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Old 02-07-2008, 10:14 AM   #21
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Not to debate the majority here, but what about the other side? Technically speaking, back in October the market started giving signs of weakness, then in the week of January 4th, the market broke through the support line for the first time since July '06. Currently, the next support line is at 11,944. What we've been seeing is a correction thus far in the market, but certainly one that could be managed. It is possible to trade the market without emotion.
Wouldn't you all rather avoid 1000 pts. dips if possible?
Well, I for one, would love to be able to avoid those pesky 1000 pts. dips.

And I'll get back to you when I have the time.

(I'm tied up at present, working on Trombone Al's "How to hold your pencil".)
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Old 02-07-2008, 10:56 AM   #22
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My New Years resolution is to only be in the market when it's up.
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Old 02-07-2008, 11:10 AM   #23
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My New Years resolution is to only be in the market when it's up.
LOL! Good strategy! Let me know how that works out for ya'!
I tried long ago to day trade mutual funds figuring with the price set at the end of the day, I had a decided advantage over trading stocks. It worked for a while, but then when we had the first big continued drop off, it proved that theory flawed.
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Old 02-07-2008, 11:10 AM   #24
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Not to debate the majority here, but what about the other side? ............
If you are looking for a sparring partner on this topic, I'd take it over to the Bogleheads forum. There are people there that live for this type of discussion.
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Old 02-07-2008, 12:43 PM   #25
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LOL! OK, I'll answer just one of these. Because "hardly working" doesn't produce the same results. I don't want average results, or in the case of buying index funds, guaranteed below average results. I'd rather take control and make every effort to influence my returns. I guess if you're prone to panic, then perhaps this is the best method for you, but then why post on this site?
If I won't even change the oil in my car, how can I justify trying to go the simplest method with my money?
Nobody at Vanguard buys the S&P 500 Index fund, silly............

Put another way, in Art G "speak", why is ANYONE willing to invest in Vanguard, since their managers don't really "manage"!! Their expense ratios SHOULD be super low, since they "couch potato" things themselves.........

Is that right, Art?
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Old 02-07-2008, 12:45 PM   #26
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Well, I for one, would love to be able to avoid those pesky 1000 pts. dips.
I think 90 day Treasuries and CDs would work quite well for you...........
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Old 02-07-2008, 01:01 PM   #27
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I think 90 day Treasuries and CDs would work quite well for you...........
But what if I want no downside with unbounded upside potential?
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Old 02-07-2008, 01:11 PM   #28
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But what if I want no downside with unbounded upside potential?
Every time I answer this question by stating, "review variable annuities", I realize I lose bonus bucks here, but in honesty, that's your answer.
And yes there is a cost to it, but in an uneasy market, what's it worth to you?
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Old 02-07-2008, 01:14 PM   #29
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Nobody at Vanguard buys the S&P 500 Index fund, silly............

Put another way, in Art G "speak", why is ANYONE willing to invest in Vanguard, since their managers don't really "manage"!! Their expense ratios SHOULD be super low, since they "couch potato" things themselves.........

Is that right, Art?

Whoa now! I'm making enough enemies without disparaging Vanguard, but well......yeah, I guess so.
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Old 02-07-2008, 01:25 PM   #30
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Originally Posted by Art G View Post
Not to debate the majority here, but what about the other side? Technically speaking, back in October the market started giving signs of weakness, then in the week of January 4th, the market broke through the support line for the first time since July '06. Currently, the next support line is at 11,944. What we've been seeing is a correction thus far in the market, but certainly one that could be managed. It is possible to trade the market without emotion.
Wouldn't you all rather avoid 1000 pts. dips if possible?
Just one question. What is a "support line" and how is it computed? Well, I guess that's technically two questions. So double the invoice.
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Old 02-07-2008, 01:28 PM   #31
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Not to debate the majority here, but what about the other side? Technically speaking, back in October the market started giving signs of weakness, ....

Wouldn't you all rather avoid 1000 pts. dips if possible?
All the TA I've seen in the past seemed like magic mojo stuff to me. I've never seen anything that indicates it works. Part of the problem seems to be that no one can define what TA is. If you ask 10 chartists what this chart is saying, you get 10 different answers. Most of the answers tend to include, 'this indicates that we could be going up near term, but possibly after a down cycle, and we can't eliminate the possibility for a sideways move at this time - unless new information comes to light'.

But it may be ignorance on my part. I'd be very interested in seeing some concrete evidence of a technique that works. The best evidence would be from a mutual fund manager that uses a TA strategy that consistently beats the risk-equivalent index in up and down markets.

If you can provide that, please start a new thread, and PM me in case I miss it please - I would be interested.

-ERD50
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Old 02-07-2008, 01:30 PM   #32
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Every time I answer this question by stating, "review variable annuities", I realize I lose bonus bucks here, but in honesty, that's your answer.
And yes there is a cost to it, but in an uneasy market, what's it worth to you?
REWahoo and youbet will be along shortly to take you to the woodshed. How do you like hickory switches??
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Old 02-07-2008, 01:32 PM   #33
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All the TA I've seen in the past seemed like magic mojo stuff to me. I've never seen anything that indicates it works. Part of the problem seems to be that no one can define what TA is. If you ask 10 chartists what this chart is saying, you get 10 different answers. Most of the answers tend to include, 'this indicates that we could be going up near term, but possibly after a down cycle, and we can't eliminate the possibility for a sideways move at this time - unless new information comes to light'.

