Author Topic: Why I am reducing mkt exposure+have been since 2015.  (Read 186375 times)

iamlindoro

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #550 on: April 28, 2017, 06:21:03 PM »
What ever happened to Cougar?  Seems like he should be here, gloating, no?  Or not?  Yeah, probably not.

He's reaping the results of reducing mkt exposure since 2015.

AKA "Can't afford internet."

Cycling Stache

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #551 on: October 03, 2017, 10:08:04 AM »
Giving this thread a bump for all the people enjoying the "Top Is In" thread and to show new forum members that people have been predicting a correction on this forum for a long time.  They may be right at some point, but just because strangers on the internet are predicting things shouldn't influence your investment decisions.

This thread started in February 2016.  The S&P500 is up approximately 40% (including dividends) since then. 

(I also wanted to bump the Red Dow thread, but ARS locked it!)

Tyson

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #552 on: October 03, 2017, 10:26:54 AM »
Giving this thread a bump for all the people enjoying the "Top Is In" thread and to show new forum members that people have been predicting a correction on this forum for a long time.  They may be right at some point, but just because strangers on the internet are predicting things shouldn't influence your investment decisions.

This thread started in February 2016.  The S&P500 is up approximately 40% (including dividends) since then. 

(I also wanted to bump the Red Dow thread, but ARS locked it!)

Top has been in since 2015!  Or... not. 

"Reducing market exposure" = "trying to time the market" = losing. 

Lets do some quick math.  Lets say Cougar has $200,000 and pulled the $$ out at the end of 2015 and beginning of 2016.  As Cycling Stache notes, there's been a 40% market gain since then.  So....

$200,000 x 1.4 = $280,000

Had Cougar left his money alone and not tried to time the market, he'd be $80,000 richer.  Obviously Cougar felt that the evidence for a flat market, or even a market drop was compelling.  Compelling enough to take his money out of the market.  But he was wrong.  So, so, so wrong.  So, boys and girls, what's the lesson here?  Don't try to time the market.  Buy and hold.  Buy when things are going up.  Buy when things are going down.  Keep doing that till FIRE. 

Retire-Canada

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #553 on: October 03, 2017, 10:42:47 AM »
I will retire before most of you because I am not a market timer, I'm moving average investor; which got me out on December 2015 and back in during march. so while most everyone else here had their accounts decline nearly 10% during that time; mine did not. yeah, I missed a little upside this year but only had to endure about 2% of that correction that started in December(and no, I will not tell you the indicators I use, especially for free).

Cougar got out and then back in without mentioning it for months so there was no confirmation that actually happened.

Tyson

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #554 on: October 03, 2017, 10:51:03 AM »
I will retire before most of you because I am not a market timer, I'm moving average investor; which got me out on December 2015 and back in during march. so while most everyone else here had their accounts decline nearly 10% during that time; mine did not. yeah, I missed a little upside this year but only had to endure about 2% of that correction that started in December(and no, I will not tell you the indicators I use, especially for free).

Cougar got out and then back in without mentioning it for months so there was no confirmation that actually happened.

Ah, I missed that.  It would still be interesting to see how he's done over the past 10 years or so vs a plain dumb buy & hold indexer....Hopefully he comes back and sees this & lets us know.

Retire-Canada

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #555 on: October 03, 2017, 10:54:41 AM »
Hopefully he comes back and sees this & lets us know.

I'm sure Cougar will report having crushed the B&Her. I don't have any confidence that this report would be accurate.

Tyson

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #556 on: October 03, 2017, 10:57:41 AM »
Hopefully he comes back and sees this & lets us know.

I'm sure Cougar will report having crushed the B&Her. I don't have any confidence that this report would be accurate.

I just checked his "Last Active" time in his profile - December 2016. 

You know, this happens a lot - someone comes in here, posts about how they beat indexing, then disappear, never to be heard from again.  You'd think that if they were doing so awesome, that they'd stick around and rub it in a bit. 

Retire-Canada

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #557 on: October 03, 2017, 11:03:29 AM »
I just checked his "Last Active" time in his profile - December 2016. 

You know, this happens a lot - someone comes in here, posts about how they beat indexing, then disappear, never to be heard from again.  You'd think that if they were doing so awesome, that they'd stick around and rub it in a bit.

The only way I'll believe market timing claims is if the poster in question provides real time updates on their moves. Otherwise everyone is a superstar.

frugledoc

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #558 on: October 03, 2017, 02:50:32 PM »
List of MMM Stockmarket Guru's gone but nor forgotten:
- MrPercentage
- Cougar
- Thorstash

I do wonder if they will come back for a visit one day if there is a market correction below where they made their calls.

