:04 PM   #107
Recycles dryer sheets
Theseus's Avatar
 
Join Date: Aug 2013
Posts: 484
Is this a sell signal? New book being hawked as Marketwatch click-bait
Attached Images
File Type: png dummies.png (264.4 KB, 9 views)
__________________
Theseus is offline   Reply With Quote
Old 02-27-2015, 04:29 PM   #108
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,446
My god! I don't think I've read a worse, senseless, repetitive ramble!
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Old 02-27-2015, 04:45 PM   #109
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,065
Anyone who reads one of his articles has my sympathy. Anyone who reads more than one of his articles has gone beyond the need for sympathy.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 02-27-2015, 05:03 PM   #110
Moderator Emeritus
 
Join Date: Oct 2007
Posts: 4,929
Quote:
Originally Posted by REWahoo View Post
Anyone who reads one of his articles has my sympathy. Anyone who reads more than one of his articles has gone beyond the need for sympathy.
Yup.

Read any ONE article. For any other year, just mentally 'find and replace' the year, and the generic disaster Farell is forecasting. They're all interchangeable.
__________________
M Paquette is offline   Reply With Quote
Old 02-27-2015, 05:33 PM   #111
Thinks s/he gets paid by the post
 
Join Date: Jul 2003
Location: Pasadena CA
Posts: 2,694
I like the Callan table for the visual image of changing patterns of investment returns. But there are too many categories for my investment purposes, how about only the S&P500, Russell 2000, MSCI EAFE, MSCI EM and Barclays Agg bond fund?

Quote:
Originally Posted by target2019 View Post
In order to know where we're going, we must know where we've been:

Callan Periodic Table of Investments

The 2014 version can be found at that link. Should not take much to move the colored squares for 2015.

My picks:
MSCI EAFE
MSCI EM
S&P 500 Value
Russell 2000 Growth
S&P 500
Russell 2000
Russell 2000 Value
Barclays Agg
S&P 500 Growth
Barclays Corp High Yield
__________________
T.S. Eliot:
Old men ought to be explorers
yakers is offline   Reply With Quote
Old 02-27-2015, 05:56 PM   #112
Thinks s/he gets paid by the post
photoguy's Avatar
 
Join Date: Jun 2010
Posts: 2,301
Quote:
Originally Posted by Lsbcal View Post
It is very difficult in my opinion to get a model that backtests well over say the 1920's to the present. The model should give better or equal results then buy/hold over periods of say 10 years as well as the full 90 years, have very few whipsaws, and be easy to implement. Also to be complete the defects in the model should be very clearly understood. For instance, the model might have missed some equity declines not clearly linked to yield curve inversion, or the model might have missed most "corrections" of not worse then -10%.
If by backtesting you mean resubstitution error isn't it trivial? Just throw a bunch of random predictors into a regression, make sure you have roughly the same number of predictors as historical data points and boom you have a perfect model on historical data that is totally useless for the future.

I admit it gets harder if you enforce other constraints like parsimony, or that each predictor variable has a logical role to play, or you do backtesting in different manner (with holdout sets/cross-validation etc). But it's not impossible and actually quite likely when you consider how many people are trying to develop their own prediction scheme.
__________________
photoguy is offline   Reply With Quote
Old 02-27-2015, 07:07 PM   #113
Thinks s/he gets paid by the post
target2019's Avatar
 
Join Date: Dec 2008
Posts: 3,705
Quote:
Originally Posted by yakers View Post
I like the Callan table for the visual image of changing patterns of investment returns. But there are too many categories for my investment purposes, how about only the S&P500, Russell 2000, MSCI EAFE, MSCI EM and Barclays Agg bond fund?
That is pretty much how I roll. Gotta admit, 10 rows fills out the chart better than 5!
__________________
target2019 is online now   Reply With Quote
Old 02-28-2015, 05:50 AM   #114
Full time employment: Posting here.
CaliforniaMan's Avatar
 
Join Date: Dec 2013
Location: San Diego
Posts: 846
Quote:
Originally Posted by photoguy View Post
If by backtesting you mean resubstitution error isn't it trivial? Just throw a bunch of random predictors into a regression, make sure you have roughly the same number of predictors as historical data points and boom you have a perfect model on historical data that is totally useless for the future.

I admit it gets harder if you enforce other constraints like parsimony, or that each predictor variable has a logical role to play, or you do backtesting in different manner (with holdout sets/cross-validation etc). But it's not impossible and actually quite likely when you consider how many people are trying to develop their own prediction scheme.
+1 Excellent points! Get the Principal Components of the random variables, and you will need fewer variables to get nearly perfect results. Back off the number of variables until just good enough. We should be able to build a story of how each component has some logic. After all it is something we "want" to believe.
__________________
Merrily, merrily, merrily, merrily,
Life is but a dream.
CaliforniaMan is offline   Reply With Quote
Old 02-28-2015, 06:09 AM   #115
Full time employment: Posting here.
CaliforniaMan's Avatar
 
Join Date: Dec 2013
Location: San Diego
Posts: 846
While we are on the subject of "random" variables I have to tell this true story. Many years ago, decades actually, I had an associate, a researcher who had won a number of NSF grants and did great work in his field, had many papers cited, used statistics, and did some seminal work in his field.

He got into speculating in commodities and somehow charting, and really got into thinking he could predict the future movements based on trend analysis. So I played a little game with him. I got out a coin and started flipping. Heads the market went up a point, and tails it went down. After I made the chart, I told him I had this commodity that I wanted to know if he thought was a good investment or not. I told him I would not tell him what it was so he would be unbiased in his forecast.