But it may be ignorance on my part. I'd be very interested in seeing some concrete evidence of a technique that works. The best evidence would be from a mutual fund manager that uses a TA strategy that consistently beats the risk-equivalent index in up and down markets.

If you can provide that, please start a new thread, and PM me in case I miss it please - I would be interested.
-ERD50
I used to work with a TA who was also a CFA. He charged 1% a year for his portfolios. He went to cash in mid 2000 and stayed there for quite awhile. Once in awhile clients would ask why they are paying 1% NOT to be in the market..........
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Old 02-07-2008, 01:37 PM   #34
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If you are looking for a sparring partner on this topic, I'd take it over to the Bogleheads forum. There are people there that live for this type of discussion.
Now that's funny............
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Old 02-07-2008, 01:46 PM   #35
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All the TA I've seen in the past seemed like magic mojo stuff to me. I've never seen anything that indicates it works. Part of the problem seems to be that no one can define what TA is. If you ask 10 chartists what this chart is saying, you get 10 different answers. Most of the answers tend to include, 'this indicates that we could be going up near term, but possibly after a down cycle, and we can't eliminate the possibility for a sideways move at this time - unless new information comes to light'.

But it may be ignorance on my part. I'd be very interested in seeing some concrete evidence of a technique that works. The best evidence would be from a mutual fund manager that uses a TA strategy that consistently beats the risk-equivalent index in up and down markets.

If you can provide that, please start a new thread, and PM me in case I miss it please - I would be interested.

-ERD50
I guess I'll attach to this post since both were somewhat similar questions, but yours more complex.
It's true that many "chartists" try to use absolutely anything and everything to draw some sort of channel or trendline. In my opinion, those using short term trend lines, get short term results (which I find pretty much useless being that I'm not a day trader).
I use the 50 and 200 day moving averages (take the last 50 or 200 days of trading, look at their closing price, and divide by either 50 or 200), which are pretty simple to get in almost any program. Now, I can't say whether the reason they work is because it's a purely formed average line, or else it works because other chartists are also watching the same line, but I've been using it now for over 15 years, and it has worked out pretty well for me.
If you'd like to see what a chart looks like, merely bring up a three to five year chart, put in the criteria of 50 and 200 days, and you should see that currently we are trading between those two lines, which indicate to me, that the market hasn't currently picked a direction (I know that's useless info right now). However, once the index moves above the support line or through that current resistance line, I believe you should know whether or not you want to be holding cash, or getting invested.
I admit it's not a perfect system, but truly, if you want to see if it works, just pull up a chart right now, enter DJIA or COMP or any symbol for that matter and see if they don't at some points, hold those lines (either above or below them), and when they break through, they tend to continue breaking through.
In any case, for me it beats the heck out of waiting for someone to report how good their earnings were in the last quarter, and seeing that three weeks earlier there was very heavy volume in the stock.
BTW, all just my own opinion and research.
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Old 02-07-2008, 02:23 PM   #36
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ArtG - I've seen the 50 and 200 DMA lines, I think even yahoo shows those.

Any documented history that they work? I'm guessing 'NO' since you didn't give any. Seems like a pretty simple thing, any old computer could run a mutual fund and beat the market if it worked. So where are they?

-ERD50
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Old 02-07-2008, 02:44 PM   #37
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ArtG - I've seen the 50 and 200 DMA lines, I think even yahoo shows those.

Any documented history that they work? I'm guessing 'NO' since you didn't give any. Seems like a pretty simple thing, any old computer could run a mutual fund and beat the market if it worked. So where are they?

-ERD50
ERD, did you run the chart I suggested? Or any stock? Each chart is its own documented history. Of course they work! I've traded based on them for years.
You want to see something that doesn't work? Check out a stock like Bauch and Lomb. The fundamentals sounded great, and yet the stock plummeted. Then, ooops...a lawsuit regarding the use of their product. In my opinion, fundamental investing is like playing football with an eye patch and the other team has your playbook.
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Old 02-07-2008, 03:00 PM   #38
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fundamental investing is like playing football with an eye patch and the other team has your playbook.
Well, Peter Lynch and Warren Buffett have done "ok" with fundamental investing........
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Old 02-07-2008, 03:03 PM   #39
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Well, Peter Lynch and Warren Buffett have done "ok" with fundamental investing........
Sure, they both have the playbook.
Warren Buffet knows well in advance what's gonna happen, and often enough, he causes it to happen. I guess if I had a couple billion to invest, I could take off my eye patch.
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Old 02-07-2008, 03:07 PM   #40
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Sure, they both have the playbook.
Warren Buffet knows well in advance what's gonna happen, and often enough, he causes it to happen. I guess if I had a couple billion to invest, I could take off my eye patch.
Oh..........I see. You meant that the individual investor doesn't have the playbook..........

Actually Warren Buffett buys stuff, and THEN it leaks out that Warren is buying (intentionally) and then it causes the "Buffett effect" where crazy buying happens, and he gets the run-up just staying put.........brilliant!!!!
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