Especially MrP, I miss that guy!

sol

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #559 on: October 03, 2017, 03:55:30 PM »
List of MMM Stockmarket Guru's gone but nor forgotten:
- MrPercentage
- Cougar
- Thorstash

Let's not forget milesdividend, who spent several months and something like twenty pages of the dual momentum thread trying to defend market timing, only to finally admit he was losing money compared to the index.

talltexan

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #560 on: October 04, 2017, 06:58:16 AM »
I have a trading account in which I currently own a few single stocks as well as a NASDAQ 100 covered call etf. If I started a journal posting real time trading activity, would you guys be interested?

Trading account is only about 4% of everything I have invested, so it might not be high stakes enough to attract interest.

waltworks

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #561 on: October 04, 2017, 09:03:28 AM »
I think to really get people interested you have to be witty, outspoken, and completely and utterly devoted (or at least claim to be) to market timing/stock picking/triple secret momentum, etc. MrPercentage set the bar pretty high. If you're just messing around with a few stocks with play money, meh.

-W

Tyson

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #562 on: October 04, 2017, 10:03:50 AM »
Agreed - play money doesnít count because the stakes arenít high enough.

sol

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #563 on: October 04, 2017, 10:11:18 AM »
Agreed - play money doesnít count because the stakes arenít high enough.

We only enjoy voyeurism if the person is genuinely ruining their life.

GuitarStv

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #564 on: October 04, 2017, 10:34:49 AM »
Agreed - play money doesnít count because the stakes arenít high enough.

We only enjoy voyeurism if the person is genuinely ruining their life.

Thus, the porn industry.

Tyson

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #565 on: October 04, 2017, 01:00:17 PM »
Agreed - play money doesnít count because the stakes arenít high enough.

We only enjoy voyeurism if the person is genuinely ruining their life.

True!  But mainly I meant that when it's only play money, people are less likely to do something panicky and stupid.  It's a whole different ball game when your entire future is riding on being right, vs just having a loss in your play money area. 

Eric

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #566 on: October 04, 2017, 01:10:53 PM »
Agreed - play money doesnít count because the stakes arenít high enough.

We only enjoy voyeurism if the person is genuinely ruining their life.

I laughed, but luckily market timing is not going to ruin anyone's life.  It just makes you work more.

Telecaster

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #567 on: October 04, 2017, 01:15:56 PM »
Agreed - play money doesnít count because the stakes arenít high enough.

We only enjoy voyeurism if the person is genuinely ruining their life.

True!  But mainly I meant that when it's only play money, people are less likely to do something panicky and stupid.  It's a whole different ball game when your entire future is riding on being right, vs just having a loss in your play money area.

I could be misremembering, but one point I thought Mr Percentage confessed that his port basically was play money, and he was doing all this risky stuff in order to catch up. 

Cycling Stache

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #568 on: October 05, 2017, 07:41:27 AM »
Agreed - play money doesnít count because the stakes arenít high enough.

We only enjoy voyeurism if the person is genuinely ruining their life.

True!  But mainly I meant that when it's only play money, people are less likely to do something panicky and stupid.  It's a whole different ball game when your entire future is riding on being right, vs just having a loss in your play money area.

I could be misremembering, but one point I thought Mr Percentage confessed that his port basically was play money, and he was doing all this risky stuff in order to catch up.

Mr. Percentage confessed nothing!  Mr. Percentage did not make mistakes!

(Occasionally--okay, very often--Mr. Percentage secretly did the exact opposite of what he was recommending at exactly the right time to come out on top and only told us about it later.)

I actually liked Mr. P.  His posts were a little out of control at times, but it was interesting to see someone trying to come to grips with not being the expert market predictor he believed himself to be, and how to deal with what seemed to be a blow to a part of his self-created identity.  This happens a lot in life and on this forum, but his posts gave a track record in which you could see his struggle to reconcile his self-image and reality. 

If we're honest, most of us struggle with this regularly.

talltexan

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #569 on: October 05, 2017, 12:19:44 PM »
I was considering devoting all of my play money account tothe Bitcoin Investment Trust ($GBTC).

If my wife discovers me doing this, it may lead to the life-ruining voyeurism it sounds like people are seeking. Unless I make money. Mrs. Tall Texan doesn't mind bearing extraordinary risk as long as you're in the green.

Interest Compound

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #570 on: October 08, 2017, 03:57:55 PM »
Thank you for bumping this thread Cycling Stache! I love it when we can point out public examples like this to all the newbies in the forum.

Here's a graph of US Stocks and International Stocks since Feb 6th, when this thread was created, to date:



And a quote from the original post:

As you should know, the financial markets has started off the year terribly and thatís going to continue.

[..]

I could go on and on with this list that itís a bad time to be investing in the market.