He told me his predictions, of which he was very certain.
Then I sprang the truth. It was just coin flips.

Now HERE is the interesting part.
He was so into charting and thinking about patterns and trends, that he still said he was right about the forecast. I said, it is just coin tosses! You can predict the future of my coin toss? He just couldn't believe that he could not predict it, so much was his desire to believe. And he didn't want to talk about it any more.

Later of course he lost money and quietly shelved the idea of commodity trading. But seeing an eminently successful, logical and educated person fool himself into thinking he could predict the market was very instructive to me. Wanting to believe can be so powerful it simply overwhelms logic and common sense, and that none of us are immune to this.
__________________
Merrily, merrily, merrily, merrily,
Life is but a dream.
CaliforniaMan is offline   Reply With Quote
Old 02-28-2015, 09:58 AM   #116
Thinks s/he gets paid by the post
photoguy's Avatar
 
Join Date: Jun 2010
Posts: 2,301
Quote:
Originally Posted by CaliforniaMan View Post
He got into speculating in commodities and somehow charting, and really got into thinking he could predict the future movements based on trend analysis. So I played a little game with him. I got out a coin and started flipping. Heads the market went up a point, and tails it went down. After I made the chart, I told him I had this commodity that I wanted to know if he thought was a good investment or not. I told him I would not tell him what it was so he would be unbiased in his forecast.
I think this type of experiment is one of the most damning pieces of evidence against technical analysis. And as your experience shows, even very smart folks can get caught up in their own predictions and be fooled by randomness.
__________________
photoguy is offline   Reply With Quote
Old 02-28-2015, 10:05 AM   #117
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,387
Quote:
Originally Posted by audreyh1 View Post
My god! I don't think I've read a worse, senseless, repetitive ramble!
While consistency is a virtue, being consistently WRONG is not.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now   Reply With Quote
Old 02-28-2015, 10:32 AM   #118
Thinks s/he gets paid by the post
target2019's Avatar
 
Join Date: Dec 2008
Posts: 3,705
Here is a link to his prediction of a crash in 2016.

Stock-market crash of 2016: The countdown begins - MarketWatch

"all bulls drop into bears eventually"

True dat.
__________________
target2019 is online now   Reply With Quote
Old 02-28-2015, 11:03 AM   #119
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,369
Quote:
Originally Posted by target2019 View Post
Here is a link to his prediction of a crash in 2016.

Stock-market crash of 2016: The countdown begins - MarketWatch

"all bulls drop into bears eventually"

True dat.

I read that article yesterday. It may be the worst financial article I have ever read. I don't have to agree with a persons opinion, but at least give me one point to substantiate the opinion.
A crazy nut holding a "The World is Coming to an End" sign by the corner of a street has as much facts to support his belief as this lazy writer had.


Sent from my iPad using Tapatalk
__________________
Mulligan is online now   Reply With Quote
Old 02-28-2015, 11:05 AM   #120
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 5,672
Quote:
Originally Posted by photoguy View Post
If by backtesting you mean resubstitution error isn't it trivial? Just throw a bunch of random predictors into a regression, make sure you have roughly the same number of predictors as historical data points and boom you have a perfect model on historical data that is totally useless for the future.

I admit it gets harder if you enforce other constraints like parsimony, or that each predictor variable has a logical role to play, or you do backtesting in different manner (with holdout sets/cross-validation etc). But it's not impossible and actually quite likely when you consider how many people are trying to develop their own prediction scheme.
Well lets back off just a moment. First, let's agree to have a nice friendly discussion. I'm not in teaching mode here and am very willing to learn a new trick (old dog here). I'm not trying to change people's investing approach as buy-hold is a great choice and I agree that risk aversion should be covered in the AA.

Just referring to stuff I've explored and have no plans to disseminate other than what I've mentioned. Below I've tried to somewhat address the items (above) in blue but I don't know what the items above in magenta refer to.

Second, there is no predicting going on by me. There is only a potential model triggered movement from equities to bonds based on a trend which may or may not turn out to continue forward. This is an important point I think. If the backtest carries forward then one is hoping that 90 years of historical testing will carry forward to at least the next data point (the next month). There is always a point where trends end.

If the model is a decent one, there are very few losses from sell to buy back over some months versus buy-hold. All moving average approaches I've seen do not pass this test. Also if the model is a decent one, there are very few sell-buy pairs. Maybe one every 4 or 5 years.

There is definitely always a risk that history does not prepare us for a much rougher ride. Buy-hold also has this issue. After all, in an alternate history we would be still going downhill from March 2009 and we'd all be scared and questioning our investment approaches.

So again, I do not see this as a "prediction scheme".

On what I think is a more minor point, what I've used is primary data like:
1) SP500 + dividends, French-Fama data too
2) Treasury data on yields (3 month, 5 year, 10 year)
3) PE10

So I have not used a humongous number of weird data that would not pass the smell test. Also the model is not based strictly on price movement of the SP500 (charting).
__________________

__________________
Lsbcal is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Stock market presidential cycle REWahoo FIRE and Money 5 08-09-2014 10:38 AM
Hmm, stock market or Money Market/CD? Moneycoming Stock Picking and Market Strategy 4 08-14-2007 07:41 PM
Stock Market -- What stage of the business cycle and what is in demand? chinaco FIRE and Money 5 05-19-2007 08:17 PM
TSP introduces Life Cycle Funds daystar FIRE and Money 13 08-04-2005 07:34 PM
Your favorite "low life cycle cost" brands BilltSuperTester FIRE and Money 67 02-21-2005 12:52 PM

 

 
All times are GMT -6. The time now is 06:27 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.