Timing the market

[cute fuzzy bunny]

I've "market timed" quite successfully but not through any metrics or a 'system'.

When the nasdaq hit 4000 in the late 90's/early 2000's, I decided to get out. 4000 was a stupid price by any measure, and it was built on the backs of companies without profits or even legitimate business plans. I actually decided to wait until after january 1st to defer the tax his and it went to 5000, and I gladly cashed out then.

No early retirement if I hadn't done that. My companies stock fell by 2/3+ and we actually had profits and a good business model. And the tons of money I scraped up by buying tech stocks and dumping them when they hit stupid levels was nice to have.

I missed a big chunk of the 2007/2008 debacle, but I also bought a $550k house thats worth 350k now. And I ducked that 20% drop last year.

I just go by Warren's credo. "Be greedy when others are fearful (I was buying hard into equities near the bottom a few years ago) and fearful when others are greedy (as in last year when the market was high, but the news was all bad)"

People are being greedy right now. I'm pretty sure Obama wins re-election and then the republican controlled congress antagonizes the situation and the market drops like a rock, then has a nice recovery around the 2nd quarter of next year. I'm feeling a lot more fearful than greedy right now.

 

[haha]

In studies of investor psycology, it has be shown that many people have precisely this problem. Thus the adage that the stock market is the only market where people don't buy when things go on sale (fear). And the counterpoint about people chasing recent hot performers, or, "piling in at the top" (greed).

A common problem, yes. Everyone's problem, no.

Agreed. So a strategy that hedges bets, i.e. remains diversified, in the long run makes more sense than one that tries to jump all in to switch to one asset class or another based on near-term price predictions.

I'm not sure if you are respoonding to my post or not, but if so you did not understand my post. I said we do not know what will happen, but we do know current prices and values.

Wise timing has far more to do with current prices/values than it does with any predicitons, which I agree are often but not always worthless.

In any case,the fewer people that I convince the better I like it. I'll drop out now, since everyone knows what is correct. It is received wisdom around here.

Ha

 

[REWahoo]

In any case,the fewer people that I convince the better I like it. I'll drop out now, since everyone knows what is correct. It is received wisdom around here.

Ha, I know you are working hard at it but you really need to find a more subtle way to say "screw you idiots".

 

[haha]

Hey, that is not what I am doing. But when I carefully answer something, then someone picks a strawman out of the sky and refutes that strawman, someone is not being serious.

All I am saying is that this is not enjoyable to me. I don't argue with my best friends, why should I argue with the internet? It seems to me that what I am saying is, great, I am happy, I am glad you are happy. Wahoo, you have been here a very long time. You know there are classic poster fu's, none of which have I ever used. I also try hard not to misconstrue someone's statement, and then "prove" it wrong.

My typical statement is "horses for courses", but it seems that some others think that there is only one approved course, for all horses.

Ha