[..]

If you wish to go off on me and tell the board how wrong I am and me trying to time the market here is a foolís errand, go ahead. [..] I have given the board my opinion on what would be best for them this year and a solid free reference to follow.

We don't need to tell you it's a fool's errand, the data is there for all to see.

To the newbies of the forum, you'll get used to this. Every-time there's a slight jump down in the market, you'll find threads like this everywhere. "I've been getting out of the market for the past year now! See I'm right! Everyone else hurry and jump out too before it's too late! Doomsday for all!"

Only for them to mysteriously disappear when their predictions don't come true. Here's a quote from the last post Cougar has made anywhere on this forum:

I have tried to stay out of this thread even though I started it because it's not really my responsibility to try and save anyone from losing money in 2016, that decision is up to you

[...]

Again, my question is if you could save money this year by reducing exposure over losing it and having to wait additional years before you could retire because you now have to wait to get back the gains you lost; would you ?

And here's the another graph, how the stock market has moved since that post:



Cougar's last post was quite-literally the bottom. And we haven't seen him/her since. Cougar simply disappeared from the forum. Again, this is not unusual in a financial forum. You'll get used to it. And if he/she comes back next year, or the year after, with more doomsday advice, we will all have forgotten about his/her failed predictions in this thread. More likely, they'll come back with a new username so the previous failure can't be attributed to them.

Just remember this thread the next time you find yourself nodding along to another article/news show/forum post, forecasting doom for the markets. If you don't remember the thread, maybe you'll remember this 30 second clip:


John Bogle: all you need to know about investing in three words

So Cougar, if you're still out there...we have a counter question for you:

How many additional years before you can retire, while you wait to get back the gains you've lost?

Update:

Here's a graph of US Stocks and International Stocks since Feb 6th, when this thread was created, to date:

« Last Edit: October 08, 2017, 04:06:43 PM by Interest Compound »

Tyson

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #571 on: October 08, 2017, 08:42:23 PM »

This post will cover three things, the financial markets, the world markets and economy over the rest of this year. As you should know, the financial markets has started off the year terribly and thatís going to continue. Now, the initial downturn was because of the Chinese markets that no one could have forseen but the damage has been done and without serious intervention by the FED; the markets are going to continue to decline, the average bear market decline is 28%, so we would have another 15% minimum to go.

So, I will lay out some facts:
1. 85% of all stocks follow the market, meaning if we are in bear market; you will probably not avoid it.
2. Sales by hedge funds were the largest last week in two years.
3. The baltic dry index, used to measure movement of shipping, is at a record low.
4. Texas general business activity, the state that created 40% of all jobs since 2009;  is at a 6 year low.
5. There have been 8 month over month declines in industrial production in the past 12 months, this has never happened before without a recession.
6. 42 north american oil companies filed for bankruptcy.

I could go on and on with this list that itís a bad time to be investing in the market. Now, I am not trying to scare anyone here that the wheels are about to fall off; but there is no denial the global economy is slowing and much more likely to be in a recession within the next two years than continue to grow.

I am sharing this information with the MMM crowd to help you preserve capital as I would think would be an MMM priority

The reason I am suggesting this is not the time to be buying the dip, the bull rally from 2009 has finally failed and itís likely to be headed lower and at an increasing rate.

The reason I believe this is because even though November thru April are typically the strongest months of the market, every target for the market to rally to this year has failed to hit(meaning the market is weaker).

Cast me aside here if you wish, but my goal of this post is to help the mmmíers preserve capital. If you lost money in 2008, you also lost the time you had to spend gaining back that lost money. The market lost nearly 50%, so you had to gain 100% just to get back to even and that took 6 years and that was on the back of QE which by all accounts grew the market faster than normal.

I would suggest reading: realinvestmentadvice.com,  his daily blog post "Technically Speaking: February Stats & Taking Action" and current weekly report "Whew! BOJ Saved The RallyÖFor Now 01-30-16". I also suggest following his portfolio recommendations in his newsletter if you do not have an idea of how to allocate yours in an economic decline(I currently have less market exposure than he is recommending).

If you wish to go off on me and tell the board how wrong I am and me trying to time the market here is a foolís errand, go ahead. Everyone is entitled to their opinion and Iím not a professional money manager. I have given the board my opinion on what would be best for them this year and a solid free reference to follow; best of luck to you all.

Original post.  Quoting for comedy.

talltexan

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #572 on: October 09, 2017, 11:26:45 AM »
I'd forgotten that Texas was creating that large a share of the jobs. The state has been HURTIN' since that post.

dragoncar

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #573 on: October 11, 2017, 11:34:41 PM »
Iíve been losing to the market for years and I havenít disappeared yet!

