The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: sol on June 07, 2016, 04:28:13 PM
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Trying to time the market is a rookie investor mistake, but sometimes it happens by accident. Please share your most fortuitous timing wins.
Tis on my mind because I was buying a little vde on the side during the oil crash. My best purchase was an intraday low on Jan 25 for $68.76, which today is up to $97.19. I made a 42% return in only 4.5 months! I'm rich! Let's see, that works out to... $28.43 in profit on my 1 share purchased that day. Well shit.
Anybody else?
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RDS.B bought at $37.18 on January 21st, up 40.17%. Shell is extremely volatile, though, so I hold little hope it'll maintain that level for any length of time.
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I bought two shares of AAPL when they dropped 40% to $450 in June 2013. I didn't know much about investing or valuing businesses, but the P/E was pretty low and they had enormous cash reserves. YOLO.
It's up 50% now, not including dividends received since. But at one point I had an unrealized 100% return!
Expecting a call from Berkshire any day now.
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ISRG was always a lot of fun. The share price would predictably go way up every quarter, and after the quarter ended it would drop in price a great deal. Not sure if it's still doing that, but for awhile there it was. Buy when it plummets, wait 'til the end of quarter and sell, then buy again when low.
:)
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Saw a smaller mid cap with what looked like a cheap bet against the herd. There were reports of a tax dispute over some accounting with a foreign government, which a short hedge fund blew up into accounting irregularities that would be the next Enron. Calls were dirt cheap while puts were very pricey. Huge short interest in the stock and it was trading in a narrow band with low volatility which made options even cheaper.
I took some fun money and bought some calls with expiration five months in the future, which would hopefully be long enough for the accounting to be figured out. Worst case I lost my fun money. Best case I gained probably 500%. Well, two days later the stock broke out the top of the channe it was trading in for months, shorts panicked, and I sold out in the ensuing short squeeze for a quick 200% gain.
Dumb luck. Company eventually got a takeover bid and I would have made only 40%.
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I've been riding the VDE train since early February. I'm glad I decided to long this EFF when I purchased...crazy gainz so far brahs 👊👊
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Initiated a 200 share position in NS on 1/15/2016 and I'm currently up $4,251.91 for a 61.3% return and still going.
I added to my OKE position and it's up 37% since mid January.
I wouldn't call the buys market timing as much as realizing that the price of oil simply could not stay in the 20s long term. I didn't think that the recovery would happen so quickly, but the knowing what it costs the major players to pump a barrel of oil, I knew that international game of chicken that they were playing wouldn't last more than 6 - 12 months. There's simply too much money involved.
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CLF, I purchased some shares around $2 three months ago, current price is around $5. Only purchased 50 shares, so not quite ready to quit yet.
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I sold all my stocks in early 2008, basically at the top. Great timing, eh?
Of course, I didn't buy back in until 2011, missing the 2009-2011 runup.
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I waited for a dip in the market and invested some when it happened. But looking back, the problem is how much would that money have made if it wasn't waiting in cash? Beating the market is also about viewing your extra cash as a lost opportunity.
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I was pretty much 100% in gold and silver up to mid-2011. Stock markets crashed, gold and especially silver were skyrocketting. It made me nervous. I went half-gold, half-stocks at this very moment. I had acquired a part of this gold & silver below market value, and dumped some gold and all my silver almost at the top, buying cheap stocks instead. I almost doubled my net worth this year. Pure luck, though, but you bet I learned the values of diversification and rebalancing.
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I bought a cheap foreclosure at the bottom of the market. Haven't sold it yet, but would make a lot. I also refinanced it shortly after the purchase and rehabbing a bit, and got an insanely high appraisal. So I did a cashout refi and bought VFIAX with it. The VFIAX gains on that cashed out portion ended up being 50% of the original purchase price. Too bad my house cost under $100k and not several million :)
I think 2 years ago on January 2 when I make my annual Roth contribution, the market was down that day, which is good because I get the COB price. I remember that because it seems to me that the opposite is usually true and I always get irritated that I'm buying 1% fewer shares than if I could have contributed the prior market day.
Sometimes the market goes down on Friday when my autoinvesting occurs. But it probably goes up more frequently than it goes down.
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I purchased MGT @ $.25/share a few months ago, it popped up to $5/share a few weeks ago!
I only dumped about $100k of my portfolio into it (50% of total portfolio). I should have listened to McAfee over dinner when he told me he was going to become chairman and CEO.
Hindsite is 20/20, especially when you are dreaming!
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In the few years pre-2008, I was almost solely invested in Canadian "real return bonds". When the markets tanked the bonds shot up in value 17%! Around the same time I began reading about couch potato index investing and diversification, so I began that strategy and (luckily) bought all the different equity indexes at lows. And as we know, those recovered well. It wasn't intentional timing on my part though and when I tell people the bulk of my stash is due primarily to bonds they look at me like I have three heads. :)
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I was pretty much 100% in gold and silver up to mid-2011. Stock markets crashed, gold and especially silver were skyrocketting. It made me nervous. I went half-gold, half-stocks at this very moment. I had acquired a part of this gold & silver below market value, and dumped some gold and all my silver almost at the top, buying cheap stocks instead. I almost doubled my net worth this year. Pure luck, though, but you bet I learned the values of diversification and rebalancing.
Awesome! I dumped 80% of my net work into gold and silver back in 2013.......you can imagine the rest of that story.
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Is this for real? (or trolling.)
I purchased MGT @ $.25/share a few months ago, it popped up to $5/share a few weeks ago!
I only dumped about $100k of my portfolio into it (50% of total portfolio). I should have listened to McAfee over dinner when he told me he was going to become chairman and CEO.
Hindsite is 20/20, especially when you are dreaming!
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Is this for real? (or trolling.)
I purchased MGT @ $.25/share a few months ago, it popped up to $5/share a few weeks ago!
I only dumped about $100k of my portfolio into it (50% of total portfolio). I should have listened to McAfee over dinner when he told me he was going to become chairman and CEO.
Hindsite is 20/20, especially when you are dreaming!
I think 2Birds1Stone is jokingly saying "Oh, I made so much money! ...but not really, because I cannot see the future."
I don't think 2Birds would plunge 50% of his portfolio into a penny stock. I also think he probably doesn't know famous McAfee security software creator/founder John McAfee well enough to have a casual supper with him.
[Edited to fix duplicate word.]
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My big fear with stock picking is that a stock comes to my attention because it's in the news, which means there's already a lot of hype driving the stock higher. I'm considering experimenting with arbitrarily-random lists of stocks, such as all of the single-letter call symbol stocks to try to break free of this.
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which means there's already a lot of hype driving the stock higher
Or lower if the news is bad. In the case where the stock is in the news, the investing opportunity is determining if the hype is bunk - if it is, you invest by doing the opposite of what the herd is doing (see JetBlast's post). I suppose if you simply want to gamble in the market timing game, you could just choose some random stocks to do it with. This thread is more about people looking for undervalued companies to buy and hold who happen to catch one just before a good run up in value.
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Is this for real? (or trolling.)
I would love to be corrected, but I'm pretty sure a story about turning 100k into 2 million dollars with a single bet would have come out before now.
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My big fear with stock picking is that a stock comes to my attention because it's in the news, which means there's already a lot of hype driving the stock higher. I'm considering experimenting with arbitrarily-random lists of stocks, such as all of the single-letter call symbol stocks to try to break free of this.
Two economists are walking down the street. One says to the other, "Hey, is that a $20 bill stuck to the sidewalk?" The other says, "Nah, can't be. Someone would have already picked it up."
I bought a small cheap house (now a rental property and nearly paid off) at the bottom of the market in 2012, and a relative gas guzzler second car (20MPG highway) for cheap right before gas prices fell in 2014. Both were more luck than planning.
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Is this for real? (or trolling.)
I would love to be corrected, but I'm pretty sure a story about turning 100k into 2 million dollars with a single bet would have come out before now.
I was totally joking, I figured the "hindsight is always 20/20, especially when you are dreaming" remark would have been a dead giveaway lol!
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More of a foreign currency market thing, but I inadvertently made all sorts of money when the ruble fell while I was working in Russia (where I traveled with chunks of cash strapped to my body).
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More of a foreign currency market thing, but I inadvertently made all sorts of money when the ruble fell while I was working in Russia (where I traveled with chunks of cash strapped to my body).
Some of my friends work in developing countries and arrive with 3000 $1 bills strapped to them (they have to pay workers and contractors and such--not just living expenses). That's a lot of bulk.
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I became mortgage free at the bottom of the oil crash and maxed out my TFSA with the extra money, plus bonuses and tax refunds. Thats turned out well! Canadian economy was in the pits, oil crash, forest fires, etc. buy! Buy! Buy! Im up 8.7% over the 2016 TFSA maximun contribution limit.
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More of a foreign currency market thing, but I inadvertently made all sorts of money when the ruble fell while I was working in Russia (where I traveled with chunks of cash strapped to my body).
Some of my friends work in developing countries and arrive with 3000 $1 bills strapped to them (they have to pay workers and contractors and such--not just living expenses). That's a lot of bulk.
I wouldn't hesitate to call most of Russia a developing country, but Moscow also has an obscene cost of living, which is a weird/unfortunate combo. Moscow businesses were just starting to accept Euros in addition to dollars and pounds for big payments, I found I couldn't pay for much of anything in rubles (obviously groceries, clothing, etc was fine).
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Bought WDC based on value analysis at just over $35
Up about 40% in a couple months! almost $50
I would not buy it at this price - time to sell I guess ;)
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I sold all my stocks in early 2008, basically at the top. Great timing, eh?
Of course, I didn't buy back in until 2011, missing the 2009-2011 runup.
Ditto, only I bought back in in early '09. I missed a little bit of the bounce but caught most of it.
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Exercised some insignificant stock options in 2011 at just about the most-recent high of that company - they vested and happened to be in-the-money at just about the same time. Woohoo for $97 (total, before tax)!
Co-worker decided to wait, and the options quickly went down and haven't sniffed the strike-price since. We no longer work there - contract wound up with a different middle-man and so did we.
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On May 16th I bought Apple at $92.77 because of Berkshire news. I sold it May 31st for $99.86. A two week 7.6% gain was irresistible. Sorry Cramer, I traded Apple. Wouldnt have been possible without Robinhood instant. Thanks Robinhood!
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On May 16th I bought Apple at $92.77 because of Berkshire news. I sold it May 31st for $99.86. A two week 7.6% gain was irresistible. Sorry Cramer, I traded Apple. Wouldnt have been possible without Robinhood instant. Thanks Robinhood!
Why's that?
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On May 16th I bought Apple at $92.77 because of Berkshire news. I sold it May 31st for $99.86. A two week 7.6% gain was irresistible. Sorry Cramer, I traded Apple. Wouldnt have been possible without Robinhood instant. Thanks Robinhood!
Why's that?
Because I didn't have the money in my Robinhood account. They upgraded my account to instant a couple of months ago. So when I transferred money at opening bell on May 16th I was allowed to buy immediately without waiting for funds to clear. Thats why.
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Trying to time the market is a rookie investor mistake, but sometimes it happens by accident. Please share your most fortuitous timing wins.
Tis on my mind because I was buying a little vde on the side during the oil crash. My best purchase was an intraday low on Jan 25 for $68.76, which today is up to $97.19. I made a 42% return in only 4.5 months! I'm rich! Let's see, that works out to... $28.43 in profit on my 1 share purchased that day. Well shit.
Anybody else?
Have you sold VDE at the current value to lock in your gain? Successful timing requires two discreet events: getting in and getting out. Getting in low is a good get, but you've got to sell high to realize the victory.
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After a year or so of contemplation, and reading the likes of Bill Bernstein, I decided to move 8.3% of my tax sheltered accounts to a gold miner stock ETF in October as a permanent addition to my allocation*. I have not been making much in the way of ongoing contributions to it though, because it is mostly taking care of itself.
