Spanky
Thinks s/he gets paid by the post
Country music is in vogue. The most recent winner of the American Idol is a country singer - Carrie Underwood from Oklahoma.
Hey, I watched that record executive smile at him, and I know that Bo is winning no matter who got the prize.Laurence said:Bo should have won!
Laurence said:Bo should have won!
- SG said:All indicators use rearview mirror analysis unless someone's come up with a crystal ball that works recently. The valuation indicators work only to the extent that it is true that "tomorrow will be pretty similar to yesterday." My experience tells me that this statement is not true that often. The past three years is a good example. Doom and gloomers have been pointing to the high valuation levels (as measured by their various rearview mirrors), predicting a massive decline, and encouraging everyone to get out of stocks. Meanwhile, the valuation indicators have been steadily coming down without the catastrophe. If there is a massive decline in the near future, I will not get out in time and will suffer the paper losses. But, on the other hand, I won't have to worry about timing the market right to get back in. I'll be there.
I'm sure there are market timers who will do better than I do. And there will be many who do worse. I can live with that. In fact, I think I can probably live pretty well with that.
th said:The historic returns display a mean return rate and valuation level. We're way above that. That clearly says that if the future is like the past, we have not only a big drop ahead of us to get back to 'the mean', we have many years of levels below the mean in order to compensate for all these past years spent above it.
No. I'm not sure how you read that into what I've said. I'm not trying to optimize my future returns, I'm trying to avoid large mistakes. The worst case analysis of historical simulation is an attempt to predict the future only in that you are counting on the finanical drives and forces that have shaped the economic history in the past to continue to produce highs and lows. When the economy swings too low, adjustments are made and things improve. When the economy flies too high, rationality returns and things fall. To the extent that these forces are caused by human nature and human created governments, we assume they will continue to happen. By looking at how bad we've let things get in the past before corrections were made, we estimate how bad it could possibly get in the future. We aren't predicting the future. We're bracing for the worst that's ever happened. (And in my case, for something even worse. I'm at about a 2.5% withdrawal rate.)th said:Hmm...so for some arguments you favor that historic data is predictable for future returns, at least in approximation. In other arguments, you dont?
. . .
I think that if I'm so wrong that I run out of money, then we are all going to have serious problems. But I think that betting on a specific future could cause me to have serious problems while the economy, in gernal, fairs okay
BigMoneyJim said:Borrowing from the dog-on-a-leash analogy in the other thread, who's to say the dog doesn't stay on this side of the man for 5, 10 or 15 years? How long does it behoove you to stay in other asset classes while the mean for this one goes up?
Actually I thought you were playing both sides of the fence by telling OAP that keeping a steady asset allocation beats the market over market timers, yet you've been telling the rest of us (I'm paraphrasing/interpreting here) that we shouldn't be putting money into equities and should shift some out of equities into cash.
Anyway, from my point of view--which is admittedly less experienced and less educated than many others here--I can see that in the past maintaining a set allocation based on long-term strategy can work well. I can see that making moves at the wrong time can cause drops that are difficult to recover from without taking risk.
- SG said:No. I'm not sure how you read that into what I've said.
I sold at nasdaq 5000 and bought a week or so after the 9/11 dump. The difference between where I am now and where I'd be if I had 'stayed the course' and remained fully invested throughout is ridiculously large.
It's called "short & distort". Many "professional" investors have probably already done the first part, now they just have to talk the rest of us clueless individuals into stampeding for the exits!Cut-Throat said:Why don't you just short the market and rub our noses in it!
th said:Nasdaq 4000 looked incredibly dumb to me. I wanted to get out then. But I waited until after the first of the year to delay the capital gains another tax year. Imagine how I felt about nasdaq 5000.
Nords said:I'm with you, TH. We've let our cash position nearly double, from 2% all the way up to 3.5%.
Well you can't blame me for not understanding. It's so out of character for you to be less than serious on the boards.th said:I'm messing with you buddy...lighten up
FLIP FLOPPER!!!
How Expensive is the S&P, Really
For me, there is a big difference between losing say $400,000 if the market makes a moderate drop, to perhaps gaining $400,000 if it goes up an equal amount.
Cut-Throat said:If you've got $4 Million in invested assets this is no big deal - it's only 10%. I can live with that!
I traded commodities just enough to disabuse me of that idea. Money is money. Granted you have to be able to withstand adversity to be in place for gain, but I don't want a fair shake, I want an F-Me, can this be possible? kind of shake.unclemick2 said:Mr Markets fluctuation is not 'real money' - until you sell and the IRS comes calling.
I am bearish, so I don't have enough riding on S&P to do significant damage.
I should repeat-I am not making a prediction. I am just taking a position in accordance with my reading of risk/reward possibilities. If I am out hiking in the mountains, and come to a rope bridge across a chasm, I have to decide to cross, go back, or look for another route. If I decide not to attempt the crossing, I am not predicting that the bridge will necessarily fall.Cut-Throat said:Are you bearish enough to short the market? - Hey, I know I can't predict where it's going! - But how confident are you of your predictions?