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Simple game about market timing
Old 08-26-2015, 11:15 AM   #1
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Simple game about market timing

Pretty neat. Can you sell and buy at the right time?

This game will show you just how foolish it is to sell stocks right now - Quartz

FWIW, I totally failed.
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Old 08-26-2015, 01:00 PM   #2
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I got lucky.

Quote:
The $10,000 you invested turned into $24,498. If you hadn't made any trades you would have made $1,494 less—leaving an ending balance of $23,004. You took a risk and it worked out, but there's no guarantee you could do it again.
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Old 08-26-2015, 01:40 PM   #3
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Completely stupid game. You get like 2 buys and 2 sells then it makes you ride it out?

What trader only trades 4 times in a 10 year period

Also I know high frequency trading is not possible by a human, I think I could do better than the 20 day delay in trade execution from when my eye sees the chart to when it registers my click of buy or sell.

Try again.
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Old 08-26-2015, 01:47 PM   #4
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Market timing is tough, no questions about it. But in real life, traders have other cues to consider: P/E, GDP growth, unemployment and inflation numbers, interest rate, Washington policy, oil price, political situations, etc... And last but not least, the "Wheee" signal.
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Old 08-26-2015, 02:03 PM   #5
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Come to think of it, if the game showed the bond return alongside the stock price, that would be all most buy-hold people need and use to rebalance.
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Old 08-26-2015, 02:22 PM   #6
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I have a neighbor that is a day trader. I usually see him early mornings riding his bike. I haven't seen him at all this week. I hope he's ok.
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Old 08-26-2015, 02:41 PM   #7
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Another good point about the game. When you execute your one buy that you are allowed in a 10 year period, your money just sits there and doesn't grow at all. Some of the 10 year periods they use, bonds were paying 10% and one year CDs were paying 5 to 7%
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Old 08-26-2015, 02:50 PM   #8
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Right. This is sensible because there's no exogenous variables that might impact your buy/sell decision.
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Old 08-26-2015, 09:59 PM   #9
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Quote:
Originally Posted by Ronstar View Post
I have a neighbor that is a day trader. I usually see him early mornings riding his bike. I haven't seen him at all this week. I hope he's ok.

lol, me too
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Old 08-26-2015, 10:07 PM   #10
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I "won" by never executing any trades. But I think I got a lucky decade. Money tripled just sitting there.
Fun game though!
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Old 08-26-2015, 10:28 PM   #11
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Like I said, most of the time periods used in the game, 10 year treasuries were paying 6% or even more. Thus if you immediately hit sell and the game let you put the 10,000 into treasury bonds, you would end up with at least $18,000, which beats the market in quite a few of the cases. The author just arranged the game to try and prove a point...the point may be true but his method was false.
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Old 08-26-2015, 10:48 PM   #12
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What you just saw is exactly how the S&P 500 performed from the week of Mar. 14, 2003 to the week of Feb. 22, 2013.
You beat the market!

The $10,000 you invested turned into $29,847. If you hadn't made any trades you would have made $11,659 less—leaving an ending balance of $18,189. You took a risk and it worked out, but there's no guarantee you could do it again. Why don't you try?




Based on playing this game I now think I can properly time the market...look how much I made compared to buy and hold.
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Old 08-27-2015, 02:08 AM   #13
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I won 3 out of 5 times.
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Old 08-27-2015, 05:35 AM   #14
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In those other two out of five, how badly did you lose?
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Old 08-27-2015, 07:40 AM   #15
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I don't remember I know 1 win was big,1 tiny and 1 lost was big.
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Old 08-27-2015, 09:01 AM   #16
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I find this game to be quite interesting because, even though it purports to teach a lesson in how foolish it is to time the market, it actually appears to lead to exactly the opposite conclusion. Two serious weaknesses are to allow only a single sell/buy per iteration and to not carry one's cumulative gain or loss forward to the next iteration. I tried the game repeatedly and seemed to beat the market more often than not, but some of my losses were by large margins - to win each iteration it's mandatory to sit on the sidelines after selling, hoping for a large enough correction to allow one to reinvest at a profit. If no such correction happens during that iteration, you're doomed to suffer a potentially huge loss, but you can always try again with the game not remembering the magnitude of previous losses.
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Old 08-27-2015, 12:05 PM   #17
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Playing a bit more, I've gotten some good results as well.

I agree with the criticisms that this isn't a full simulation etc, but I still think it's neat. It's so tempting to see trends in a graph, and a few rounds of this game really drives home that anything can happen (but the overall trend is up).
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Got lucky
Old 08-27-2015, 05:51 PM   #18
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Got lucky

I had $175k sitting in Vanguard money market fund waiting from our consolidation to Vanguard efforts. Timing of this was perfect to watch the sell off and wait for a sign of a bottoming out.

I guessed right (this time) and bought on the right day.

Woo Hoo!
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Old 08-28-2015, 12:59 PM   #19
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Congrats, Happily!
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