*Of course, if it gets too high I may reduce it to 5%.
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I went to 100% cash by March 2007. I saw a lot of things I didn't like and got out at a great time.
I wasn't all the way back into the market until mid 2013, and missed out on a lot of gains.
I made a lot more money in my job over that time, and saved and invested it in index funds. I stopped thinking and investing in individual stocks.
It's been a fortunate learning experience - I had some good instincts but ultimately made my own luck by focusing on what I could influence.
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I went to 100% cash by March 2007. I saw a lot of things I didn't like and got out at a great time.
I wasn't all the way back into the market until mid 2013, and missed out on a lot of gains.
I made a lot more money in my job over that time, and saved and invested it in index funds. I stopped thinking and investing in individual stocks.
It's been a fortunate learning experience - I had some good instincts but ultimately made my own luck by focusing on what I could influence.
I moved my mid caps to bonds. Now Im mostly total bond index with some small caps. I will let the small caps run. Im just waiting for a correction. I don't expect 2008. I would like a 10% drop. I think there is a good chance even if its temporary before the end of summer. Thats about as far as I will go with predictions. Its a falcon 9. I expect the first stage to return to earth but not crash.
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I bought JPM in 2002 and have an 82% unrealized gain.
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I moved my mid caps to bonds. Now Im mostly total bond index with some small caps. I will let the small caps run. Im just waiting for a correction. I don't expect 2008. I would like a 10% drop. I think there is a good chance even if its temporary before the end of summer. Thats about as far as I will go with predictions. Its a falcon 9. I expect the first stage to return to earth but not crash.
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SMH.
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I moved my mid caps to bonds. Now Im mostly total bond index with some small caps. I will let the small caps run. Im just waiting for a correction. I don't expect 2008. I would like a 10% drop. I think there is a good chance even if its temporary before the end of summer. Thats about as far as I will go with predictions. Its a falcon 9. I expect the first stage to return to earth but not crash.
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SMH.
The last time this was predicted with had a health 5%+ increase in the markets over the following months. I wouldn't hold my breathe unless I had a crystal ball.
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I bought JPM in 2002 and have an 82% unrealized gain.
Is that a market timing win? Depending on when in 2002, the S&P500 is up 150% since that time.
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i moved a significant portion of my 401k to jnj in april at ~112 and it just crossed 117 today
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2009 GE purchase at 8.90/share for 125 shares. My total gain on it is nearly 240%. I was not in the "index funds are awesome" crowd at the time. So timing? Not sure. But I did put in more than I had been putting in to my account in the past.
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Left one job in 2006 and took a year off. Began next job in August 2007 and started TSP contributions then. By happenstance, I began the process of rolling over my 401k from my previous job into my TSP at the end of the summer in 2008, so I happened to sell everything around August and then bought new funds in November 2008, avoiding the biggest part of that market drop by sheer luck.
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Timing my 457b is working out. It just updated.
(http://i820.photobucket.com/albums/zz124/azwolf25/Screen%20Shot%202016-06-09%20at%208.57.27%20PM_1.jpg) (http://s820.photobucket.com/user/azwolf25/media/Screen%20Shot%202016-06-09%20at%208.57.27%20PM_1.jpg.html)
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I was just learning about investing last year and had our savings in Vanguard total US stock index and in Total US bond index and was reading about appropriate ratios. In August of 2015, I moved half of all my assets to the total Bond Market just before stocks tanked. A few weeks later I realized that I should not be so much in the bonds and since the stock market fell in the mean time, I shifted 30% back to stocks. It was a total Forrest Gump move that netted us around 8% gain on the money that went from stocks to bonds and back to stocks.
Now I just leave it all alone and only throw more on the pile. -Ap
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I bought some DVN at $20 in February.
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Anyone happen to buy LNKD Friday?
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I bought a house in Denver in mid 2011 for $220k with a mortgage at 3.75%. The Denver market has been going crazy for the past 2 years and I could sell today for $310k easy. We're hanging on to it as a rental so far, but will probably liquidate it next year if we don't decide to move back in. I'm not convinced job growth is keeping up with housing growth.
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My wife works for General Electric. In October 2015, she was offered a 5% premium to convert the GE stock in her 401(k) to shares of their credit spin-off Synchrony Financial. This meant that she and I got to be part of the greatest one-day drop in a publicly traded company yesterday when SYF fell 15% in one day. Perhaps I've got the wrong thread?
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This meant that she and I got to be part of the greatest one-day drop in a publicly traded company yesterday when SYF fell 15% in one day. Perhaps I've got the wrong thread?
Don't know about that...ENRON stock prices fell >20% in a day multiple days, with its greatest fall being 85% in a single day. Or are you referring to another metric other than % change?
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This meant that she and I got to be part of the greatest one-day drop in a publicly traded company yesterday when SYF fell 15% in one day. Perhaps I've got the wrong thread?
Don't know about that...ENRON stock prices fell >20% in a day multiple days, with its greatest fall being 85% in a single day. Or are you referring to another metric other than % change?
Yeah. SCTY and SUNE have had more than 20% drops in a day multiple times in the past year. The entire market dropped 20+% on one day in 1987.
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BRK.B at $74.62 in 2011 now $141.52. Perfect example of the only way my market timing wins: buy it and forget it. I have no short-term wins (perennially buy at "market highs", time is my only friend).
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I bought a house in Denver in mid 2011 for $220k with a mortgage at 3.75%. The Denver market has been going crazy for the past 2 years and I could sell today for $310k easy. We're hanging on to it as a rental so far, but will probably liquidate it next year if we don't decide to move back in. I'm not convinced job growth is keeping up with housing growth.
The jobs are there, but the wages not so much. It does have to end somewhere.
DH has a great story: he was in the military and a friend was selling a life insurance/investment product, so he bought some to be nice (probably whole life insurance which was dumb for a 20 yo single guy with military coverage, but anyway). Forgot about it when he left the military. A few years later, the people running the fund tracked him down to say that they were going to start charging inactivity fees on his account. He says "well hey, cash it out then" thinking there wasn't much there because he hadn't invested all that much. Well, he got a check for several grand, because this was the top of the dot-com boom! We were trying to figure out what to do with it as a couple of very green, just starting out, "investors". I was reading YMOYL at that time and said well hey, why don't we go with a 30y Treasury? DH found a broker, who thought we were stupid and crazy to buy a bond at "historically low" 5.25%. Hahahahahahahaha! You can't touch even half that these days if a non-volatile, extremely safe, guaranteed return on a liquid asset is your goal. My first lesson that financial advisors/brokers/etc probably have as little idea of what lies ahead in the market as I do. Totally awesome way to learn that, rather than the other way around!
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I suspect buying bonds of financial companies in 4Q 2008 isn't "fortuitous", it's properly called "playing with fire". I "timed the market" because every sign I could find was that the bond market was completely dysfunctional. I read lots of financial statements, watched for inefficiencies in the bond market (it's much less efficient than stocks, so when no one wants to buy and someone needs to sell - perhaps due to a margin call - you can find crazy offers). It was risky, and I knew what I could and couldn't risk. I wouldn't advise anyone to "try this at home".
I bought a bunch of bonds, but one was particularly a "risk play" that I fully expected to blow up in my face. I think we know the history, but there was pretty much an expectation that certain companies would implode. Ambac and MBIA as major bond insurance companies were among those on death watch (not as bad as AIG, but still). I purchased a small amount (insignificant in my overall portfolio) of MBIA bonds in November 2008 ...for 28c on the dollar.
Within about 4 years, I received back my initial investment in interest payments. I'm < 1 year from that happening yet again. In the remaining 6 years, it will happen a third time, and then I will receive a principal payment equal to more than 350% of my initial investment. Assuming I held cash after the interest payments, I will make ~550% profit over 14 years... Yield to Maturity on the bond was something like 32%. ...but I didn't do cash, a lot of that had significant opportunity to be invested in the market since it was received back so early in the 14 year investment horizon... so the overall return is even more obscene.
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BRK.B march 2009 @ 48. now 140 - a "3bagger" on an S&P500
VSIAX same time veerrry close to the exact low.
However, I had blown all my free cash by then by buying lots of stock/vanguard on the way down.
So the two above are the smallest transactions I did at that time.
Stll haven't sold, so they don't really qualify.
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At the time of the last crash I lived in France.
Was buying on the way down some Axa (French insurance company).
Averaged all the way down to 10
€ batch was bought at 5.88€, now worth around 21.
Since I tried to time the market I sold them all at 15.5, missing in a ton of gains
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I had 2 lucky timing experiences. Back in 2010 I had saved about $20k, sitting in my TFSA and regular investment account from working 80 hr weeks in construction. I went through a major career change, moving, etc so I decided to invest in stocks. I bought $10k of Potash Corp at around $31 (split adjusted) and sold about 2 months later for $50 after BHP Billiton put in a massive offer for the company which was ultimately rejected by the Canadian government. With the other $10k I bought a penny stock Mart Resources, a small oil company exploring in Nigeria, for around $0.25 and sold just under a year later for around $0.70. After selling Potash I invested that money in Mart Resources as well (talk about diversification haha!) for $0.35 a share and sold with the rest for $0.70. I ended up pulling all my money out of the market for a downpayment on our house and was able to scrape together enough money to avoid needing mortgage insurance. Essentially in under 1 year $20k became $60k!
In the long run, I would have been better to rent and move to index investing at that time. Our house has not really gone up in value at all since we bought spring of 2011.
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I get an annual bonus in March of each year and I always have extra $ put into the 401k on the bonus check (about 3-4 times the regular 401k deposit). In 2009 it was deposited in index funds in my 401k on March 10, 2009- the very day after the absolute bottom of the market. That bigger contribution has had the wind behind its sails ever since.
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Picking up decent stocks when they are "reasonably valued" or especially a long-standing company which just had a bad quarter is my specialty. :)
Well, not really a specialty, I just happen to buy after those events often. Some have paid out well since then, and others are still waiting to improve.
XOM in low $70s, CSCO is mid $20s, MSFT in the low $40s, ADM in mid-$30s, AAPL way back when in the mid $400s, and so on.
I generally try to wait for pullbacks when certain names get too rich. DIS at $120+ and NKE at $65+ were two stocks I wanted to own but which haven't pulled back a ton until recently. Finally DIS ~$100 and NKE ~$55. Not dirt cheap, but big pullbacks after mildly disappointing earnings.
Truthfully, there are also some that haven't worked out so well. KMI, NOV, AXP and a handful of others have gone down 10%+ since my first entries. I may add to some, but energy has just taken massive beatings and can't win them all!
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This said, I noticed I have an impressive track record of beating the market in the last three years:
(http://uploads.tapatalk-cdn.com/20160616/15327dc7b6207ca290efe2c8b446daac.jpg)
This is my "fun" account, approximately 15% of my total assets.
Over performance is mainly based on two things:
1 bought a lot of Amazon with an average buying price of $330
2 bought energy stocks on the way down
What I would not like to mention is that I sold Amazon on average at $550, missing on a ton of gains.
While I am against market timing, I will sometimes buy some very solid companies after an unusual drop.
I was able to almost catch the bottom on DD (DuPont), bought at $49, for example.
Those I usually hold forever except when valuations become stupid (i.e. Amazon that now is worth more than Walmart).
Possibly just luck (I was lagging the market for a while), but I think being contrarian can pay off at times, and if you buy only / mostly huge established companies the risk of getting hurt are very low.
My holdings include stuff like PG, RDS, PFE, WMT, etc
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I'm tiring of individual stocks. Having to check them all the time is just wearing me out. And I miss the big drops anyway because the big money moves before I can.
Sent from my iPad using Tapatalk
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We will see tomorrow...
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We will see tomorrow...
I was waiting for someone to post this. Did you read Soros' take on this?
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nope. who's Soro?
I happened to sell my EAFE index on Tuesday and transfer it from my 0.6 MER work plan to my 0.2 self directed ETF account. Will buy back as soon as I have the cash in my account. Crossing fingers for a crash and quick mailman delivering the check.
