Millionaire Mommy Next Door

[cute fuzzy bunny]

Well, there sure is a lot to be said for momentum investing. I used it in the late 90's. Hard part is you have to know when to stop before things start tumbling when a bear hits, because the momentum is a little stronger on the way down than it was on the way up. Worse than snickerdoodles, it suckerdoodles.

Oh, and once you've figured out that you have to stop for a while, you have to figure out when exactly is the good time to start again.

But clearly some folks have figured out this combination of market timing and mass group psychological evaluation.

This from a guy who used to be a stock picking, momentum investing, leverage using, financial porn reading, investment scheme subscribing, active management madman.

No free lunches. No sure fire systems. No way to beat the system long term. You may be lucky, you may fall victim. Or you can just play the smart money.

Gambling sure is a lot more fun though, as long as you know thats what you're doing.

 

[twaddle]

I was hoping for the momentum investing thread. O0

It would never make it past the pitchforks and torches.

I think there was a guy on the diehards board who followed the same newsletter. Not as his main strategy, but sort of as another horse in a race against other reasonable sounding strategies. He didn't get a great reception there.

FWIW, here's the last 5 years of FUNDX vs SP500 vs small-cap value. Hard to separate signal from noise in that timeframe.

 

[Rich_by_the_Bay]

I'm disappointed. Not surprised to get a peek at what was just below the surface, but disappointed.

Well, ever onward as we close another episode of "As the World Turns" here on WFIRE.

 

[Purron]

As a relatively new participant on this board, I found this entire exchange with MMND to be quite bizzare. Does this kind of thing happen frequently here? I enjoy learning and interacting with the folks here. As I have posted before, I am one of those super risk adverse types with most of my savings in CDs and the TSP G fund. Even so, I have not experienced anyone putting down my position on investing. I think perhaps this is because I didn't suggest my ideas were better than anyone elses. In fact, I know many of you have done much better with your investments than I have. Because of this, I hope to learn enough to introduce a little more risk and return in my portfolio as I gain confidence, knowledge and experience.

 

[Notmuchlonger]

Momentum investing almost sounds like market timing to me. However I am probably wrong. Since I am a savage.

 

[twaddle]

Momentum investing almost sounds like market timing to me. However I am probably wrong. Since I am a savage.

It's based on behavioral finance. The idea that investors run in herds.

Not that we've ever seen the herding instinct in play here on ERF. We're above that sort of behavior.

 

[haha]

Woohoo! We did it! We repelled the invader! High-5's all around.

The *last* thing we needed around here was another self-made 40-something millionaire with a slightly different take on the path to get there.

Is it safe to talk about passive index investing again?

Well, whenever you feel that you have recoverd from your loss, we could start a discussion about momentum investing. MMND may return, and even if she doesn't come back, there is someone on the board named Poyet who has mentioned a momentum and timing method that he or she uses. S/he amy have gone into some detail; I don't know.

For me, once I have seen that round wheels work well, I don't keep searching for some other shape that might be better.

All investing approaches have weaknesses. The major weakness in investing in a diversified group of dividend paying individual stocks that seem to have low prices to long term absolute value is that you make a mistake in the analysis. Another risk is that you forget your diversification discipline, or get frustrated and start accepting "relative value", or adjusting your discount rate or whatever.

I haven't thought as much about index investing, but a major risk would seem to be that overvaluation market wide tends to be ignored; and these overvaluations can be corrected. Supposedly adequate asset-allocation diversification protects against this. This board is full of people who got to retirement riding this horse.

Mutual fund market timing is great during trending markets, not so good if the trending stops.

The relative strength method that I believe was being put forward by MMND is different again, and I really don't know anything about it. A newsletter writer with a good record named Dan Sullivan promotes this, as well as a similar strategy with individual stocks.

I think Nords has studied trading methods, he may have something to impart.

And if not, there is always the promotional literature at No Load *X, if you feel drawn to that.

My personal difficulty with any market dependent method that doesn't have a strong value component is the risk of getting stuck with the stuff. If the market stopped tomorrow, but business continued to operate I would be OK. Many stocks buried in mutual funds are crap that no one should own, at least not at the quoted prices.

Ha

 

[Notmuchlonger]

It's based on behavioral finance. The idea that investors run in herds.

Not that we've ever seen the herding instinct in play here on ERF. We're above that sort of behavior.

See I could have used a quality thread on it. Now I feel sort of cheated. .. Moo

 

[bright eyed]

oy vay

 

[SecondCor521]

Alas - I like cookies! Snicker Doodles but you had to eat em fresh - my Mom's always turned to rocks in a day or so.

Microwave them for about 15 seconds. Or eat the whole batch right away ;-)

2Cor521

 

[TickTock]

I will admit in my sinful past (1980's) before I became a born again Boglehead - used to borrow co worker Huel's copes of NoLoad Fund X from time to time - but like Clinton who never inhaled - I NEVER paid the 149 bucks.