DarkandStormy

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #574 on: October 12, 2017, 08:52:37 AM »

This post will cover three things, the financial markets, the world markets and economy over the rest of this year. As you should know, the financial markets has started off the year terribly and thatís going to continue. Now, the initial downturn was because of the Chinese markets that no one could have forseen but the damage has been done and without serious intervention by the FED; the markets are going to continue to decline, the average bear market decline is 28%, so we would have another 15% minimum to go.

So, I will lay out some facts:
1. 85% of all stocks follow the market, meaning if we are in bear market; you will probably not avoid it.
2. Sales by hedge funds were the largest last week in two years.
3. The baltic dry index, used to measure movement of shipping, is at a record low.
4. Texas general business activity, the state that created 40% of all jobs since 2009;  is at a 6 year low.
5. There have been 8 month over month declines in industrial production in the past 12 months, this has never happened before without a recession.
6. 42 north american oil companies filed for bankruptcy.

I could go on and on with this list that itís a bad time to be investing in the market. Now, I am not trying to scare anyone here that the wheels are about to fall off; but there is no denial the global economy is slowing and much more likely to be in a recession within the next two years than continue to grow.

I am sharing this information with the MMM crowd to help you preserve capital as I would think would be an MMM priority

The reason I am suggesting this is not the time to be buying the dip, the bull rally from 2009 has finally failed and itís likely to be headed lower and at an increasing rate.

The reason I believe this is because even though November thru April are typically the strongest months of the market, every target for the market to rally to this year has failed to hit(meaning the market is weaker).

Cast me aside here if you wish, but my goal of this post is to help the mmmíers preserve capital. If you lost money in 2008, you also lost the time you had to spend gaining back that lost money. The market lost nearly 50%, so you had to gain 100% just to get back to even and that took 6 years and that was on the back of QE which by all accounts grew the market faster than normal.

I would suggest reading: realinvestmentadvice.com,  his daily blog post "Technically Speaking: February Stats & Taking Action" and current weekly report "Whew! BOJ Saved The RallyÖFor Now 01-30-16". I also suggest following his portfolio recommendations in his newsletter if you do not have an idea of how to allocate yours in an economic decline(I currently have less market exposure than he is recommending).

If you wish to go off on me and tell the board how wrong I am and me trying to time the market here is a foolís errand, go ahead. Everyone is entitled to their opinion and Iím not a professional money manager. I have given the board my opinion on what would be best for them this year and a solid free reference to follow; best of luck to you all.

LOL.  Wish the OP was still around.  "2015" is vague, but at the beginning and end of 2015, the S&P500 was ~2,045.  Closed at 2,553 yesterday.  So it's up ~25% since 2015.  Even worse, I believe there are posts where the OP says he (or she) was shorting the market, which worked temporarily for parts of 2015.  Supposing they only shorted at 1x (and did not leverage like SDS or SPXU) they'd be down 28+% since 2015 if they never sold along the way.

NASDAQ is up some 40% since 2015.

anisotropy

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #575 on: October 12, 2017, 01:14:14 PM »
lol how did I not see this thread. We also made timing moves during dec-feb (15-16) too as I mentioned in another thread, where I bragged about beating the market in 2016. I must admit that while the sell indicators were very clear, the buy indicators were much more fuzzy, I probably got lucky there.

There are people who had constantly been right on their major top/bottom calls, so far at least. To the general public it is hard to separate them from the so called pundits, arm-chair experts, etc. The funny thing is, these guys are usually quite "low-key" and attribute this achievement to mostly luck, which makes sense, since what they have/know is worth beyond measure. Barry Ritholtz, for example, is one such man.

https://www.bloomberg.com/view/articles/2017-09-06/the-fickle-fortunes-of-market-timing
http://ritholtz.com/major-market-calls/

The thing is though..... luck or randomness is hard to quantify. Buffet himself alluded to it being something more when he wryly mentioned a group of investors in Omaha being able to beat the index year after year. Indeed, pockets of inefficiencies exist in the market, waiting to be exploited. The idea that public, known info is always "priced in" is ludicrous. People are not rational, that's how we make money. No mercy for the wicked, for they are weak.

Which is why for most people buy and hold an index is prob the best strategy. For the others, let the games begin.

Cycling Stache

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #576 on: October 12, 2017, 02:15:01 PM »
Which is why for most people buy and hold an index is prob the best strategy. For the others, let the games begin.

You can lead a horse to water . . . .

I appreciate people like this.  It is how we continue to make money holding index funds.

Your analysis is mistaken because you do not understand how many people bet on the market.  Statistically, some are going to be right, not because they're smarter than others, but because they got lucky.