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Unloaded $322,000 of TSP C- and S-Funds yesterday ahead of the Brexit panic selling. This represents only a fraction of my holdings, but it is a considerable sum that won't fall off the cliff.
On the other hand, the sun came up this morning and the birds are chirping, so the world didn't come to an end. I will let the dust settle and get back in maybe as early as next week. Would be nice to hold at least 10% more shares than before.
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This is not a shining day for my SCHF holdings, I'm sure. That said, it's payday so hopefully my 401k contribution posts after market open.
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Several years ago, I was home with family on a Christmas holiday and the weather was terrible. So, I decided to make a day trade to pass the time. Bought Amazon and sold it within 4 hours and cleared 21k. Sold it, bought a new minivan for the family. Sure, that was nice but if I had held the stock, I could have bought a fleet of them today.
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nope. who's Soro?
I happened to sell my EAFE index on Tuesday and transfer it from my 0.6 MER work plan to my 0.2 self directed ETF account. Will buy back as soon as I have the cash in my account. Crossing fingers for a crash and quick mailman delivering the check.
George Soros, of "broke the bank of England" fame. There's an interesting book on it called "More Money than God" and a shorter article here: http://priceonomics.com/the-trade-of-the-century-when-george-soros-broke/ He made billion(s?) on Black Wednesday by essentially forcing the Bank of England to exit an exchange rate mechanism they had entered in to two years prior, after pouring tens of billions of dollars in to the pound (and raising interest rates to 15% in one day) to artificially (and unsuccessfully) raise the pound's valuation during the course of Black Wednesday.
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I will list a market timing "fail".
In 2008 I "knew" shares for a company would rise.
I talked with my wife about buying 5k EUR worth of it but we decided to not do it because those were money for building our house.
Now those shares rose 20X in 9 years.
Even in the short time the shares doubled in 3 months...
EDIT: I saw many mentioned the stock I did not disclose - I am talking about Amazon :).
And I had insider information...
We are not sad/mad, as we are not stock market players so we just stuck to what risk tolerance we had :).
One more: this month Nokia shares dropped 10% and I "knew" they would rebound, I did not buy as I am only buying individual stocks at the beginning of the month (80USD worth of individual stocks).
They rebounded, I will buy 80USD worth of it tomorrow :).
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Buying our house in the summer of 1998 was perfect timing. Values started taking off just months after our purchase. Another one was putting money in prosper loans instead of the market in 2006-2008. The loans ended up close to a wash due to recession, but I missed out on some market downturns. Also, selling a big chunk of my SP index fund in summer of 2008 to make a separate loan that's worked out well.
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Bought TSLA in the 20's, sold on the way up to the 40's that year, solid gains. I had 10k in, could have turned into 100k if I held. That's something I really appreciate about the index funds, takes a lot of the emotions and shoulda couldas out of investing.
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Everyone bought CPXX at $1.25 in February of this year and sold it at $30 when it got bought out right? Yeah me neither.
I bought PWAV or something like that at the end of '08 for $0.50. It quickly went down to $0.25. Think I bought $100 worth. Then I sold it at $4.50 end of 2009 or beginning of 2010. I only sold because it stopped going up every day like it had been doing earlier. I was lucky cause I think they are out of business.
My grandpa has stocks worth probably millions in 2000. He was going on a trip around the world and didn't want to be checking his stocks during that time. He sold everything in the first quarter of 2000 and returned when everything went to crap. He decided he'd wait it out and bought a bunch of energy stocks near the bottom of the bear market. It's better to be lucky than good! In '08 he wasn't so lucky and just stopped looking at his statements for a few years. He did buy some BAC near the bottom though.
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bitcoin. Nuff said.
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In 1998 I knew a guy at the gym who offered me 100 shares of his soon to be IPO company, can't recall the name. I didn't really know him but he said he had these friends and family shares and didn't know many folks (sad). I was in my mid 20s so why not? That $1400 turned into $22K in three months...(that's $14 a share to $220). Wow I thought I was hot shit, and so smart for selling.
Two months after that I got another hot tip. Mediaplex was its name, some kind of random technology involved in browser ad delivery. Hey it was the late 90s in Silicon Valley, can't lose right? Rode that one down to $1...lost all my big winnings.
The poor guy who gave me the f&f really had it bad, he actioned his options without selling and took the double whammy of losing the stock value and still having a huge tax bill. I felt pretty lucky to have learned the lesson without losing much principle.
I wish I could say I started right away on index funds after that, but that took a while longer for me to clue into.
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I'm continuing to play with fire by owning employer's stock in teh 401(k). Working for a Utility company really rewarded me this past week with the Brexit kicking everything BUT utilities for 2 days.
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Buying the house! Oct 2009.
Houses don't go 'on sale' in TX very often, pretty stable.
Paid 175, now worth 240-250
Of course I've not sold it, so 'unrealized' gain.
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bought my house in 08 for 201k sold it for 240k this year. considering it didnt actually cost 201k to buy it since it was mortgage at 3% with only 5% down and no PMI... it was around a 120% ROI ... then bought our new house for around 430k this year its estimated around 520k right now based on the market ... a unique situation that lead to a great deal.
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I'm continuing to play with fire by owning employer's stock in teh 401(k). Working for a Utility company really rewarded me this past week with the Brexit kicking everything BUT utilities for 2 days.
similar for me, but i moved half what i had in company stock to the broad market after brexit and two days later moved it back after it went up 6.5 % :) company stock had also gone up a decent amount tho, so prolly only a ~2% diff on the funds :P
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In 2008 I "knew" shares for a company would rise.
[...]
And I had insider information...
Wait, wouldn't that purchase have been illegal in such circumstances? Not that I understand the implication, but it seems like it's better for you and the person who tipped you that you stayed away?
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Well, I just went to cash in my 457. Part of that is a huge deposit is coming. But its cash right now. All of it.
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Seems like a great idea
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now would be a good time to market time a refinance to a new 30 year extremely low fixed rate. my broker that does no costs is at 3.25% and its dropping.
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Sold some bonds the 2nd day of Brexit and put them into a leveraged index fund. Just sold this morning for ~16% increase. Put the money back into the bond fund.
Also, about to buy a house. If one would just come on the market in our ideal location location location. Then we'd take advantage of the sweet sweet low interest rates for the next 30 years.
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Bought house in 2009 for $67k. Currently valued around $130k
Bought house in 2010 for $93k. Currently valued around $155k
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Accidental good timing? We sold our very expensive home in New Jersey, closed in June 2008. 1/4 of the proceeds went to our current home in NC. I held the substantial remaining balance in cash, was so worried about the financial system at the time kept under FDIC maximum at banks and moved my money market mutual fund cash to a US Treasury money market fund (Before the Fed guaranteed all of them). This let me weather the downturn and I very slowly started buying stocks in 2009 and 2010. Didn't go all-in, didn't buy the lows, but accidentaly going to cash at the highs was very lucky.
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I definitely think that timing the market wins. My 401k pretty much tracks the S&P500 with a little bit of bonds (~5%) mixed in and everything I put in goes straight into the S&P fund. However, my employer pays me $1.45/hr into my 401k and that gets put into my 401k as cash.
That cash just sits there until I see an opportunity. So, after brexit happened I went and moved that money in the next day (~2000). And thus far it's worked perfectly. I had been anywhere from -5% return to +4% this year and ever since I moved that money into my 401 my return is now sitting at 6.5% and was definitely aided by the extra capital put in at the lower price point.
I don't have graphs to prove it's better than if I have just moved that money into the market consistently instead of timing it, but my return number sure jumps every time I buy on a dip and I'm averaging 10.65% overall in my 401k which is higher than the 7% average number I see thrown around a lot.
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Pretty much anyone who in the past year did some buying late August 2015, late September 2015, mid Feb 2016 and even 2 weeks ago on 6/27 should be enjoying their rewards.
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I definitely think that timing the market wins. My 401k pretty much tracks the S&P500 with a little bit of bonds (~5%) mixed in and everything I put in goes straight into the S&P fund. However, my employer pays me $1.45/hr into my 401k and that gets put into my 401k as cash.
That cash just sits there until I see an opportunity. So, after brexit happened I went and moved that money in the next day (~2000). And thus far it's worked perfectly. I had been anywhere from -5% return to +4% this year and ever since I moved that money into my 401 my return is now sitting at 6.5% and was definitely aided by the extra capital put in at the lower price point.
I don't have graphs to prove it's better than if I have just moved that money into the market consistently instead of timing it, but my return number sure jumps every time I buy on a dip and I'm averaging 10.65% overall in my 401k which is higher than the 7% average number I see thrown around a lot.
7% is the inflation adjusted number people use. You're likely losing vs someone who just puts everything into the market gradually throughout the year.
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Pretty much anyone who in the past year did some buying late August 2015, late September 2015, mid Feb 2016 and even 2 weeks ago on 6/27 should be enjoying their rewards.
I normally keep 1 year of expenses in cash as an Efund (i know, stupid right), but thanks to those three dips it's down to 1K, the minimum I need to keep my 1% rate. They have come in too quick succession for me to replenish the account. At least my Efund money has seen near 20% ROI in the last 12 months :) Gains will not be realized though... unless I have an emergency, knock on wood.
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7% is the inflation adjusted number people use. You're likely losing vs someone who just puts everything into the market gradually throughout the year.
I am not discounting your statement, however, I just don't believe it's true. I compare against fellow employees openly very often and we almost make a game out of competing to see who's allocation is doing better. One guy has been 1% ahead of me all year. He is more conservative than I am and during the early downturn this year he gained an edge vs my 90+% stock portfolio. After this purchase I made my return leapfrogged his and I'm now 1% ahead.
I know for a fact if I had bought earlier this year I wouldn't have been able to pass him like that. The opportunity that presented itself and allowed me to purchase cheaper is what allowed me to pass him.
I'm not advocating doing this with your entire 401k, but leaving some money on the side to take advantage of opportunities for easy capital gains seems like common sense and a no brainier to me. I can't argue with my total return of 10%+. None of my fellow employees have a overall return that high with any of their allocations and many have contributed religiously for decades.
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I'm not advocating doing this with your entire 401k, but leaving some money on the side to take advantage of opportunities for easy capital gains seems like common sense and a no brainier to me.
You got lucky. Statistically the best thing to do is invest immediately when you receive the money. You may get lucky again and be able to purchase a bunch of stock on the cheap, but what is more likely is that you will be able to buy less stock than you otherwise would own had you just purchased immediately.
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That's definitely possible, like I said I'm not discounting any advice. It's not been my experience though. I've only been investing for 7 years and maybe it's just the recent market volatility, but it seems like every few months the market takes a dip that is easy to take advantage of. The first opportunity I used this year was the interest rate hike, no-brainer there that the market would react and then brexit was also a no-brainer. After brexit hit Friday you knew for sure Monday would be a big sell off. I'm just playing off human nature I don't think it was luck at all. I made a conscious decision based off what I saw happening in the market.
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That's definitely possible, like I said I'm not discounting any advice. It's not been my experience though. I've only been investing for 7 years and maybe it's just the recent market volatility, but it seems like every few months the market takes a dip that is easy to take advantage of. The first opportunity I used this year was the interest rate hike, no-brainer there that the market would react and then brexit was also a no-brainer. After brexit hit Friday you knew for sure Monday would be a big sell off. I'm just playing off human nature I don't think it was luck at all. I made a conscious decision based off what I saw happening in the market.
So your basis for your claim is 7 years of blinded data in which you were only up 10.65% annually on avg when in the last 7 years the market has averaged more than that. Doesn't seem like what you're doing is working. While waiting for the 2 day brexit dip how much of the Feb run up did your money miss. It's dumb luck if you ever beat the market. That's the point of this thread more as a joke. If you notice many post people are using very small percentages of their portfolio or play money. Or the trades were before they got smart
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The 10% on Merrill Lynch only goes up to 24 months. And I've been in a low expense ratio sp500 fund the whole time so I've tracked the market almost exactly. I seriously doubt the few thousand I had on the sideline made that big a difference over my 7 year period. There is no need to be condescending.