I poked around Fundx's site... does their newsletter reveal their methodology, or just their fund picks?

 

[clifp]

As a relatively new participant on this board, I found this entire exchange with MMND to be quite bizzare. Does this kind of thing happen frequently here? I enjoy learning and interacting with the folks here. As I have posted before, I am one of those super risk adverse types with most of my savings in CDs and the TSP G fund. Even so, I have not experienced anyone putting down my position on investing. I think perhaps this is because I didn't suggest my ideas were better than anyone elses. In fact, I know many of you have done much better with your investments than I have. Because of this, I hope to learn enough to introduce a little more risk and return in my portfolio as I gain confidence, knowledge and experience.

I've only been on the board for a bit over a year but on other retirement boards for 8 years and other internet discussion for 26 years... I have
seen plenty of weirder behavior, but still I say that ranked up pretty darn high in bizzare factor. If you just go by her blog, MMND is seems a like a perfectly normal LBYM type (ok admittedly not overspending is weird ). Sure she is bit cocky but no worse than plenty on the board, and frankly if you don't take strong opinions on blog it is boring to read.

Her Hi I am post sounded like something from the introduction speech a political candidate would get from a key supporter. The candidate if he had any brains would say something like wow thanks for the intro, but really I am not nearly that perfect followed by a self-deprecating story.

In contrast I went back and looked at mine a few sentences, retired moved to Hawaii working on a CFP heck even intercst was exceedingly modest.

After the board antibodies kicked in several of us offered her a lifeline. I thought for a moment she was going to grap the bouy Martha offered but
I guess she decide that suicide bombing with her last post was a more dramatic exit.

A pity because I think momementum invest discussion would interesting. I also curious to see how her investing strategy evolved to NoLoadX, it is somewhat unusual and being female makes it even more uncommon. In general women tend to be much more cautious on following risky investing strategy, which as we all know makes them typically better

I give all board postesr 3 strikes before putting them in my penalty box. I am not sure there are enough pieces left after the last post to bother looking for a 3rd strike.

 

[enfp]

I have to say I am disappointed by MMND's last post. I thought she was doing a great job defending herself and keeping everything together and respectful. Then she lost it. I guess she read over stuff and got angrier and angrier. I'm sorry this happened. I liked having another mom with still young kids who was retired. I hardly know anyone who is like that, irl. Well, actually just one friend who kicked her DH out back to work after 6 weeks. oh well.

 

[unclemick]

The late great 'step daughter in spare room' used to have her T shirt - When God Created Man - She was only kidding! She also had a patented stare - "Men! - when in doubt - kick em in the balls!"

I looked at the blog - supports some good causes and I'm I'm curious how diversified(dast I say correlated?) her 19 fund/ETF and 2 bond positions are.

No guts, no glory.

Plus I'd like to move beyond the 15 second nuke or dunk em in green tea with the Snicker Doodles.

heh heh heh - remember I think even intercst was an evil stock picker - and beat the academic odds! So who's gonna take the spread on the Pats?

 

[twaddle]

She lasted longer than most new posters who get attacked by the antibodies here.

I think it's a pretty natural reaction to lash out when cornered.

If you read through the attack posts, I think you'll find that her parody wasn't too far from the truth.

 

[cute fuzzy bunny]

Oh wabbie, why do you continue to punish yourself if its all so bad?

Now that we've seen the nifty chart of a fund that incepted at the head of a bull market, can we see the one they had just before that which was scuttled when it took a face dive from 2000-2002?

Because all of this is really about data mining and surivor bias, isnt it? At $149 a pop?

 

[Moemg]

She lasted longer than most new posters who get attacked by the antibodies here.

I think it's a pretty natural reaction to lash out when cornered.

If you read through the attack posts, I think you'll find that her parody wasn't too far from the truth.

Bull S--- ! When I first posted I was attacked and made fun of by the infamous John Gault . If you scare that easily you'll never make it the world of publishing .

 

[twaddle]

Bull S--- ! When I first posted I was attacked and made fun of by the infamous John Gault . If you scare that easily you'll never make it the world of publishing .

I dunno. Somehow it seems being attacked by one oddball is different than being attacked by a mob, including a couple of moderators. Maybe it's just me.

 

[Sandy]

She lasted longer than most new posters who get attacked by the antibodies here.

I think it's a pretty natural reaction to lash out when cornered.

If you read through the attack posts, I think you'll find that her parody wasn't too far from the truth.

Twaddle,

Some people jump right in and expect to be welcomed and their views accepted without taking the time to get to know the culture and the people. Then they are surprised when they are not welcomed with open arms. Somehow the anonymous nature of the internet tells them this is ok. But, would you simply walk up to a group standing outside your favorite museum and extoll the virtues of rembrant before realizing they were there to see the kadinsky? That type of charging in doesn't work in the real world, but many don't realize it doesn't work here either.