Examples include lottery winners . . . where odds are 1 in 100 million or whatever, is the winner just "smarter" about picking numbers?

For the 50 million people who submit NCAA brackets to ESPN and 12 manage to pick the first two rounds correctly with 7 different upsets, do you really believe that those 12 people are truly "smarter" about picking the brackets than the other 49,999,988 people, or maybe when 50 million brackets are submitted, statistically, a few are going to get all the picks right?  Have you ever checked to see if it's the same 12 each year?

You cite a guy (don't know who he is, don't care) presumably because he made some calls correctly?  First, if so, why is he not on the Forbes list of richest people?  Second, how many other people picked and got it wrong, and why do you conclude he (or you or whomever) is smarter at picking stocks?  Why aren't they just the 12 of 50 million that happened to get it right for whatever the number of picks are?

Statistics are hard for people because they involve large numbers with which we're not familiar so we typically process them poorly.  The fact that people continue to process those numbers poorly (along with a few other behavioral economics errors) is the primary reason why holding index funds remains a profitable enterprise beyond the standard risk-free returns available elsewhere.

Tyson

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #577 on: October 12, 2017, 02:28:50 PM »
The other thing I see with these "smart money" types is that they usually execute multiple strategies at once.  Often, one of the strategies will work out, while the others don't.  Guess which ones you hear about?  The one that went up 40%.  Not the ones that stayed flat or had losses. 

anisotropy

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #578 on: October 12, 2017, 04:01:19 PM »
Which is why for most people buy and hold an index is prob the best strategy. For the others, let the games begin.

You can lead a horse to water . . . .

I appreciate people like this.  It is how we continue to make money holding index funds.

Your analysis is mistaken because you do not understand how many people bet on the market.  Statistically, some are going to be right, not because they're smarter than others, but because they got lucky.

Examples include lottery winners . . . where odds are 1 in 100 million or whatever, is the winner just "smarter" about picking numbers?

For the 50 million people who submit NCAA brackets to ESPN and 12 manage to pick the first two rounds correctly with 7 different upsets, do you really believe that those 12 people are truly "smarter" about picking the brackets than the other 49,999,988 people, or maybe when 50 million brackets are submitted, statistically, a few are going to get all the picks right?  Have you ever checked to see if it's the same 12 each year?

You cite a guy (don't know who he is, don't care) presumably because he made some calls correctly?  First, if so, why is he not on the Forbes list of richest people?  Second, how many other people picked and got it wrong, and why do you conclude he (or you or whomever) is smarter at picking stocks?  Why aren't they just the 12 of 50 million that happened to get it right for whatever the number of picks are?

Statistics are hard for people because they involve large numbers with which we're not familiar so we typically process them poorly.  The fact that people continue to process those numbers poorly (along with a few other behavioral economics errors) is the primary reason why holding index funds remains a profitable enterprise beyond the standard risk-free returns available elsewhere.

I urge you to read the buffett's speech. He talked about what you mentioned: statistics and more, such as intellectual origin. It is quite dated, but the principles still stand. After all, value still outperforms as far as we can tell. Market inefficiency is real and can be found nearly everywhere.
https://www8.gsb.columbia.edu/articles/columbia-business/superinvestors

Ritholtz was mentioned for his timing calls, not picking stocks. It is important to distinguish these two. As to why he is not on the Forbes list I have no answer, but by you logic, everyone on Forbes list ought to be great stock pickers. The thing with broad market timing is that at best, you will be able to double your rate your return compared to the b&h approach, all other things being equal (ie, no extra leveraging); so really, your potential wealth derived from purely timing the market is quite limited.

I am not here to promote myself or argue with you that timing is a loser's game in general. In fact, I highly doubt I would be able to do so consistently. I merely showed there are people out there who can and have done so successfully over long periods of time. You are more than welcome to dismiss it as luck. In case you do not read his speech in the link I provided, I will quote Buffett for you.

"One sidelight here: it is extraordinary to me that the idea of buying dollar bills for 40 cents takes immediately to people or it doesnít take at all. Itís like an inoculation. If it doesnít grab a person right away, I find that you can talk to him for years and show him records, and it doesnít make any difference. They just donít seem able to grasp the concept, simple as it is. A fellow like Rick Guerin, who had no formal education in business, understands immediately the value approach to investing and heís applying it five minutes later. Iíve never seen anyone who became a gradual convert over a ten-year period to this approach. It doesnít seem to be a matter of IQ or academic training. Itís instant recognition, or it is nothing."

Or in yoda speak, "can or can not, there is no try".


dragoncar

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #579 on: October 12, 2017, 04:10:13 PM »


You cite a guy (don't know who he is, don't care) presumably because he made some calls correctly?  First, if so, why is he not on the Forbes list of richest people?  Second, how many other people picked and got it wrong, and why do you conclude he (or you or whomever) is smarter at picking stocks?  Why aren't they just the 12 of 50 million that happened to get it right for whatever the number of picks are?