So, I made what the market made. Fact is over the term against people with the same funds my account I'm ahead. I'm sorry you take offense to that. I said I didn't discount any advice given but it was not my experience. And well...I'm still right. If you have money sitting....as many people do in savings or like me as extra company money it's foolish to not buy "timed" dips that are blatantly obvious.
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The 10% on Merrill Lynch only goes up to 24 months. And I've been in a low expense ratio sp500 fund the whole time so I've tracked the market almost exactly. I seriously doubt the few thousand I had on the sideline made that big a difference over my 7 year period. There is no need to be condescending.
So, I made what the market made. Fact is over the term against people with the same funds my account I'm ahead. I'm sorry you take offense to that. I said I didn't discount any advice given but it was not my experience. And well...I'm still right. If you have money sitting....as many people do in savings or like me as extra company money it's foolish to not buy "timed" dips that are blatantly obvious.
The foolishness is to leave the money sitting.
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I tax loss harvested the Monday after the Brexit vote, which turned out to be the nadir in the US and international markets. Back to all-time highs.
I timed it right and got lucky. It's hard not to be timing in some fashion if you are investing.
Best,
-PoF
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In 2008 I "knew" shares for a company would rise.
[...]
And I had insider information...
Wait, wouldn't that purchase have been illegal in such circumstances? Not that I understand the implication, but it seems like it's better for you and the person who tipped you that you stayed away?
I was working for that company - and I am still working.
And by insider information it meant I had access to tools which showed the sales, plus tools which could be used to understand what teams were experimenting.
And by seeing the sales it was clear to me that the shares would rise. I did not have information about mergers or acquisitions...
I discussed with my wife and of course I would have contacted the legal department to ask if I am allowed to buy, as I am also not allowed to sell at any moment anyway, I am only allowed to sell in some months, after the financial results are posted.
But as we decided to not do it I did not have to contact the legal department in the end :).
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Sigh....sorry but I'll never agree. You should always have some liquid cash available for opportunities. I'm not saying your wrong in absolute returns when you have tunnel vision on one particular fund/index, but it neglects the opportunity to profit elsewhere.
If I hadn't kept money on the sidelines I couldn't have bought silver funds (up over 100% btw), or the easy pickings I took on oil companies when the price crashed (I purchased shell, BP, and Exxon) which has also crushed the market returns. Gun stocks are another good example. Everytime the president comes out with an anti gun speech I buy gun stocks and dump them shortly after. Is all of this stuff luck? My personal stock portfolio is up 16% over the past year which I also know is crushing the market.
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Sigh....sorry but I'll never agree. You should always have some liquid cash available for opportunities. I'm not saying your wrong in absolute returns when you have tunnel vision on one particular fund/index, but it neglects the opportunity to profit elsewhere.
If I hadn't kept money on the sidelines I couldn't have bought silver funds (up over 100% btw), or the easy pickings I took on oil companies when the price crashed (I purchased shell, BP, and Exxon) which has also crushed the market returns. Gun stocks are another good example. Everytime the president comes out with an anti gun speech I buy gun stocks and dump them shortly after. Is all of this stuff luck? My personal stock portfolio is up 16% over the past year which I also know is crushing the market.
Some of it is luck, some of it is obvious, but the point everyone is making is that while some of the time it's easy to spot the value and buy low, by keeping money on the sidelines waiting for those deals you have necessarily paid an opportunity cost in the form of missing the run ups. Your data set is way to small; it's only you. If you look at everyone in aggregate the answer is clear: invest as soon as you have the money and you will end up with more money.
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Sigh....sorry but I'll never agree. You should always have some liquid cash available for opportunities. I'm not saying your wrong in absolute returns when you have tunnel vision on one particular fund/index, but it neglects the opportunity to profit elsewhere.
If I hadn't kept money on the sidelines I couldn't have bought silver funds (up over 100% btw), or the easy pickings I took on oil companies when the price crashed (I purchased shell, BP, and Exxon) which has also crushed the market returns. Gun stocks are another good example. Everytime the president comes out with an anti gun speech I buy gun stocks and dump them shortly after. Is all of this stuff luck? My personal stock portfolio is up 16% over the past year which I also know is crushing the market.
Some of it is luck, some of it is obvious, but the point everyone is making is that while some of the time it's easy to spot the value and buy low, by keeping money on the sidelines waiting for those deals you have necessarily paid an opportunity cost in the form of missing the run ups. Your data set is way to small; it's only you. If you look at everyone in aggregate the answer is clear: invest as soon as you have the money and you will end up with more money.
yep you're just getting lucky. maybe you will forever and congrats on that but its a losing strategy in long term investing we currently have a volatile market where you are getting lucky. if your strategy worked so well all the great finance minds would be writing about it and investing money in this manner. the smartest investor of generations(warren buffett) even says that if you're not him you should just put your money in an index fund. i'd be interested to see how your sidelining of monies worked waiting for a down fall in the 2013 run up b/c based on your amazing timing you likely would have kept thousands sidelined waiting for that drop while we all sat and made 30%+
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Whoever sells this beauty in a bidding war with offshore buyers.
http://www.rew.ca/properties/R2072511/3538-w-29th-avenue-vancouver?property_search=404430739
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Whoever sells this beauty in a bidding war with offshore buyers.
http://www.rew.ca/properties/R2072511/3538-w-29th-avenue-vancouver?property_search=404430739
Are you local? Out of curiosity, has Brexit driven big Canadian city's real estate markets higher?
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Brexit, not at all. This is all foreign investors and supply and demand. Welcome to Hongcouver.
(http://www.news1130.com/wp-content/blogs.dir/sites/9/2016/02/02/rebgv.jpg)
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Brexit, not at all. This is all foreign investors and supply and demand.
From what I understand there's been a jump in Frankfurt and NYC real estate in part because capital-/finance-related jobs are assuming they'll be moved/London real estate won't be a good investment for long. Maybe it's not affecting Canada.
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I've heard a lot of wealthy Chinese are investing in US and Canada real estate in order to get their money out of China in case things turn south there. Mostly in big coastal cities.
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I've heard a lot of wealthy Chinese are investing in US and Canada real estate in order to get their money out of China in case things turn south there. Mostly in big coastal cities.
Agreed, but I don't think that's news (unless it's picked up in the last few months?). Vancouver and San Fran have been particularly badly (goodly? strongly?) hit, I think.
The move toward NYC and Frankfurt is newer: http://www.cnbc.com/2016/07/06/brexit-is-even-hitting-nyc-luxury-apartments-broker-says.html
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I've heard a lot of wealthy Chinese are investing in US and Canada real estate in order to get their money out of China in case things turn south there. Mostly in big coastal cities.
Agreed, but I don't think that's news (unless it's picked up in the last few months?). Vancouver and San Fran have been particularly badly (goodly? strongly?) hit, I think.
The move toward NYC and Frankfurt is newer: http://www.cnbc.com/2016/07/06/brexit-is-even-hitting-nyc-luxury-apartments-broker-says.html
Yeah, I was just commenting on part of why Vancouver might be more expensive the past few years. It wouldn't surprise me if NYC was also a big place for the Chinese to invest pre-Brexit. No idea about Frankfurt.
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Sigh....sorry but I'll never agree. You should always have some liquid cash available for opportunities. I'm not saying your wrong in absolute returns when you have tunnel vision on one particular fund/index, but it neglects the opportunity to profit elsewhere.
If I hadn't kept money on the sidelines I couldn't have bought silver funds (up over 100% btw), or the easy pickings I took on oil companies when the price crashed (I purchased shell, BP, and Exxon) which has also crushed the market returns. Gun stocks are another good example. Everytime the president comes out with an anti gun speech I buy gun stocks and dump them shortly after. Is all of this stuff luck? My personal stock portfolio is up 16% over the past year which I also know is crushing the market.
Some of it is luck, some of it is obvious, but the point everyone is making is that while some of the time it's easy to spot the value and buy low, by keeping money on the sidelines waiting for those deals you have necessarily paid an opportunity cost in the form of missing the run ups. Your data set is way to small; it's only you. If you look at everyone in aggregate the answer is clear: invest as soon as you have the money and you will end up with more money.
yep you're just getting lucky. maybe you will forever and congrats on that but its a losing strategy in long term investing we currently have a volatile market where you are getting lucky. if your strategy worked so well all the great finance minds would be writing about it and investing money in this manner. the smartest investor of generations(warren buffett) even says that if you're not him you should just put your money in an index fund. i'd be interested to see how your sidelining of monies worked waiting for a down fall in the 2013 run up b/c based on your amazing timing you likely would have kept thousands sidelined waiting for that drop while we all sat and made 30%+
I'm not disagreeing with ya man. I'm just saying what's been working for me. As I've said 90% of my assets are invested just the way everyone here is advocating and that's into low-cost index funds on a bi-weekly basis in my case.
Here is a photo of my returns so far since September. I am not saying I'm gonna keep staying ahead, but I'm certainly having fun trying to do so. Whenever I fall below the market average I'll be sure to post a photo of that too, so I can educate anyone who tries to follow me if I end up the fool.
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Sigh....sorry but I'll never agree. You should always have some liquid cash available for opportunities. I'm not saying your wrong in absolute returns when you have tunnel vision on one particular fund/index, but it neglects the opportunity to profit elsewhere.
If I hadn't kept money on the sidelines I couldn't have bought silver funds (up over 100% btw), or the easy pickings I took on oil companies when the price crashed (I purchased shell, BP, and Exxon) which has also crushed the market returns. Gun stocks are another good example. Everytime the president comes out with an anti gun speech I buy gun stocks and dump them shortly after. Is all of this stuff luck? My personal stock portfolio is up 16% over the past year which I also know is crushing the market.
Some of it is luck, some of it is obvious, but the point everyone is making is that while some of the time it's easy to spot the value and buy low, by keeping money on the sidelines waiting for those deals you have necessarily paid an opportunity cost in the form of missing the run ups. Your data set is way to small; it's only you. If you look at everyone in aggregate the answer is clear: invest as soon as you have the money and you will end up with more money.
yep you're just getting lucky. maybe you will forever and congrats on that but its a losing strategy in long term investing we currently have a volatile market where you are getting lucky. if your strategy worked so well all the great finance minds would be writing about it and investing money in this manner. the smartest investor of generations(warren buffett) even says that if you're not him you should just put your money in an index fund. i'd be interested to see how your sidelining of monies worked waiting for a down fall in the 2013 run up b/c based on your amazing timing you likely would have kept thousands sidelined waiting for that drop while we all sat and made 30%+
I still believe a variant of this, i.e. not buying when the market is 'frothy' and then putting that money in after the crash is worthwhile. And if you're wrong, all that means is either you keep buying while the method is 'frothy', and maybe you buy too early after the crash. In either of these cases, you just revert to the same as just putting money consistently into the market.
And by frothy, I mean serious exuberance, ala pre-2000, or pre-2008.
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Sigh....sorry but I'll never agree. You should always have some liquid cash available for opportunities. I'm not saying your wrong in absolute returns when you have tunnel vision on one particular fund/index, but it neglects the opportunity to profit elsewhere.
If I hadn't kept money on the sidelines I couldn't have bought silver funds (up over 100% btw), or the easy pickings I took on oil companies when the price crashed (I purchased shell, BP, and Exxon) which has also crushed the market returns. Gun stocks are another good example. Everytime the president comes out with an anti gun speech I buy gun stocks and dump them shortly after. Is all of this stuff luck? My personal stock portfolio is up 16% over the past year which I also know is crushing the market.
