Future of stock market

[wabmester]

I got the graph from http://www.ess.ucla.edu/faculty/sornette/prediction/index.asp#prediction

I scanned their paper.   Executive summary: "we tried something like this before, and it was a dismal failure, so we're trying something different this year, and we'll see how it goes."    The paper was written last month, so they are simply fitting an existing curve and there has been no predictive power demonstrated here.

 

[sgeeeee]

Its kinda making me horny...

Well it's too late. You can't see my snake now.

 

[laurence]

No, no, no! There will be no bull market for another 3-4 years until I have accumulated enough in my 401ks and IRAs, then the market will double, and that's an order!

 

[unclemick]

Heh, heh, heh

Certain old pharts(not naming any) might see the making of a 'head and shoulders formation' - sans any number crunching and reading the tea leaves of course.

Reading too many of the wrong kind of investment books as a youth - can cause things like that to show up in old age.

heh, heh, heh. - candlesticks anyone

 

[cute fuzzy bunny]

Well it's too late. You can't see my snake now.

As usual, we barely get through a day without someone talking about my butt or telling me about their snake.

 

[JPatrick]

Check out this trend.

I see higher highs and higher lows and that's a good thing 8)

 

[LovesLife]

Heh, heh, heh

Certain old pharts(not naming any) might see the making of a 'head and shoulders formation' - sans any number crunching and reading the tea leaves of course.

Reading too many of the wrong kind of investment books as a youth - can cause things like that to show up in old age.

heh, heh, heh. - candlesticks anyone

Unclemic or others,

Please explain the "head and shoulders formation" expression. I've seen it before but I can't remember what it means.

Thanks

LL

 

[REWahoo]

Good overview of whether or not the market is over or undervalued. Bottom line...no one really knows.

REW

http://news.yahoo.com/news?tmpl=story&cid=530&e=1&u=/ap/20050710/ap_on_bi_ge/wall___main

 

[wabmester]

Please explain the "head and shoulders formation" expression.  I've seen it before but I can't remember what it means.

It's a Technical Analysis term. Those guys stare at charts all day and look for chart formations that are supposed to be predictive of future prices.

http://www.incrediblecharts.com/technical/head_and_shoulders.htm

 

[LovesLife]

Wab,

Thanks for the link and explanation. I took a look at the site and am amazed at all the info there. I think the reason I am a "buy and hold" investor is out of default. I could never get my head around all the stuff.

LL

 

[laurence]

LL,

You don't need to, more of those "super smart" guys lose money than make money. All that technical jargon is just noise. I bounced around a hundred boards until I found this one, by far the smartest group of investors.

 

[P.S.]

Re: This time it's REALLY different. No, really!!

BTW, as of today we're 97.5% equities (minus whatever Tweedy, Browne Global Value has in cash) and we're thinking of picking up another percent or two of individual stocks.  I don't really care where the market goes if we can continue to pick up investments at value prices.  So under those criteria we need the market to drop by at least 40%...

Can I ask Nords, what were you thinking of buying? Also, what funds would you get now that Tweedy Browne is closed?

 

[TromboneAl]

You can compare those technical analysts to people who analyze lottery numbers to figure out which ones to choose.

 

[al_bundy]

Wab,

Thanks for the link and explanation. I took a look at the site and am amazed at all the info there. I think the reason I am a "buy and hold" investor is out of default. I could never get my head around all the stuff.

LL

I think the theory is that a lot of stocks go up and down on rumors and other things that aren't published in news stories or where the stories come out after the fact. I think with technical analysis people try to guess the pros who have access to more info by looking at historic trends. The average joe can't do his own channel checks.

 

[Nords]

Re: This time it's REALLY different. No, really!!

Can I ask Nords, what were you thinking of buying?

I research anything that Brewer is buying, and I've learned that I have to be quick about it, too! I'm still watching MOVI, DLX, & PLMD.

Spouse & I hold some Tate & Lyle PLC ADRs (TATYY, ~1%) and we may add more as they strengthen their Splenda sweetener market. Otherwise the retirement account is Berkshire Hathaway (30%), Tweedy (35%), a small-cap value ETF (IJS, 20%), her military TSP small-cap stock index (~1%), and a DOW dividend ETF (DVY, 10%).

The rest of my stocks are in my personal account. I'm still infatuated with investing and I lack discipline but I'm slowly groping toward a style I can execute without perpetually wondering "What if...?" (And without blowing up the retirement portfolio.) Two of my favorite books are Gary Smith's "How I Trade For a Living" and Nicolas Darvas' "How I Made $2M in the Stock Market", but what I really need to follow is Marcel Link's "High Probability Trading" advice on limiting losses. I know enough about the first two books to realize that I won't live Gary's life and that Darvas' chart-reading might not work with today's volatility (but I'm not entirely quit of Darvas).