.
Clearly a time traveler trying to stay off the Time copís radar

iamlindoro

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #580 on: October 12, 2017, 04:51:43 PM »
Or in yoda speak, "can or can not, there is no try".

I sentence you to 10 rewatchings of The Empire Strikes Back for this misquote.

anisotropy

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #581 on: October 12, 2017, 04:57:46 PM »
Or in yoda speak, "can or can not, there is no try".

I sentence you to 10 rewatchings of The Empire Strikes Back for this misquote.

I was trying to imitate the way he speaks! How should I have worded it, not yoda speak? Or yoda talk?

starguru

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #582 on: October 12, 2017, 05:29:30 PM »
Or in yoda speak, "can or can not, there is no try".

I sentence you to 10 rewatchings of The Empire Strikes Back for this misquote.

I was trying to imitate the way he speaks! How should I have worded it, not yoda speak? Or yoda talk?
The actual quote is “do or do not, there is no try”


Sent from my iPhone using Tapatalk

anisotropy

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #583 on: October 12, 2017, 06:10:05 PM »
I must not be saying it right because I am not getting my point across.

Yes the quote was "do or do not, there is no try." I am aware of that.

What I did was trying to summarize the Buffett quote into a single catch-phrase as if Yoda had said it, hence the "can or can not, there is no try".

I labeled the style "yoda speak", and apparently caused much confusion. I am asking, how should I have labeled it properly?

waltworks

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #584 on: October 13, 2017, 10:26:56 AM »
Look, I don't think anyone will argue that value investing is impossible, people obviously pull it off, including Warren Buffet and his various buddies. But it has *zero* to do with market timing, which usually consists of watching some combination of random metrics (or a whole bunch, if you're really into it) and buying/selling diversified index type holdings. Market timing isn't about getting detailed info about a company, analyzing their assets and business, and buying if the price is right. It's about finding a "pattern" in random data and buying/selling everything at once.

At a granular level, there are always going to be inefficiencies to exploit. At the macro whole-market level... not so much.

-W

anisotropy

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #585 on: October 13, 2017, 02:56:21 PM »
Hello Mr. W,

I must commend you on your attention to details, as you are the first poster to notice I was talking about two things in my original post: stock picking and timing. I wish I knew how to insert clapping hands for you here.

Before I address your concerns, please excuse me as I can't help but to shake my head(s) since no one else had pointed it out even after I had spelled them out in italic in my second post. This may be pre-mature, but combined with the yoda speak confusion, I am beginning to wonder if this was a case of l2r (learn2read) and rpf (reading compre. failure). You will notice I tend to put clues in plain sight quite often, classic psychopath/villain stuff.

Now, regarding what you said. I recall you were one of the people asking me to explain my timing method earlier this year, I am not going to, but I will try my best to explain the way I see things and how I got on this path.

It is true that market timing typically revolves around watching some metrics and many people get destroyed (mis-timed) by following various indicators. However, if you believe that the market moves in tandem with the economy, ie, not just a simple random walk with an up-trend for no physical reason, then you would expect that sometimes (especially during major turning points of the cycle), you might be able to time the market with some success and confidence. Unfortunately, this also means that even if you succeed in timing the market using this method, your outperformance will be limited and any dreams of getting an annualized average return of 25%+ are quite unrealistic.

You said inefficiencies are only present at a granular level, I disagree. We behave irrationally all the time. Irrationality is an energy filed that creates and is created by all living things. It surrounds us and penetrates us; it binds our society together (maybe not the galaxy). At major turning points of the cycle, irrational behaviors beget massive bubbles and shear panic, which actually ties into the value investing principle, albeit by coincidence.

No, I am not talking about cape or any "simple" valuation methods/indicators. I am referring to what Buffett loves to use in his letters and speeches: the intrinsic value. Instead of individual companies, we would be dealing with the entire market (perhaps the economy itself), but the principles are the same or at least very similar.

If you instead believe that the market always moves independently of the fundamentals (underlying economy) in a simple random walk with an up-trend or is pretty much just psychology all the time, I have nothing more to say.

frugledoc

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #586 on: October 13, 2017, 03:02:32 PM »
Hello Mr. W,

I must commend you on your attention to details, as you are the first poster to notice I was talking about two things in my original post: stock picking and timing. I wish I knew how to insert clapping hands for you here.