Some of it is luck, some of it is obvious, but the point everyone is making is that while some of the time it's easy to spot the value and buy low, by keeping money on the sidelines waiting for those deals you have necessarily paid an opportunity cost in the form of missing the run ups. Your data set is way to small; it's only you. If you look at everyone in aggregate the answer is clear: invest as soon as you have the money and you will end up with more money.
yep you're just getting lucky. maybe you will forever and congrats on that but its a losing strategy in long term investing we currently have a volatile market where you are getting lucky. if your strategy worked so well all the great finance minds would be writing about it and investing money in this manner. the smartest investor of generations(warren buffett) even says that if you're not him you should just put your money in an index fund. i'd be interested to see how your sidelining of monies worked waiting for a down fall in the 2013 run up b/c based on your amazing timing you likely would have kept thousands sidelined waiting for that drop while we all sat and made 30%+
I still believe a variant of this, i.e. not buying when the market is 'frothy' and then putting that money in after the crash is worthwhile. And if you're wrong, all that means is either you keep buying while the method is 'frothy', and maybe you buy too early after the crash. In either of these cases, you just revert to the same as just putting money consistently into the market.
And by frothy, I mean serious exuberance, ala pre-2000, or pre-2008.
Çan I borrow the crystal ball you have been using to predict frothy.
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When things started tanking in '08, I waited a few months and then threw what I could at the market - As a broke, unemployed college freshman, I could only afford about ~$300 at the time. It was largely teenage arrogance and luck, but that one purchase is easily worth double or triple the purchase price now. In hindsight, I wish high school/early college me was less of a slacker and had more cash to invest at that moment... oh well. Spilled milk.
Sort of market-timing related: I pulled about $13k out of VTSAX yesterday. I'm looking at buying property within the next year and have had that money allocated toward a down payment anyways... figured that a record high day was the perfect moment to sell. Sure, it could go higher, but it could also go down, and I'm getting more risk adverse with that chunk as I'm getting closer to purchase time. Perfectly content to lock in on that gain.
Granted, if the market crashes anytime soon and the price of VTSAX goes below $35, I'll put the property plans on hold, dive right back in with a smile on my face, and count myself one lucky sonofabitch.
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Çan I borrow the crystal ball you have been using to predict frothy.
You can't borrow it - you have to pay about $300 a year for it, its called an Economist subscription - or maybe try your local library.
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I've got people here at the office convinced they are going to get rich buying Nintendo stock because of the Pokemon Go craze. Keep in mind they did not own the stock before. They are waiting for cash to clear a newly opened brokerage account to purchase shares in two days. I've tried to talk some sense into them about market timing, but alas some people must learn the hard way.......
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Yeah, the crash in 2008 was easy pickings. I don't see this as timing it's taking advantage and diverting liquid funds when an opportunity presents itself. I don't actually try to "time" anything like selling high right now on the sp500 expecting a correction. I wouldn't have sold in '08, I would have simply started putting more cash in while it was on sale.
Selling at the current peak if you need cash is the best bet IMO as well. It's never been higher, if you need it now is the time.
Back when BP had the gulf oil spill it dropped to $25 on June 25. That was my birthday. I bought all I could then because it was an obvious buy of a major company that would recover. It being 25 on my birthday June 25th.... THAT is luck. Taking advantage of the economic or environmental situation isn't luck at all its a calculated action.
I bought $400 of Sirius radio at $.25 and it went to between $2 or 3 when I was in college. That was luck.
Saying that this doesn't work is like saying someone that keeps cash on hand and buys and flips houses/cars/etc is an idiot. When a good deal pops up you take advantage. A deal is a deal, when something is on sale you buy it. Call it timing if you want, but that's a poor description of it.
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Çan I borrow the crystal ball you have been using to predict frothy.
You can't borrow it - you have to pay about $300 a year for it, its called an Economist subscription - or maybe try your local library.
Just wondering what your trigger is some guy in a magazine. Got it.
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Çan I borrow the crystal ball you have been using to predict frothy.
You can't borrow it - you have to pay about $300 a year for it, its called an Economist subscription - or maybe try your local library.
Just wondering what your trigger is some guy in a magazine. Got it.
Well and its also quotes like "be fearful when others are greedy, and greedy when others are fearful". I've read a fair bit about historical financial bubbles, and there do seem to be similar patterns, a belief that some new technology will change the world, in particular that it means all the old rules are over, another strong telltale sign is that taxi drivers start to give stock tips.
Most recently, the Economist had been talking about the illogical prices being given to Unicorn funds, as they are largely private companies, they don't really affect the public markets, so it wasn't something that could be acted on, so I still trust their opinions.
I've been investing for some 20 years now, and the question about how well you can tell bubbles, is what did you think pre-2000, and pre-2008. If you thought, this is a bubble/frothy, its not a time to buy - and you didn't get the same strong sense at other times - you can detect bubbles, but if in those times, you didn't have any such opinion, or worse, if you got caught up in the hype and thought it was a good time to buy, then you haven't a sufficiently developed bubble sense, and yes, you should just consistently buy. Moreover that's probably true of most people.
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Buffet agrees...
"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful."
"Long ago, Ben Graham taught me that 'Price is what you pay; value is what you get.' Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down."
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Çan I borrow the crystal ball you have been using to predict frothy.
You can't borrow it - you have to pay about $300 a year for it, its called an Economist subscription - or maybe try your local library.
Just wondering what your trigger is some guy in a magazine. Got it.
Well and its also quotes like "be fearful when others are greedy, and greedy when others are fearful". I've read a fair bit about historical financial bubbles, and there do seem to be similar patterns, a belief that some new technology will change the world, in particular that it means all the old rules are over, another strong telltale sign is that taxi drivers start to give stock tips.
Most recently, the Economist had been talking about the illogical prices being given to Unicorn funds, as they are largely private companies, they don't really affect the public markets, so it wasn't something that could be acted on, so I still trust their opinions.
I've been investing for some 20 years now, and the question about how well you can tell bubbles, is what did you think pre-2000, and pre-2008. If you thought, this is a bubble/frothy, its not a time to buy - and you didn't get the same strong sense at other times - you can detect bubbles, but if in those times, you didn't have any such opinion, or worse, if you got caught up in the hype and thought it was a good time to buy, then you haven't a sufficiently developed bubble sense, and yes, you should just consistently buy. Moreover that's probably true of most people.
So how many millions is your net worth?
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Çan I borrow the crystal ball you have been using to predict frothy.
You can't borrow it - you have to pay about $300 a year for it, its called an Economist subscription - or maybe try your local library.
Just wondering what your trigger is some guy in a magazine. Got it.
Well and its also quotes like "be fearful when others are greedy, and greedy when others are fearful". I've read a fair bit about historical financial bubbles, and there do seem to be similar patterns, a belief that some new technology will change the world, in particular that it means all the old rules are over, another strong telltale sign is that taxi drivers start to give stock tips.
Most recently, the Economist had been talking about the illogical prices being given to Unicorn funds, as they are largely private companies, they don't really affect the public markets, so it wasn't something that could be acted on, so I still trust their opinions.
I've been investing for some 20 years now, and the question about how well you can tell bubbles, is what did you think pre-2000, and pre-2008. If you thought, this is a bubble/frothy, its not a time to buy - and you didn't get the same strong sense at other times - you can detect bubbles, but if in those times, you didn't have any such opinion, or worse, if you got caught up in the hype and thought it was a good time to buy, then you haven't a sufficiently developed bubble sense, and yes, you should just consistently buy. Moreover that's probably true of most people.
So how many millions is your net worth?
I don't really want to go into details on that - but, I've been happy with my net worth growth rate, but since I've started working, my savings rate hasn't been enormously high.. it was around 40% when my DW and I were saving for a house deposit, and then dropped down to single figures when our kids were born, now we're back to the 30s again. I'm now 46 and if our net worth grows at the same rate as it has historically, we could retire now, but I'm planning to wait until I'm 51 and than retire and just live off dividends.
... but avoiding bubbles is only something that happens about once a decade, so over that time, most of the time, I'm just putting money into the market, pretty much, as it comes available (if its lumpy - I spread it evenly over several months), and I'm a buy-and-hold investor. So avoiding bubbles doesn't make me radically different from an average index investor. Its just that when the market gets bubbly, I pay off my house and investment loans, and then take that money back out again and invest it after the crash.
For, the record, I don't think the markets are in a bubble now, I'm currently just putting money into the market as it becomes available.
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Çan I borrow the crystal ball you have been using to predict frothy.
You can't borrow it - you have to pay about $300 a year for it, its called an Economist subscription - or maybe try your local library.
Just wondering what your trigger is some guy in a magazine. Got it.
Well and its also quotes like "be fearful when others are greedy, and greedy when others are fearful". I've read a fair bit about historical financial bubbles, and there do seem to be similar patterns, a belief that some new technology will change the world, in particular that it means all the old rules are over, another strong telltale sign is that taxi drivers start to give stock tips.
Most recently, the Economist had been talking about the illogical prices being given to Unicorn funds, as they are largely private companies, they don't really affect the public markets, so it wasn't something that could be acted on, so I still trust their opinions.
I've been investing for some 20 years now, and the question about how well you can tell bubbles, is what did you think pre-2000, and pre-2008. If you thought, this is a bubble/frothy, its not a time to buy - and you didn't get the same strong sense at other times - you can detect bubbles, but if in those times, you didn't have any such opinion, or worse, if you got caught up in the hype and thought it was a good time to buy, then you haven't a sufficiently developed bubble sense, and yes, you should just consistently buy. Moreover that's probably true of most people.
So how many millions is your net worth?
I don't really want to go into details on that - but, I've been happy with my net worth growth rate, but since I've started working, my savings rate hasn't been enormously high.. it was around 40% when my DW and I were saving for a house deposit, and then dropped down to single figures when our kids were born, now we're back to the 30s again. I'm now 46 and if our net worth grows at the same rate as it has historically, we could retire now, but I'm planning to wait until I'm 51 and than retire and just live off dividends.
... but avoiding bubbles is only something that happens about once a decade, so over that time, most of the time, I'm just putting money into the market, pretty much, as it comes available (if its lumpy - I spread it evenly over several months), and I'm a buy-and-hold investor. So avoiding bubbles doesn't make me radically different from an average index investor. Its just that when the market gets bubbly, I pay off my house and investment loans, and then take that money back out again and invest it after the crash.
For, the record, I don't think the markets are in a bubble now, I'm currently just putting money into the market as it becomes available.
You have led us to believe you can accurately predict bubbles ahead of time and not just in hindsight like everybody else can. The fact that you have been investing for 20 years, claim to have predicted both bubbles, and yet are not FI multiple times over is suspicious. You should have quintupled your wealth from 2000 until now, in addition to saving for an additional 16 years and getting fantastic value on those investments. Even with a modest salary you should be a millionaire by now.
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Çan I borrow the crystal ball you have been using to predict frothy.
You can't borrow it - you have to pay about $300 a year for it, its called an Economist subscription - or maybe try your local library.
Just wondering what your trigger is some guy in a magazine. Got it.
Well and its also quotes like "be fearful when others are greedy, and greedy when others are fearful". I've read a fair bit about historical financial bubbles, and there do seem to be similar patterns, a belief that some new technology will change the world, in particular that it means all the old rules are over, another strong telltale sign is that taxi drivers start to give stock tips.
Most recently, the Economist had been talking about the illogical prices being given to Unicorn funds, as they are largely private companies, they don't really affect the public markets, so it wasn't something that could be acted on, so I still trust their opinions.
I've been investing for some 20 years now, and the question about how well you can tell bubbles, is what did you think pre-2000, and pre-2008. If you thought, this is a bubble/frothy, its not a time to buy - and you didn't get the same strong sense at other times - you can detect bubbles, but if in those times, you didn't have any such opinion, or worse, if you got caught up in the hype and thought it was a good time to buy, then you haven't a sufficiently developed bubble sense, and yes, you should just consistently buy. Moreover that's probably true of most people.
So how many millions is your net worth?