Unfortunately my investing style is schizophrenically between Peter Lynch & Warren Buffett. I like every stock I see but I'm too cheap to buy most of them. I tend to pick up tickers randomly from my daily reading instead of screening for small-cap value. I also lack daily dedication so I should stay with liquid stocks for sell-stops to properly execute. I need to settle on the ultimate screening criteria, run the data once or twice a month, and stop randomly pecking around.

Having said that all that I've bought Nortel (NT), Sun (SUNW), & Overstock.com (OSTK) as turnarounds and I'm afraid that they're still attractively priced. I'm still down on all three. I've bought Dolby (DLB) & Cascade Microtech (CSCD) after their IPOs and added on the dips. No profit there yet. I've bought Las Vegas Sands (LVS) and I'm considering more. I'm still watching Given Imaging (GIVN) and I'll buy CostCo (COST) again if it drops below $40.

My personal portfolio's made this year's money from shorting Greenfield Online (SRVY) and Build-A-Bear Workshop (BBW). I'm watching Abercrombie & Fitch (ANF) and Herbalife (HLF) for my next shorts. I've also been watching Ampex (AMPX) but I can't make up my mind whether to buy it or short it.

Our kid bought Scholastic (SCHL) two years ago at $30. Next week's release of the sixth Harry Potter book may boost the stock over $40. So clearly I have something to learn from her example.

Also, what funds would you get now that Tweedy Browne is closed?

We're in the distribution phase of our lives, we don't DCA any more, and we've been moving out of mutual funds. TBGVX is our last mutual fund because we started buying in 1996 and about half our holdings are cap gains. We've been selling Tweedy every year but so far it's gaining faster than we're selling and I guess it's a good thing that they're closed.

I've been very happy with the S&P600/Barra Small-cap Value ETF (IJS) and pleasantly surprised by DVY. They're both keepers and we'd be happy to let them take over the asset allocation. If we were going to buy other international funds then I'd buy Third Avenue (which I believe is closed) or the ETF EFA.

 

[Ed_The_Gypsy]

Just in case somebody missed something...

Curve-fitting stock market data stops working at the last data point. There are umpty-bazillion curves that can be "fit" to any group of data. A perfect fit to "N" data bits can be had with an "N" order equation, but projecting datum N+1 using that equation does not work. Then, of course, you can change "N". Do you want to count the Dow (for example) at the end of the day? At the end of the week? The end of the month? Every half-hour?

When I was a kid, Science magazine had an article where a table of random numbers was identified as the fertility of unicorns and was eventually correlated with the phases of the moon. I kid you not.

But some NEED to believe. I can help you-all. I have to tools to curve-fit anything you want. $100 US/hr. Faith-based investment advisor. Off-shore, too. (How do you get a million dollars in Belize? Come in with two million.) Let me take you for a ride. help you with your lamentably, non-deductable losses investments. Past performance is no indicator of the integrity of the sponsor. ( I am sorely disappointed at the limited response to my offering of swamp land in Florida.) I will happily sell you no-load funds through my unlicensed brokerage for an 8% sales charge. Won't you please let me churn your account?

Honest John Fox
(Who remembers Walt Kelly's classic? Two points if you can name the gator with the cigar. Two points if you can name the turtle.)

 

[REWahoo]

(Who remembers Walt Kelly's classic? Two points if you can name the gator with the cigar. Two points if you can name the turtle.)

From Pogo: Albert Alligator and Churchy La Femme the turtle. "We have seen the enemy and it is us."

REW

 

[Mr._johngalt]

From Pogo:  Albert Alligator and Churchy La Femme the turtle.  "We have seen the enemy and it is us."

REW

The POGO line is great! He was paraphrasing a line by Oliver Hazard
Perry at The Battle of Lake Erie (War of 1812):

"We have met the enemy and they are ours!"

JG

 

[P.S.]

Re: This time it's REALLY different. No, really!!

I research anything that Brewer is buying, and I've learned that I have to be quick about it, too!  I'm still watching MOVI, DLX, & PLMD....If we were going to buy other international funds then I'd buy Third Avenue (which I believe is closed) or the ETF EFA.

Thanks Nords; really appreciate the thorough answer.

 

[Spanky]

If we were going to buy other international funds then I'd buy Third Avenue (which I believe is closed) or the ETF EFA.

How about EPP?

 

[Nords]

How about EPP?

Sure, don't go to Japan if you don't want to. But I suspect that Tweedy has been liquidating fully-priced European stocks and buying Japanese stocks with single-digit P/Es.

I don't think I'd have the personal research skills or the guts to do so, but that's why we're giving Tweedy 1.37% of the annual results...