Before I address your concerns, please excuse me as I can't help but to shake my head(s) since no one else had pointed it out even after I had spelled them out in italic in my second post. This may be pre-mature, but combined with the yoda speak confusion, I am beginning to wonder if this was a case of l2r (learn2read) and rpf (reading compre. failure). You will notice I tend to put clues in plain sight quite often, classic psychopath/villain stuff.

Now, regarding what you said. I recall you were one of the people asking me to explain my timing method earlier this year, I am not going to, but I will try my best to explain the way I see things and how I got on this path.

It is true that market timing typically revolves around watching some metrics and many people get destroyed (mis-timed) by following various indicators. However, if you believe that the market moves in tandem with the economy, ie, not just a simple random walk with an up-trend for no physical reason, then you would expect that sometimes (especially during major turning points of the cycle), you might be able to time the market with some success and confidence. Unfortunately, this also means that even if you succeed in timing the market using this method, your outperformance will be limited and any dreams of getting an annualized average return of 25%+ are quite unrealistic.

You said inefficiencies are only present at a granular level, I disagree. We behave irrationally all the time. Irrationality is an energy filed that creates and is created by all living things. It surrounds us and penetrates us; it binds our society together (maybe not the galaxy). At major turning points of the cycle, irrational behaviors beget massive bubbles and shear panic, which actually ties into the value investing principle, albeit by coincidence.

No, I am not talking about cape or any "simple" valuation methods/indicators. I am referring to what Buffett loves to use in his letters and speeches: the intrinsic value. Instead of individual companies, we would be dealing with the entire market (perhaps the economy itself), but the principles are the same or at least very similar.

If you instead believe that the market always moves independently of the fundamentals (underlying economy) in a simple random walk with an up-trend or is pretty much just psychology all the time, I have nothing more to say.

zzzzz

a tiny percent of people have some kind of skill that enables them to beat the market.

Some people will beat the market through chance, then be deluded that they did it through skill and lose to the market long term.

Most will not beat the market.

It's not worth trying in my opinion, as the odds are stacked against you. 

In summary, nothing you say will make me thing you have any degree of skill/special knowledge/or ability to beat the market.

I might be wrong, but chances are I'm right.

Tyson

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #587 on: October 13, 2017, 03:13:49 PM »
Hello Mr. W,

I must commend you on your attention to details, as you are the first poster to notice I was talking about two things in my original post: stock picking and timing. I wish I knew how to insert clapping hands for you here.

Before I address your concerns, please excuse me as I can't help but to shake my head(s) since no one else had pointed it out even after I had spelled them out in italic in my second post. This may be pre-mature, but combined with the yoda speak confusion, I am beginning to wonder if this was a case of l2r (learn2read) and rpf (reading compre. failure). You will notice I tend to put clues in plain sight quite often, classic psychopath/villain stuff.

Now, regarding what you said. I recall you were one of the people asking me to explain my timing method earlier this year, I am not going to, but I will try my best to explain the way I see things and how I got on this path.

It is true that market timing typically revolves around watching some metrics and many people get destroyed (mis-timed) by following various indicators. However, if you believe that the market moves in tandem with the economy, ie, not just a simple random walk with an up-trend for no physical reason, then you would expect that sometimes (especially during major turning points of the cycle), you might be able to time the market with some success and confidence. Unfortunately, this also means that even if you succeed in timing the market using this method, your outperformance will be limited and any dreams of getting an annualized average return of 25%+ are quite unrealistic.

You said inefficiencies are only present at a granular level, I disagree. We behave irrationally all the time. Irrationality is an energy filed that creates and is created by all living things. It surrounds us and penetrates us; it binds our society together (maybe not the galaxy). At major turning points of the cycle, irrational behaviors beget massive bubbles and shear panic, which actually ties into the value investing principle, albeit by coincidence.

No, I am not talking about cape or any "simple" valuation methods/indicators. I am referring to what Buffett loves to use in his letters and speeches: the intrinsic value. Instead of individual companies, we would be dealing with the entire market (perhaps the economy itself), but the principles are the same or at least very similar.

If you instead believe that the market always moves independently of the fundamentals (underlying economy) in a simple random walk with an up-trend or is pretty much just psychology all the time, I have nothing more to say.

zzzzz

a tiny percent of people have some kind of skill that enables them to beat the market.

Some people will beat the market through chance, then be deluded that they did it through skill and lose to the market long term.

Most will not beat the market.

It's not worth trying in my opinion, as the odds are stacked against you. 

In summary, nothing you say will make me thing you have any degree of skill/special knowledge/or ability to beat the market.

I might be wrong, but chances are I'm right.

IME, one of the worst things that can happen to an investor is to try to time/guess the market and be right.  That leads them to the idea that they have this whole thing "figured out" and leads them to more risky behavior later, and with higher sums.  Of course losses are inevitable (since it really was luck in the first place), but the investor cannot accept that (having built up quite the image of themselves as genius market timers or stock pickers).  So they keep taking bigger risks hoping one day it will all work out.