I don't really want to go into details on that - but, I've been happy with my net worth growth rate, but since I've started working, my savings rate hasn't been enormously high.. it was around 40% when my DW and I were saving for a house deposit, and then dropped down to single figures when our kids were born, now we're back to the 30s again. I'm now 46 and if our net worth grows at the same rate as it has historically, we could retire now, but I'm planning to wait until I'm 51 and than retire and just live off dividends.
... but avoiding bubbles is only something that happens about once a decade, so over that time, most of the time, I'm just putting money into the market, pretty much, as it comes available (if its lumpy - I spread it evenly over several months), and I'm a buy-and-hold investor. So avoiding bubbles doesn't make me radically different from an average index investor. Its just that when the market gets bubbly, I pay off my house and investment loans, and then take that money back out again and invest it after the crash.
For, the record, I don't think the markets are in a bubble now, I'm currently just putting money into the market as it becomes available.
You have led us to believe you can accurately predict bubbles ahead of time and not just in hindsight like everybody else can. The fact that you have been investing for 20 years, claim to have predicted both bubbles, and yet are not FI multiple times over is suspicious. You should have quintupled your wealth from 2000 until now, in addition to saving for an additional 16 years and getting fantastic value on those investments. Even with a modest salary you should be a millionaire by now.
Well, our NAs exceed one million, so your prediction is correct.
Probably the main reason I'm not FI now, is that my expenditure has increased with income - so we now earn around 4 times as much as we did 20 years ago, spend about 5 times as much, and my net assets have increased by about 10 times.
Our net assets are now 25 times as much as our annual expenditure in 2007 - but our current expenditure is about 50% bigger than that - also (amusingly) our NA is now 70 times what our annual spending was back in 1996 (oh the joy of long term spreadsheets).
You mentioned NA, our NAs are now 16 times bigger than in 2000.
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Çan I borrow the crystal ball you have been using to predict frothy.
You can't borrow it - you have to pay about $300 a year for it, its called an Economist subscription - or maybe try your local library.
Just wondering what your trigger is some guy in a magazine. Got it.
Well and its also quotes like "be fearful when others are greedy, and greedy when others are fearful". I've read a fair bit about historical financial bubbles, and there do seem to be similar patterns, a belief that some new technology will change the world, in particular that it means all the old rules are over, another strong telltale sign is that taxi drivers start to give stock tips.
Most recently, the Economist had been talking about the illogical prices being given to Unicorn funds, as they are largely private companies, they don't really affect the public markets, so it wasn't something that could be acted on, so I still trust their opinions.
I've been investing for some 20 years now, and the question about how well you can tell bubbles, is what did you think pre-2000, and pre-2008. If you thought, this is a bubble/frothy, its not a time to buy - and you didn't get the same strong sense at other times - you can detect bubbles, but if in those times, you didn't have any such opinion, or worse, if you got caught up in the hype and thought it was a good time to buy, then you haven't a sufficiently developed bubble sense, and yes, you should just consistently buy. Moreover that's probably true of most people.
So how many millions is your net worth?
I don't really want to go into details on that - but, I've been happy with my net worth growth rate, but since I've started working, my savings rate hasn't been enormously high.. it was around 40% when my DW and I were saving for a house deposit, and then dropped down to single figures when our kids were born, now we're back to the 30s again. I'm now 46 and if our net worth grows at the same rate as it has historically, we could retire now, but I'm planning to wait until I'm 51 and than retire and just live off dividends.
... but avoiding bubbles is only something that happens about once a decade, so over that time, most of the time, I'm just putting money into the market, pretty much, as it comes available (if its lumpy - I spread it evenly over several months), and I'm a buy-and-hold investor. So avoiding bubbles doesn't make me radically different from an average index investor. Its just that when the market gets bubbly, I pay off my house and investment loans, and then take that money back out again and invest it after the crash.
For, the record, I don't think the markets are in a bubble now, I'm currently just putting money into the market as it becomes available.
You have led us to believe you can accurately predict bubbles ahead of time and not just in hindsight like everybody else can. The fact that you have been investing for 20 years, claim to have predicted both bubbles, and yet are not FI multiple times over is suspicious. You should have quintupled your wealth from 2000 until now, in addition to saving for an additional 16 years and getting fantastic value on those investments. Even with a modest salary you should be a millionaire by now.
Well, our NAs exceed one million, so your prediction is correct.
Probably the main reason I'm not FI now, is that my expenditure has increased with income - so we now earn around 4 times as much as we did 20 years ago, spend about 5 times as much, and my net assets have increased by about 10 times.
Our net assets are now 25 times as much as our annual expenditure in 2007 - but our current expenditure is about 50% bigger than that - also (amusingly) our NA is now 70 times what our annual spending was back in 1996 (oh the joy of long term spreadsheets).
You mentioned NA, our NAs are now 16 times bigger than in 2000.
Sorry, I put the wrong number of zero's into my calculator, NA are now around 100 times bigger than in 1996 (not 10). And that last sentence should have been
You mentioned 2000
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I have to say I'm with faramund on this one. Identifying bubbles (or even just people being stupid) is possible and some people do it very successfully. But an even more reasonable expectation is being able to identify assets that are undervalued in the market relative to their intrinsic value. Maybe people can identify when houses in their neighborhoods come up for sale that are undervalued, they're called flippers. Warren Buffet, Joshual Kennon, Benjamin Graham and many other investors who actually care about long term returns can do the same with companies. Can I do it? No, that's why I use indexing as a tool for investing. Can other people do much better if they are good at value investing? Absolutely.
(I'm a little skeptical that the silver purchase was just being lucky but the oil stocks and timing were a beautiful buy imo. Anyone can look up an oil company's projected reserves and come up with a value for the company. Some companies were priced so low at some points that oil prices would have needed to continue going down into the teens and staying there forever to justify the prices.)
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We were told that our company had "had a great quarter", (that was literally all of the information) and that we now had insider information so we could not buy any stock until after earnings. I thought, fine, no big deal--but I did change my 401k allocations so that more of it went to company stock. Well, we did have a great quarter, but the market never really recognized it so I never really made anything off of it. So much for my trying to time the market. I switched it back to my normal 1% of the 401k contribution going to the company stock after a few months (I'd honestly forgotten I'd done it).
Well, 1 paycheck after I made that change back to a "normal" allocation, the company was acquired. All my stock in my 401k made my 401k increase by about 15% overnight. I re-balanced after about a week since the deal won't go down for almost a year and the stock price can only rise about 1%.
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Well, our NAs exceed one million, so your prediction is correct.
Probably the main reason I'm not FI now, is that my expenditure has increased with income - so we now earn around 4 times as much as we did 20 years ago, spend about 5 times as much, and my net assets have increased by about 10 times.
Our net assets are now 25 times as much as our annual expenditure in 2007 - but our current expenditure is about 50% bigger than that - also (amusingly) our NA is now 70 times what our annual spending was back in 1996 (oh the joy of long term spreadsheets).
You mentioned NA, our NAs are now 16 times bigger than in 2000.
Sorry, I put the wrong number of zero's into my calculator, NA are now around 100 times bigger than in 1996 (not 10). And that last sentence should have been
You mentioned 2000
(http://www.reactiongifs.us/wp-content/uploads/2013/02/not_even_mad.gif)
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My net assets are 250k times bigger than 1992. When grandma gave me a 2 dollar bill. I love picking random end points and equating it to net assets. Would love to see you networth/ contributions trend over time so we can all see how you predicted both bubbles.
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My net assets are 250k times bigger than 1992. When grandma gave me a 2 dollar bill. I love picking random end points and equating it to net assets. Would love to see you networth/ contributions trend over time so we can all see how you predicted both bubbles.
Well they weren't random, I said I've been investing for about 20 years, so I picked 1996 as 20 years ago. But yes, as I'd started work in 1994, it was a low base - it was about half of our annual income at that time - which is why I also gave 2000 as a base, as asked.
I generally found the, well how come you aren't worth a lot now line-of-argument, a bit odd.. This has as much to do with how and when you saved, as what sort of gains you make.
In any case, my shares, out-side of superannuation/retirement accounts is about my 3rd or 4th smallest asset class. So in looking at my overall net worth, it doesn't say much about how I pick when I buy shares.
So, as to your request - its a bit ugly, but below is the history of my share purchases, the first number in each row is obviously the year, the second, is what share of my total share purchases were made in that year, the third is how much the amount of money I had paid in shares was increased, over the total amount of money I had ever paid, the fourth is the increase in the AllOrds in that year (basically an index of the largest shares in the Australian market).
As you can see, I didn't buy pre-2000, instead any extra money was just used paying down debt and/or going towards down payments for our first house. Our kids were born 1998 and 2001x2, so not much free-investment money until a bit after that, which was then leading up to the 2008 bubble. So then the wait... until after the crash when 2008 and 09 became the first chance of major investments, the 08 investments are predominantly in Oct,Nov, but about 1/7th of that was in July, which was probably a bit early - but I'm not trying to claim perfection. Then we get into the Greek default period, where I decided to hold off buying shares until after the Greek 2nd default, which probably meant I started buying about a year late, and since then I've pretty much been trying to buy into the market with everything I can mobilise. This year's a bit slower than the previous years, but only because we're building equity to move to a larger house.
2000 0.1 inf 2.9
2001 2.6
2002 -9.5
2003 8.8
2004 0.3 324.6 22.9
2005 15.7
2006 0.2 54.7 19.8
2007 -0.1 -7.5 17.6
2008 2.5 247.2 -45.7
2009 9.0 250.6 34.3
2010 0.2 1.3 2.1
2011 0.5 3.8 -12.4
2012 0.5 3.8 8.7
2013 11.7 79.6 13.4
2014 26.3 99.2 1.4
2015 38.1 71.5 1.0
2016 7.4 7.9 -0.3
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Ok, how about we get philosophical. Say there's an activity, call it A, I'm sure we agree that more than half of people can't be better than average at A. We can even think about people who train at A, there will be some ratio of the overall that the average of people who train reach (say A'). Once again, obviously the majority of people who train at A, will not be better then (A'). Now let's also say there's a cutoff point(G), and only some percentage of people can meet it, say G% (and let's say G%<A').
What does this mean. In advising people, we can say, you probably won't make G and you probably won't be better than average. Also, even if you train, you probably won't make G, and you probably won't be better than the average person who trains.
But it is incorrect to say, no one can reach G (unless G is 0%).
So if you think of this as say, swimming, this all holds, and maybe G could be, be one of the top 100 swimmers in your event. Obviously most people won't be able to do this, and unless they enjoy the process, shouldn't even (logically) aim for that G. But it doesn't mean no one should aim for 100 - after all 100 people have to reach it.
The people who do aim for G try to have training programs and schedules, and whatever else, to try to reach that G.
I'd say, this holds for almost every activity. So when it comes to investing - most people won't beat average, most people who study the market, won't beat the average person who studies the market. The real question, is what's G, what's the chance of beating the index.
If you think its zero, well there's not much to talk about.
If its greater than 0, its still true, that most people won't beat G, and will be better off sticking with indexing - so that's the best advice for most people. And yet.. if G is greater than 0, then there's interesting possibilities to try to find approaches that do work.
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Also, since the activity is totally optional, people who aren't good at it will be more likely to stop doing it (i.e. index). So the only people left playing the game are more and more and better and better experts (and likely with inside info that you don't have). So you are more and more likely to lose.
If you had to bet your life savings on a swimming race against Michael Phelps, would you? Sure, you might win. But it's not especially likely.
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Ok, how about we get philosophical. Say there's an activity, call it A, I'm sure we agree that more than half of people can't be better than average at A. We can even think about people who train at A, there will be some ratio of the overall that the average of people who train reach (say A'). Once again, obviously the majority of people who train at A, will not be better then (A'). Now let's also say there's a cutoff point(G), and only some percentage of people can meet it, say G% (and let's say G%<A').