If you want to get others to see your side, you need to first take the time to get to know them and to get them to know you.

 

[growing_older]

There have been plenty of new posters who were NOT attacked by a mob. I don't think the problem lies with the board of posters. If it did, I would expect the "antibody" response more often than just this once.

 

[ERD50]

Well, I'd like to see a momentum thread. I think twaddle is confusing close-mindedness and a healthy dose of skepticism borne of experience.

No-Load Fund-X? I was a subscriber for a few years. I just checked and the file did not escape my last clean-out. That should tell you something. Especially considering what a pack-rat I am.

IIRC, their algorithm for identifying the momentum funds was just a recent entry to the top 3 or 5 rank. When a new fund replaced it, they switched. Kind of like pop songs making the top 10 'with a bullet'.

It worked 'OK' for me - I imagine if you measured it on a risk adjusted basis, it would not look so great. And their charts did show that they fell faster than the market in a declining environment. Since I did marginally better than the S&P in a decent market, I decided to cash in my chips before a big dip came along.

But some form of momentum strategy might be worth consideration.

-ERD50

PS - I was disappointed by the OPs childish response. The OP struck me as a joke, I literally lol'd when I read it. I like to be proved wrong by first impressions - it helps me to keep an open mind. That one didn't help.

That attitude might get her some attention in some circles (Montel?), but it will likely backfire on her along the way. BTW, I think I now understand why her DH 'enjoys' spending a few days a week doing dirty, wet, smelly plumbing work in cramped corners.

 

[twaddle]

Now that we've seen the nifty chart of a fund that incepted at the head of a bull market, can we see the one they had just before that which was scuttled when it took a face dive from 2000-2002?

Because all of this is really about data mining and surivor bias, isnt it? At $149 a pop?

I'm not going to defend her choice in investing. I bow down to the [-]most recent investing fad[/-] passive index investing gurus here.

Here, you can read their propaganda for yourself:

NoLoad FundX | Mutual Fund Perfomance | Mutual Fund Investment Strategy

 

[steve88]

Can I have a do-over here? Please accept my humblest apology and allow me rewrite my "Hi, I am..." introduction:

"Hi, my pen name is MMND. I love to write, but I stink at it. I'm nothing special, so I hope you guys won't mind if I hang around - don't worry, after I beg you for your autographs, I won't get in anyone's way. You are all sooooo brilliant, and well, I'm just a stupid little pee-on. See, I'm just a flunk out in life 'cuz I couldn't afford to finish college.

And, uh, you all are just so stinkin' RICH! Wow! Tell me, what does it FEEL like to have so much money? Gosh, I'm really embarrassed to admit this here, but here goes...my net worth is only a measly 1.6MM. Yeah, I know, chump change. Embarrassing. Don't tell anyone, K? Can you super intelligent, super successful and super rich people pretty please spare me some time to give me a proper financial education so I can grow up to be as rich as you are? (I know I'll never be as smart or successful, so I won't even hope for that.)

Oh my gawd, I am so embarrassed to admit this to all of you, but here it goes. I mean, I did a really stupid thing. I sold my house... and I, uh, am a renter now. (I know, I know, what in the world was I thinking) Everyone told me I was nuts to believe that there was a housing bubble and someday it would have to pop - guess it was just dumb luck that it really did happen. Even poor, dummy people like me get lucky once in awhile. Thank goodness for luck or I'd be nowhere in life.

Since I'm in confession mode, I should add that I am so gullible and so naive that I fell for a get-rich-quick investment scheme. I paid some complete stranger $149 for a newsletter that says it offers some mathematical formula for knowing what mutual funds to buy (but I don't get what all those numbers mean, 'cuz remember, I couldn't afford to finish my college education). Since I paid so much for the stupid newsletter, I did try it. Thank gawd I got lucky again (someone's lookin' out for me, that's for sure), because my investments have been doing better than all of my friends for years, somehow. Dumb luck, I tell ya.

Please, smart people, obviously I need your help. If you don't save me from my stupid choices, I'm gonna end up in the poor house eatin' cat food. I can't do that to my little girl, ya know. So please, help me? Thank you, thank you, thank you, for listening to little 'ol me this long. I'm gonna go back to baking cookies - now that is the one thing I do know how to do!

MMND,
You write very well. From your original post to the post above. The post above is hillarious.

 

[Zathras]

It really is a shame. Although MMND came across rather full of herself, she did bring up some interesting points and a new point of view is always welcome.
I think she was doing well after her initial post, until her most recent one.

I would enjoy hearing more of a discussion on this 'momentum investing'

 

[travelover]

I'm a simple semi-newbie here, but if I had a sure fire way to make money in the stock market, I sure as hell wouldn't sell it to everyone for $149.

I'd invest my own money till I was so rich that Bill Gates was my pool boy.