If you notice, this is the exact same thought process as another group of people - gamblers.  And we all know that gambling is a losing proposition because the odds are all on the house.  But some people delude themselves into thinking that they have a system that lets them beat the odds.  And early/easy success only feeds that delusion.

Its the same for the market timers.  The BEST thing that can happen is that someone tries it early and fails.  And fails again.  Then they are much more likely to admit they don't have any special insight and they should just buy and hold, like the rest of us.

anisotropy

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #588 on: October 13, 2017, 03:27:19 PM »
no problem. I've already given the reply regarding luck/chance in my earlier posts (buffett speech link where he talked about it). One group of us is bound to make money off another, right? :)

sol

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #589 on: October 13, 2017, 03:36:55 PM »
If you notice, this is the exact same thought process as another group of people - gamblers.

Sure, with the key caveat that stock investing is different from casino gambling in that as long as we have a steady influx of new players, there is genuinely money to be made in the stock market.  The house still gets a cut, but the pots keep growing.

And I think this is the most overlooked factor in market analysis.  You don't need to deep dive into a particular company's fundamentals.  You don't need any chartist bullshit.  You don't care about seasonal earnings reports or the trade deficit.  You only care about how much capital is currently in search of investments.  When more money floods into the market, the index goes up.  When people pull out the market drops.  It's a popularity contest, not an analysis of risk vs reward.

So of you really want to prop up the market, you don't care what the Fed does or what the president tweets today, you only want to put more money into the hands of people who buy stocks.  That can mean university foundations (dead wealth) or it can mean raising middle class wages enough to allow normal families to start saving for their retirement.  As a policy goal, you grow the index by convincing people to invest.  Bogle grew the market.  Betterment grows the market.  MMM grew the market.  It's the people who convince money to go in search of profit that push up the index, not anything at all about the underlying economy. 

The market/economy correlation, though popular, isn't nearly as strong as we like to think it is, and is generally correlative instead of causative.

Millennial are saving a bigger percentage of their income than any generation in American history.  That's why I think the future of the US index is bright.  As long as they keep adding more money to the market than boomers withdraw, the index will continue to climb.
« Last Edit: October 13, 2017, 04:02:26 PM by sol »

Eric

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #590 on: October 13, 2017, 03:54:51 PM »
I must not be saying it right because I am not getting my point across.

Yes the quote was "do or do not, there is no try." I am aware of that.

What I did was trying to summarize the Buffett quote into a single catch-phrase as if Yoda had said it, hence the "can or can not, there is no try".

I labeled the style "yoda speak", and apparently caused much confusion. I am asking, how should I have labeled it properly?

I prefer using the phase "to bastardize a [insert quotable person here] quote".  Then people know you're not trying for the exact quote, but adapting it to your situation.

For example:

To bastardize a Yoda quote, "timing the market you can't."

anisotropy

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #591 on: October 13, 2017, 05:51:11 PM »
Sol, always good to read your replies. What you described (the buying and selling of the market itself) relates to "market breadth". Much research had been done on that subject, unfortunately I don't know enough to discuss this with you. :(

I agree the market/econ link is weak most times..... except at major turning points, at least that has been my observation and experience.

Thanks for the suggestion, Eric, it's duly noted.

waltworks

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #592 on: October 13, 2017, 08:11:00 PM »
You said inefficiencies are only present at a granular level, I disagree. We behave irrationally all the time. Irrationality is an energy filed that creates and is created by all living things. It surrounds us and penetrates us; it binds our society together (maybe not the galaxy). At major turning points of the cycle, irrational behaviors beget massive bubbles and shear panic, which actually ties into the value investing principle, albeit by coincidence.

I should have been more clear: there are certainly inefficiencies at a macro level. They are not inefficiencies that can be consistently and profitably used for anything, however. The market can go to P/E of 100 and stay there for a while, or it can crash at P/E 15. You don't know in advance, you will never know.

So you are correct, and (IMO) I am also correct. At a macro level, there are all sorts of irrational herd behaviors in effect - and unfortunately, you can't do squat to predict when they will begin/end in any useful way. It is, indeed, a random walk with an upward (humanity gets better at doing stuff) trend.

-W

theolympians

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Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #593 on: October 14, 2017, 11:28:54 AM »
There will be a "correction" at some point. "If I predict it everyday I will be right at some point in the future....."

While buy and hold, dollar-cost averaging is not sexy, it is a relatively safe bet. When a correction comes, pump more money in and buy stocks and funds at a discount......Do so until the market returns and you are FI. Just my two cents.....