What does this mean. In advising people, we can say, you probably won't make G and you probably won't be better than average. Also, even if you train, you probably won't make G, and you probably won't be better than the average person who trains.
But it is incorrect to say, no one can reach G (unless G is 0%).
So if you think of this as say, swimming, this all holds, and maybe G could be, be one of the top 100 swimmers in your event. Obviously most people won't be able to do this, and unless they enjoy the process, shouldn't even (logically) aim for that G. But it doesn't mean no one should aim for 100 - after all 100 people have to reach it.
The people who do aim for G try to have training programs and schedules, and whatever else, to try to reach that G.
I'd say, this holds for almost every activity. So when it comes to investing - most people won't beat average, most people who study the market, won't beat the average person who studies the market. The real question, is what's G, what's the chance of beating the index.
If you think its zero, well there's not much to talk about.
If its greater than 0, its still true, that most people won't beat G, and will be better off sticking with indexing - so that's the best advice for most people. And yet.. if G is greater than 0, then there's interesting possibilities to try to find approaches that do work.
This is an interesting way to look at it. I work with hedge funds, who clearly think they can be G.
That said, I think there's something missing, which is that if you lose to Michael Phelps (to use the other poster's phrase), you just lost. In this instance, market timing gone way wrong can have very destructive consequences if you're playing with real money and you need it to survive or retire. It's more like losing and drowning.
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Ok, how about we get philosophical. Say there's an activity, call it A, I'm sure we agree that more than half of people can't be better than average at A.
What if that activity is coin flipping? I would not agree that anyone is better than anyone else, yet in a competition you will necessarily have top performers. I would be surprised if year after year the same people continued to win the coin flip tourney though. More likely those that win will have the illusion of superiority while not actually possessing any skill that makes them a better coin flipper. In fact when you look at the statistics of the professionals that participate in this coin flipping tourney you see time and time again that they do not possess any special coin flipping ability and their recent wins were due to luck, and over time their average win rate falls in line with what you would expect if they did not have any special coin flipping ability. And then some stranger shows up on an internet forum and claims to be a fantastic coin flipper because they possess the ability to accurately call the outcome of the coin flip - despite the fact that the vast, vast majority of professional coin flippers cannot even do this. Our skepticism is understandable.
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Ok, how about we get philosophical. Say there's an activity, call it A, I'm sure we agree that more than half of people can't be better than average at A.
What if that activity is coin flipping? I would not agree that anyone is better than anyone else, yet in a competition you will necessarily have top performers. I would be surprised if year after year the same people continued to win the coin flip tourney though. More likely those that win will have the illusion of superiority while not actually possessing any skill that makes them a better coin flipper. In fact when you look at the statistics of the professionals that participate in this coin flipping tourney you see time and time again that they do not possess any special coin flipping ability and their recent wins were due to luck, and over time their average win rate falls in line with what you would expect if they did not have any special coin flipping ability. And then some stranger shows up on an internet forum and claims to be a fantastic coin flipper because they possess the ability to accurately call the outcome of the coin flip - despite the fact that the vast, vast majority of professional coin flippers cannot even do this. Our skepticism is understandable.
Well, but that's just rephrasing the question, is outperforming the market purely random? i.e. is G = 0?
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Ok, how about we get philosophical. Say there's an activity, call it A, I'm sure we agree that more than half of people can't be better than average at A. We can even think about people who train at A, there will be some ratio of the overall that the average of people who train reach (say A'). Once again, obviously the majority of people who train at A, will not be better then (A'). Now let's also say there's a cutoff point(G), and only some percentage of people can meet it, say G% (and let's say G%<A').
What does this mean. In advising people, we can say, you probably won't make G and you probably won't be better than average. Also, even if you train, you probably won't make G, and you probably won't be better than the average person who trains.
But it is incorrect to say, no one can reach G (unless G is 0%).
So if you think of this as say, swimming, this all holds, and maybe G could be, be one of the top 100 swimmers in your event. Obviously most people won't be able to do this, and unless they enjoy the process, shouldn't even (logically) aim for that G. But it doesn't mean no one should aim for 100 - after all 100 people have to reach it.
The people who do aim for G try to have training programs and schedules, and whatever else, to try to reach that G.
I'd say, this holds for almost every activity. So when it comes to investing - most people won't beat average, most people who study the market, won't beat the average person who studies the market. The real question, is what's G, what's the chance of beating the index.
If you think its zero, well there's not much to talk about.
If its greater than 0, its still true, that most people won't beat G, and will be better off sticking with indexing - so that's the best advice for most people. And yet.. if G is greater than 0, then there's interesting possibilities to try to find approaches that do work.
This is an interesting way to look at it. I work with hedge funds, who clearly think they can be G.
That said, I think there's something missing, which is that if you lose to Michael Phelps (to use the other poster's phrase), you just lost. In this instance, market timing gone way wrong can have very destructive consequences if you're playing with real money and you need it to survive or retire. It's more like losing and drowning.
I agree its rare, which is why I advise people to index, but also say, if you don't index, you have to measure your performance against an index - so you know if you are just deluding yourself or not. And the goal is to beat an index, not to be the best investor in the world, which makes it comparitively easier than beating Phelps.
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My net assets are 250k times bigger than 1992. When grandma gave me a 2 dollar bill. I love picking random end points and equating it to net assets. Would love to see you networth/ contributions trend over time so we can all see how you predicted both bubbles.
Well they weren't random, I said I've been investing for about 20 years, so I picked 1996 as 20 years ago. But yes, as I'd started work in 1994, it was a low base - it was about half of our annual income at that time - which is why I also gave 2000 as a base, as asked.
K I started investing at 10 I really did so that would have been 1996. I have 5k so I've seen 10000% growth over my investing career. I made money trying to pick stocks and time the market but it wasn't that much better and sometimes worse than the overall market gains. Apparently I needed a subscription to the economist. Must be one of life's best secrets. Started indexing after I found this and boggleheads and I was searching bc I barely bwat the market in 2013 with some nicely timed Tesla plays. To each their own but it's highly unlikely youre going to be the market long-term trying to time. Plus it's not predictable. If it was fund managers would be taking it in timing it.
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So if you're so good at timing the market and beating it why then haven't you started a fund and marketed it bc you would be able to make way more selling your idea than the pennies youre making in comparison
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Faramund, just keep doing what you're doing. Around here and Bogleheads, people can'y possibly believe that anyone could ever disprove John Bogle's "proof" despite the fact that a small minority of investors doing long-term value investing absolutely do beat the indexes consistently, year after year. This is what Warren Buffet does, his mentors and teachers did it too. The reason hedge funds and mutual funds don't beat indexes more than 50% of the time is because they are constrained by short term thinking. People who think in 20+ year time horizons absolutely beat the indexes.
I personally (and most people) don't have the knowledge or time required to investigate companies or other assets adequately in order to do true long term value investing but some people absolutely do.
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My net assets are 250k times bigger than 1992. When grandma gave me a 2 dollar bill. I love picking random end points and equating it to net assets. Would love to see you networth/ contributions trend over time so we can all see how you predicted both bubbles.
Well they weren't random, I said I've been investing for about 20 years, so I picked 1996 as 20 years ago. But yes, as I'd started work in 1994, it was a low base - it was about half of our annual income at that time - which is why I also gave 2000 as a base, as asked.
K I started investing at 10 I really did so that would have been 1996. I have 5k so I've seen 10000% growth over my investing career. I made money trying to pick stocks and time the market but it wasn't that much better and sometimes worse than the overall market gains. Apparently I needed a subscription to the economist. Must be one of life's best secrets. Started indexing after I found this and boggleheads and I was searching bc I barely bwat the market in 2013 with some nicely timed Tesla plays. To each their own but it's highly unlikely youre going to be the market long-term trying to time. Plus it's not predictable. If it was fund managers would be taking it in timing it.
I've been thinking about how to reply to this. I wasn't really trying to say, look at me woo hoo I can multiply my net assets by 100 times in 20 years... I'm the greatest! I certainly don't think that will happen in 20 years, because, as you know when you start investing the amount you put in each year is the dominant factor, so even if you only put in $1 the first year, and $1 the next, your net assets have doubled.
I was trying to answer fruganacho who was asking, if I'm so good, why haven't I retired. So the main point I was trying to show, was that because my net assets have grown by about 100 since then, I could retire, something like almost 3 times over, if I was still spending money as I was, back then. But I haven't my spending has multiplied by about 5, so I'm consequently, still a bit short.
Frankly, I'm still surprised how long this general thread has gone on for. Shiller has published research saying if you buy when CAPE is low, and sell when it is high, you would beat the market over the last ~130 odd years - so I've thought claiming avoiding buying in bubbles wasn't that argumentative. In other threads, I've discussed my belief that buying value stocks (i.e. low PE, high dividend, high ROE) has research to say that that can beat the market - which I think is much more controversial, and I don't think they've gotten this convoluted - still its been a bit interesting going through and pulling out some of my old data.
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Faramund, just keep doing what you're doing. Around here and Bogleheads, people can'y possibly believe that anyone could ever disprove John Bogle's "proof" despite the fact that a small minority of investors doing long-term value investing absolutely do beat the indexes consistently, year after year. This is what Warren Buffet does, his mentors and teachers did it too. The reason hedge funds and mutual funds don't beat indexes more than 50% of the time is because they are constrained by short term thinking. People who think in 20+ year time horizons absolutely beat the indexes.
I personally (and most people) don't have the knowledge or time required to investigate companies or other assets adequately in order to do true long term value investing but some people absolutely do.
Thanks for the comments, I really don't mean to be controversial. When I started buying shares, I knew about diversity, market efficiency and bubbles. So to begin with, I thought just buy anything - it doesn't really matter because the markets are efficient. But over time, I noticed that the companies I held that didn't pay dividends, performed very badly, and so I stopped buying them. A short while after that I heard about the wonders of index funds, and so thought, ok, I'll buy some of them, and they'll outperform my average performance, and then I'll give up on buying individual shares.. well, I'm still waiting.. so I know the arguments for indexing, and yet...
So every so often I feel almost obliged to point out, that there is evidence that markets aren't fully efficient - and that gives opportunities for out performance, but yes, its not easy.
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I was hoping you'd go to shiller so what's your shiller number. in 2008 it was 24. We're pushing 27 now but you're saying its fine and you're still pumping money in. But yet you predicted 08. Sounds questionable. So where is that number. And if you look at the 2000 bubble. You must have been investing in bonds in 96 bc it was higher then than it was in 08. And you'd have stayed in bonds til 04. Just trying to figure out your strategy that you still have yet to layout in black and white besides just saying I can predict the future and pointing at a past event. Just so excited you went shiller with this right now. Bc I love shiller my retirement date will be based on it more or less bc it tracks swr very well.
So layout your strategy
You said you started investing in 96. Yet predicted the 2k bubble and the 2008 bubble. Yet using shiller it doesn't add up.
Your conversation just keeps changing in this thread it has evolved from predicting 08 and 2k to picking value stocks trying to use the same strategy. If I was that good at beating indexes I'd be leveraged to the fucking hilt just destroying value plays as you've said in your last statement.
You'd be retired doing this full time if you were that good at it but you aren't which begs forummm's first question.
I mean beating indexes on your own typically is what RE guys do and they do it well and guess what the basis is leverage.
What you're doing is walking into a room and telling everyone. I CAN COUNT A SIX DECK SHOE. no you can't.(general opinion around here) But if you could why aren't you rich as shit ?????
That's my and I believe others issue with your claims.
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I was hoping you'd go to shiller so what's your shiller number. in 2008 it was 24. We're pushing 27 now but you're saying its fine and you're still pumping money in. But yet you predicted 08. Sounds questionable. So where is that number. And if you look at the 2000 bubble. You must have been investing in bonds in 96 bc it was higher then than it was in 08. And you'd have stayed in bonds til 04. Just trying to figure out your strategy that you still have yet to layout in black and white besides just saying I can predict the future and pointing at a past event. Just so excited you went shiller with this right now. Bc I love shiller my retirement date will be based on it more or less bc it tracks swr very well.
