It's back, it's up

[Sam]

The stock market, that is. We need at least 3 more days like this to make up for the last two weeks' damage. Fingers crossed.

 

[Nords]

It's back, it's up

And here I thought this was a followup on the Viagra thread.

As for the stock market, I fear your optimism may be premature. But why the heck should I worry if I'm reinvesting cheaper dividends and shorting stocks...

 

[cute fuzzy bunny]

Dangnabit, i'm stupid again!

And based on the premarket futures, i'm not going to be getting any smarter today either.

 

[Dawg52]

Dangnabit, i'm stupid again!

And based on the premarket futures, i'm not going to be getting any smarter today either.

It would be nice if you remain ignorant. But you will probably have your smart days too.

 

[cute fuzzy bunny]

I just wanna be really, really smart for a couple of months and then blissfully ignorant for the rest of my life...

 

[LOL!]

It seems appropriate to comment about the best-days, worst-days phenomenom.

Studies show that if you miss the 10, 20, 30, ... N best days in the market over a given time period, then you end up with mediocre returns. Yesterday was one of the best days in the last year.

Studies show that if you miss the 10, 20, 30, ... N worst days in the market over a given time period, then you end up with mediocre returns. Last week had one of the worst days in the last year.

As is typical, the recent best days and worst days occur close together in time, so it is pretty hard to do market timing. So if you are in the market all the time, you get decent recents.

At the beginning of a day, one cannot usually tell if the day is going to be a best day or not, but near the end of the day you know. The trouble is that it is too late to do anything about it.

In contrast, at the end of a day, one can tell easily if the day is going to be a worst day or not. Thus, you can buy equities near the end of those worst days. Since you have "missed" a worst day with the cash you just invested, you will come out ahead in the long run. This is so simple, that one should relish those worst days and make use of them.

 

[Sam]

And here I thought this was a followup on the Viagra thread.

Sorry for the disappointment.

As for the stock market, I fear your optimism may be premature. But why the heck should I worry if I'm reinvesting cheaper dividends and shorting stocks...

Is that a joke? Judging from your posts on investment, I had imagined a very conservative investor.

 

[lazygood4nothinbum]

In contrast, at the end of a day, one can tell easily if the day is going to be a worst day or not. Thus, you can buy equities near the end of those worst days. Since you have "missed" a worst day with the cash you just invested, you will come out ahead in the long run. This is so simple, that one should relish those worst days and make use of them.

not that i really knew what i was doing but that describes my activity this last week. moving money into vanguard, i was mostly in money market but was afraid to jump into an index fund because everything seemed so high. so i dirty market timed, er, rather, i income-averaged (i think that's the right term?) into the funds.

i moved a chunk at the end of a day when market dropped 80something points i think, feeling real good that i missed that bad day. but then we had two more really bad days and i was upset that i didn't dirty market time it better, um, i mean, income-average in smaller increments.

but a very good lesson for me in dirty market timing nonetheless.

 

[cute fuzzy bunny]

I had imagined a very conservative investor.

 

[Sam]

Geez. So I was completely wrong, heh? Oh well, nothing's new...

 

[Nords]

Judging from your posts on investment, I had imagined a very conservative investor.

Our ER portfolio is 95% equities right now, 30% in Berkshire Hathaway and another 10% in other individual stocks, so I think "embraces volatility" is a more accurate description. But we can do that because of the military pension and right now we're about as fully-invested as we ever get. We usually try to keep a couple years' spending in cash but our rental property has been throwing off extra cash ever since the parents in law moved back to the Mainland.

Other than the Diana Shipping secondary in March we've been neither buying nor selling over the last few months in the ER account, just reinvesting dividends. I don't short stocks in our ER account-- I don't mind the risk but I don't ever want to have a spouse discussion that starts with "Hey, honey, that's a nice outfit you're wearing, by the way do you have any spare cash for a margin call?"

In my personal little "brilliant investor" account I shorted First Fed (mortgages) and Abercrombie & Fitch (declining sales) back in February. I also finally threw in the towel on @#$%ing Nortel after three years. Otherwise my trading activity has dropped way off in the last year as I find more productive (less labor-intensive!) ways to occupy my time. I still get an occasional twinge when I see something I've been watching set record lows or shoot up 10% in a month but I'm too lazy to keep up with the research.

Anyway the market's recent air pockets have been nothing as significant as March or last summer. The averages have run up significantly since then and, instead of being driven by profits or expansion, I think it's driven mostly by cheap credit fueling mergers & acquisitions. The music will stop over the next three months and the scramble for the exits will hopefully reset everything by 10-15%. At that point I'll probably start closing out my shorts, ditch more Tweedy, Browne, and buy large-cap dividend ETFs like DVY.

I don't have to time anything-- just sit tight and wait for it.

 

[Sam]

Interesting. Thanks for clarification.

 

[cute fuzzy bunny]

Nords can invest aggressively because he did his 20-something years in the military and has a great pension.

I can invest aggressively because I paid off my mortgage.


This is way less fun without SG around.