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03-13-2021, 11:03 AM
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#1
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Recycles dryer sheets
Join Date: Jul 2019
Posts: 262
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CNN "Fear & Greed Index"
I'm sure this isn't news to a lot of you, but I just discovered it and thought it might be useful or interesting to some of the folks here.
https://money.cnn.com/data/fear-and-greed/
I've definitely bought at market highs, so maybe this will help avoid that in the future
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03-13-2021, 11:16 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,308
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If it worked the people that put it together wouldn't be giving it away for free. They would be quietly trading for their own accounts.
__________________
Ignoramus et ignorabimus
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03-13-2021, 12:18 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Sep 2014
Location: The Great Wide Open
Posts: 3,779
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Any one who is describing some one else's behavior as greedy, is either green with envy, or kicking themselves that they weren't smart enough to participate.
__________________
Give me Liberty or give me Death. Patrick Henry
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03-13-2021, 05:40 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Jul 2011
Location: Reading, MA
Posts: 1,672
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Quote:
Originally Posted by Winemaker
Any one who is describing some one else's behavior as greedy, is either green with envy, or kicking themselves that they weren't smart enough to participate.
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FOMO, checko.
I dislike putting new money into stock funds at record highs, so I understand that part.
Starting year nine of retirement, the only new money I have is excess retirement income going into my taxable account.
My AA for that account is approximately 95% stock funds and 5% cash.
But my situation is a bit odd, so let's talk about something else...
😄
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03-14-2021, 07:56 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,669
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I thought Green meant Good (and Red meant Bad).
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03-14-2021, 08:42 AM
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#6
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Syracuse
Posts: 3,501
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Greed is Good
---Gordon Gecko
__________________
“No, not rich. I am a poor man with money, which is not the same thing"
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03-14-2021, 09:38 AM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,148
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Doesn’t this, swinging wildly within a year, tell you why it’s a useless metric to long term investors (most here)? It’s another hindsight indicator at best...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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03-14-2021, 03:30 PM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,197
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Quote:
Originally Posted by Midpack
Doesn’t this, swinging wildly within a year, tell you why it’s a useless metric to long term investors (most here)? It’s another hindsight indicator at best...
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Yup, it goes from greed to good and vice versa multiple times a week at times.
__________________
TGIM
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03-15-2021, 05:08 PM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Quote:
Originally Posted by Dtail
Yup, it goes from greed to good and vice versa multiple times a week at times.
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It's well known that the market is schizophrenic.
A medical Web site has this to say: "Treatment can help, but this condition can't be cured".
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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03-15-2021, 05:42 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Posts: 12,566
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Geckos are good.
---Gordon Green
(I like geckos.)
Quote:
Originally Posted by GravitySucks
Greed is Good
---Gordon Gecko
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__________________
If you understood everything I say, you'd be me ~ Miles Davis
'There is only one success – to be able to spend your life in your own way.’ Christopher Morley.
Even a blind clock finds an acorn twice a day.
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03-16-2021, 06:07 AM
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#11
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Full time employment: Posting here.
Join Date: May 2007
Posts: 880
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It seems to me that traders exhibit extreme temperature swings between "greed" and "fear" whereas long-term investors have a low-grade greed fever.
__________________
"It is better to have a permanent income than to be fascinating". Oscar Wilde
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03-16-2021, 06:30 AM
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#12
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Thinks s/he gets paid by the post
Join Date: Dec 2015
Location: Michigan
Posts: 4,939
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It's only mildly greedy, and not tradable in any case. (Not that anything is really tradable.) No market timing!
__________________
"The mountains are calling, and I must go." John Muir
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03-16-2021, 08:52 AM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,797
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I am not sure how to use this. Tempted to say that it is only useful at extremes if one is trying to, say, readjust AA. But highs look like they were reached around November 2020 and the market returns have been very good since.
Maybe useful for long sustained extremes? Would help to see many more years on the chart.
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03-16-2021, 09:41 AM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,308
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Really, the gadget is clearly the product of someone trying to create today's click bait. The fact that its underlying indicators are equally weighted is prima facie evidence that no covariance analysis has been done. A serious effort would undoubtedly result in unequal weightings, but even that begs the question: What historical data could be used to validate the "measurement?" "too bulliish," "too bearish" -- How do you validate that, not to mention validating their claim that you can profit by "taking the other side?"
But, hey, the real objective is to attract eyeballs. That's apparently working for them.
__________________
Ignoramus et ignorabimus
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03-16-2021, 10:33 AM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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I looked at what they use to compute this "Greed/Fear Index", and found it reasonable.
How useful is this?
1) Is the current greed or fear justified?
This is the hardest thing to determined. For example, the index crashed to "extreme fear" when the news of the world-wide pandemic broke out. Of course, who was not scared at that point? Perhaps only by Covid deniers? How about the 9/11 event? The financial collapse caused by the subprime mania?
2) Will the current greed/fear index which simply reflects various current market conditions persist?
Back in mid last year, could anyone predict that there would be several vaccines available less than a year later? Could anyone exactly predict what the death rate and the economic damage would be? This index is telling the current status, not predicting what will happen ahead, and how soon it will happen.
3) Even if any index claims to predict the future, which this one does not, it will not be widely followed.
It's hard to overcome greed/fear. Who does not know that exercise is good for you? Why do we still have so many lethargic and overweight people? Same with investing.
I found this "Greed/Fear Index" interesting. How useful is this? I don't know yet. Again, this tells you about the current status, not about when something will reverse. Do I think the bitcoin and EV mania is ridiculous? Yes. But do I dare short them? No. But are these buyers greedy? You know my answer.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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03-16-2021, 11:28 AM
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#16
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Recycles dryer sheets
Join Date: Oct 2012
Location: Minneapolis 'burbs
Posts: 382
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I think it's just a rebranding of the VIX, but I could be wrong.
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03-16-2021, 01:08 PM
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#17
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Thinks s/he gets paid by the post
Join Date: Oct 2019
Posts: 3,652
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Has it been back tested?
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03-16-2021, 02:18 PM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2016
Location: Northern Virginia
Posts: 7,515
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Quote:
Originally Posted by ncbill
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I was about to post the same. The market spends a lot of time trading near all-time highs. And the most likely occurrence after an all-time high is yet another all-time high.
As far as the indicator, not sure the value but it looks kind of interesting.
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03-17-2021, 09:08 AM
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#20
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Thinks s/he gets paid by the post
Join Date: Oct 2019
Posts: 3,652
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I tried to overlay the S&P 500 chart with the fear/greed index, but my skills failed me. I would like to see some indexes overlaid with the fear/greed index.
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