So layout your strategy
You said you started investing in 96. Yet predicted the 2k bubble and the 2008 bubble. Yet using shiller it doesn't add up.
Your conversation just keeps changing in this thread it has evolved from predicting 08 and 2k to picking value stocks trying to use the same strategy. If I was that good at beating indexes I'd be leveraged to the fucking hilt just destroying value plays as you've said in your last statement.
You'd be retired doing this full time if you were that good at it but you aren't which begs forummm's first question.
I mean beating indexes on your own typically is what RE guys do and they do it well and guess what the basis is leverage.
What you're doing is walking into a room and telling everyone. I CAN COUNT A SIX DECK SHOE. no you can't.(general opinion around here) But if you could why aren't you rich as shit ?????
That's my and I believe others issue with your claims.
First, I didn't talk about Shiller because I use Shiller, I mentioned Shiller because his work shows that its at least possible to take advantage of the bubble patterns that occur in the market.
The reason I use phrases like my bubble sense, is that when I previously thought bubbles occurred - it wasn't in anyway systematic - unlike Shiller.
Anyway, as to the rest of your post about why I don't think there's currently a bubble.
First, I'm in Australia, and our PEs are much lower than in the US, so I don't think the equivalent of US CAPE is signalling anything here.
So, as to why I think at the moment the US isn't in a bubble, even though CAPE is high. At the moment I think the reason why CAPE is high, is that the main alternative - bonds - is really unattractive. If I had to invest in the US, and choose between shares and bonds - I'd go for shares because of that.
Moreover, there just doesn't seem to be any 'hype' about shares - if anything it seems more like, well put money in shares because there isn't any good alternative - but be unhappy about it.
Bubbles often have a flood of IPOs as the finance system tries to churn out (bad) things for people to buy, and that also doesn't seem to be happening.
In larger terms, I think we're in a post-1928, -1880 (at least in Australia) situation, where the crash is so bad, people are scarred off being exuberant about shares for another generation. So I don't think there'll be another bubble in the Western world for at least another 10 years, then we'll probably go back to one every 10 years or so.
I'm trying to work out a way of being more systematic about detecting bubbles, then just an informed feeling, but I haven't had a chance to test it going forward, so until I've been through another couple of bubbles, I'm not going to make any claims about how good it is.. so maybe in 20 odd years I'll be ready to do so.
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The shiller isn't exceptionally high now it's producing a slightly less that a 4% swr in 2008 it was producing a higher than 4% swr. It was over 32 in 1998. But kept running up thru 2001 which if tracking shiller to predict a bubble what year did you predict it in. Likely would have been 1998-99 and you'd have missed a run up. It's why market timing doesn't work.
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A great performer for me was Jarden (now Newell) that I purchased in early 2013 and sold in 2015 for > 100% gains. That said, some other investments (such as in oil/gas) did not pay out well and my overall portfolio would've done a little better in an S&P index. Now I'm just invested in Vanguard funds and don't bother trying to pick stocks or time the market.
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I picked up a chunk of RSX for 14.09 back in January 2015 when everyone was freaking out about the ruble and people were talking about catching a falling knife.
Got a .52 distribution in 2015
Just liquidated the entire position for around 21.30
Total gain over the 23 month span was ~55%
Unfortunately, haven't seen anything else that was pushed crazy low for (imo) emotional reasons so that's been my only offbeat investment other than typical 3 fund stuff. Currently increasing bond allocation from 5% to 15% since that seems to be what people are down on at the moment and will keep my eyes open for other opportunities.
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Bought $10,500 in NVDA stock on 8/15 around $63.14. 11/11 it jumps 30% and has been going up since. It just closed above $100/share yesterday.
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Bought $10,500 in NVDA stock on 8/15 around $63.14. 11/11 it jumps 30% and has been going up since. It just closed above $100/share yesterday.
Nice. Let us know when you sell.
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I'm in banking and twice this year the entire sector sold off hard, once due to the scare in January about Oil and rapidly rising problem loans and secondly when Brexit happened. The proliferation of ETFs cause people to sell the whole market or whole sector.
Both times I bought a lot of stock in banks that had no exposure to either (like Bank of Hawaii and SunTrust).
Unfortunately I sold too soon based on the surprise election win, I'd be more tempted to short the bank's now.
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Bought AMD shares when it was $2 per share in March this year, after a few months, sold at $8 because I didn't think it would go higher...now it's up to $10 but still nice little profit.
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I've been struggling with ways to find stocks to buy apart from the news cycle. I'm worried that if a company is in the news, the hype is already contaminating the price, often to the upside.
But, gosh, it seems like whatever I look at (and don't buy) is going up 20% at the drop of a hat.
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I've been struggling with ways to find stocks to buy apart from the news cycle. I'm worried that if a company is in the news, the hype is already contaminating the price, often to the upside.
But, gosh, it seems like whatever I look at (and don't buy) is going up 20% at the drop of a hat.
Play with it for a while. Give yourself $50k of monopoly money, but be serious about it. Do whatever you do and "Buy" and "Sell" when you think it has dropped and when you think it will rebound and sell when its there. See how you do.
Then compare that to if you had left it in an index fund. I've done it before and found that I can generally do a bit better than the index--but it isn't better enough to actually do it for real, especially since I'm not batting 100 with it--I could have one bad one and it would be a much bigger deal; whereas the index funds I don't notice. Not to mention the tax implications, which I never even bothered to figure out.
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My own example of market timing win has just been lucky timing due my career cycles.
Graduated in June 2008, then got my first job. My employer had a 1.5% match on your first 2% contribution. A couple of smart friends of mine told me to at least contribute to get the match, but due to the being busy with all the new responsibilities of the new job, I didnt get around to setting up my 401k contribution until early 2009. Of course I had heard of the huge crash that had been going on at that time, but I had really no idea I was buying in at the bottom. Made steady contributions all the way up.
In mid 2012, got a new job with 3x (!) the pay. By this time I started reading more bogleheads, and immediately set my contributions to max my 403b and 457 (18k each). Had not found MMM then but I knew this was the right thing to do. I was able to enjoy the huge run ups in 2012, 2013, and 2014 with my new max contributions.
Not really "market timing" the way most people think about it. Just lucky that the times I have had huge income increases have coincided right before huge market run ups. Of course, anyone with steady employment these last 8 years could claim the same.
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In late 2008/early 2009 we had a pile of cash tied up due to a relocation, potential real estate transaction, and uncertain tax situation. All these things just happened to get resolved in early 2009 which meant we had a bunch of cash sitting on the sidelines. This was the depths of the financial crisis.
We lump sum invested it in an index fund even though it was difficult emotionally since everyone was freaking out about the market and the future - in hindsight it's easy to forget how scared everyone was at that time. Our purely accidental timing was impeccable, March of 2009, the low point of the market.
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I have benefitted from good timing in the job market (started first job after school in Sep. 2008), but I did an experiment with my christmas card list and looked up some friends on zillow. It sure seems like a bunch of them bought houses for $350k-$450k in 2011, and those houses today are appraising for $750!
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Great thread Sol - thank you.
My own story involves three - 2 of which I have already read here.
1st was way back in 2009 - when there was a "semi-flash crash" of banks and Bank of America shot down to $3-ish dollars. Knowing they were "too big to fail" I threw $1000 at it. Still have it sitting there. The other was 2000 shares of Sirius (SIRI) when it went down to around $0.30. Lastly - when Oil and Energy was tanking bought a pile of VDE. Still sitting on all of them - so these are really unrealized gains.
I do this only with my play money - and what I feel I can honestly lose.
But this sort of investing advice comes straight from out classic movie - CaddyShack - when Rodney Dangerfield takes a call on the course and states "... everyone is buying? SELL !!!! Everyone is selling? BUY !!!!"
Seems to work pretty well.
Oh - and one more.... when Orbital (Rockets) crashed on their launch out of Virginia - I bought a handful. Like they say - when there is blood on the street, buy property !!!!
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Great thread Sol - thank you.
My own story involves three - 2 of which I have already read here.
1st was way back in 2009 - when there was a "semi-flash crash" of banks and Bank of America shot down to $3-ish dollars. Knowing they were "too big to fail" I threw $1000 at it. Still have it sitting there. The other was 2000 shares of Sirius (SIRI) when it went down to around $0.30. Lastly - when Oil and Energy was tanking bought a pile of VDE. Still sitting on all of them - so these are really unrealized gains.
I do this only with my play money - and what I feel I can honestly lose.
But this sort of investing advice comes straight from out classic movie - CaddyShack - when Rodney Dangerfield takes a call on the course and states "... everyone is buying? SELL !!!! Everyone is selling? BUY !!!!"
Seems to work pretty well.
Oh - and one more.... when Orbital (Rockets) crashed on their launch out of Virginia - I bought a handful. Like they say - when there is blood on the street, buy property !!!!
How did the sausage investment work out for you?
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How did the sausage investment work out for you?
Not bad. I was casing it for a while, but the job got too tough, especially since the boss' kid was a brat. You never sausage a bad place to work. Those situations are the wurst.
Frankly, I figured if I could FIRE, I would be a weiner !!!!
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payday today includes our annual bonus. Wish the market was lower so I could go, ahem, shopping.
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Great thread Sol - thank you.
My own story involves three - 2 of which I have already read here.
1st was way back in 2009 - when there was a "semi-flash crash" of banks and Bank of America shot down to $3-ish dollars. Knowing they were "too big to fail" I threw $1000 at it. Still have it sitting there. The other was 2000 shares of Sirius (SIRI) when it went down to around $0.30. Lastly - when Oil and Energy was tanking bought a pile of VDE. Still sitting on all of them - so these are really unrealized gains.
I do this only with my play money - and what I feel I can honestly lose.
But this sort of investing advice comes straight from out classic movie - CaddyShack - when Rodney Dangerfield takes a call on the course and states "... everyone is buying? SELL !!!! Everyone is selling? BUY !!!!"
Seems to work pretty well.
Oh - and one more.... when Orbital (Rockets) crashed on their launch out of Virginia - I bought a handful. Like they say - when there is blood on the street, buy property !!!!
It was funny because I was just going to write about 2009 and banks when I skimmed through and caught your fortunate timing. I was a bit more aggressive. I bought $30k in BAC when it dipped under $3 and rode it up to $12. That was my biggest and best timing bet and I was a nervous wreck the whole time. Never again.
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I bought 1,000 shares of WMB when it dipped to around $13 sometime in 2009 I believe. The price spiked about a year and half ago iirc. Its when ETE was bidding on them and i sold half my shares at around $65. I probably should have sold them all...
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Trying to time the market is a rookie investor mistake, but sometimes it happens by accident. Please share your most fortuitous timing wins.
Tis on my mind because I was buying a little vde on the side during the oil crash. My best purchase was an intraday low on Jan 25 for $68.76, which today is up to $97.19. I made a 42% return in only 4.5 months! I'm rich! Let's see, that works out to... $28.43 in profit on my 1 share purchased that day. Well shit.
Anybody else?
I disagree that timing the market is a mistake.
The market regularly overreacts to news and a stocks value 'in theory' will drop 20-30% in a day.
If and when that happens - if the market is wrong, its a great idea to buy that stock.
Two occasions that worked well for me is
a) Volkswagen stock dropped like a rock when the emissions scandal hit then recovered most of the
drop in the next few weeks
b) When the Brexit referendum voted 'leave' UK housebuilders lost 35-40% of the value in the first
hour of trading. They then recovered most of that in the next four weeks.
So if its a good company having temporary bad news, jump on it...
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payday today includes our annual bonus. Wish the market was lower so I could go, ahem, shopping.
It might be as low as it ever gets again!
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Finding MMM 2 years ago and throwing all my savings into Vanguard Index. It's been pretty much bull market since then. Does that count?