Author Topic: Welp, I'm going to take a stab at timing the market  (Read 97730 times)

MissNancyPryor

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Re: Welp, I'm going to take a stab at timing the market
« Reply #600 on: March 18, 2020, 10:46:16 AM »
I am not arguing what was a thing or not a thing.  Those events did not cause the market crash JoT needed to make his gambit successful.  The Russia report was his first prediction that would make the market tank and it did not.  There were many events that didn't make it go down all this last year; it is only the virus that has done that.  And despite the massive run up JoT says he managed to wait it out.

frugalnacho

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Re: Welp, I'm going to take a stab at timing the market
« Reply #601 on: March 18, 2020, 11:15:35 AM »
I am not arguing what was a thing or not a thing.  Those events did not cause the market crash JoT needed to make his gambit successful.  The Russia report was his first prediction that would make the market tank and it did not.  There were many events that didn't make it go down all this last year; it is only the virus that has done that.  And despite the massive run up JoT says he managed to wait it out.

I'm reminded of all the threads from 2013, 2014, 2015, etc where someone claimed the top was in for X reason and they were getting out of the market and we never heard from them again.  I'm assuming because they were crying about missing the subsequent years of gains from the bull market. 

MissNancyPryor

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Re: Welp, I'm going to take a stab at timing the market
« Reply #602 on: March 18, 2020, 11:29:57 AM »
They did get back in but will never admit it.  No one likes to talk about the hands they lost, only their aces.

JL Collins bailed out in 1987 at the bottom but at least he is teaching others why that was a bad idea. 

Chuck

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Re: Welp, I'm going to take a stab at timing the market
« Reply #603 on: March 18, 2020, 11:35:02 AM »
They did get back in but will never admit it.  No one likes to talk about the hands they lost, only their aces.

JL Collins bailed out in 1987 at the bottom but at least he is teaching others why that was a bad idea.
The secret is bailing out when things are bad, but not as bad as they eventually get.

This situation has been a gift financially because the damage can be estimated well in advance: 2-2.5 Spread, 1-4% fatality. No vaccine. Many, many, many people will lose their lives before we can mitigate this. A true flattening of the curve will take 12 months or more of the current economic shutdown. Pick a stock market bottom in your mind and slice it in half.

MissNancyPryor

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Re: Welp, I'm going to take a stab at timing the market
« Reply #604 on: March 18, 2020, 12:19:27 PM »
I hope you come back and tell us how you were wrong one day. 

Full_Beard

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Re: Welp, I'm going to take a stab at timing the market
« Reply #605 on: March 18, 2020, 04:18:02 PM »
It is luck. And some educating guessing perhaps. But, no one, save some professionals (who too are wrong quite a bit), can make money long term from timing.

I'm happy to share what I did and haven't yet finalized. On April 2, 2019, I sold all my holdings in my retirement accounts (75% SP500, 25% stocks) and bought bonds. It was worth $1.2M then; today, it's worth about $1.3M. I just sold the bonds and am going to repurchase my holdings soon.

I based my guess on (a) the high Schiller PE; (b) my concern for the long term effects from Trump's tax cuts and tariffs; (c) Trump's unabashed willingness to publicly punch the Fed and Fed Chairman; (d) Trump's foreign policy which generally involved alienating our traditional, staunch allies; and (e) my lack of confidence in Trump's leadership. That sounds very political, and perhaps it can't be divorced from the political nature of it, but my advice on page 4 of this thread was that such decisions shouldn't be political and I didn't consider mine to be that at the time.

In any event, I put sideboards on myself. When I sold, I figured I'd stay on the sidelines until a 20% dip or a 20% climb, or if neither, a change in leadership. The SP500 was valued around 2850 when I sold and my target re-entry was 2300. I was mentally ready to take the 20% lost opportunity costs going into my 1-year sale anniversary. I certainly could not have predicted, or would have wished for, a pandemic such as this one. It's pretty horrible.

BicycleB

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Re: Welp, I'm going to take a stab at timing the market
« Reply #606 on: March 18, 2020, 07:30:23 PM »
They did get back in but will never admit it.  No one likes to talk about the hands they lost, only their aces.

JL Collins bailed out in 1987 at the bottom but at least he is teaching others why that was a bad idea.
The secret is bailing out when things are bad, but not as bad as they eventually get.

This situation has been a gift financially because the damage can be estimated well in advance: 2-2.5 Spread, 1-4% fatality. No vaccine. Many, many, many people will lose their lives before we can mitigate this. A true flattening of the curve will take 12 months or more of the current economic shutdown. Pick a stock market bottom in your mind and slice it in half.

This "gift" - @Chuck, do like Full_Beard and tell us how you are operationalizing it. Did you sell stock and go to cash? When? With all of your marbles, or some? What bottom-sliced-in-half do you anticipate? Are you committed to cash for 12 months from now? What are your criteria for buying back in?
« Last Edit: March 19, 2020, 01:10:29 PM by BicycleB »

frugalnacho

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Re: Welp, I'm going to take a stab at timing the market
« Reply #607 on: March 18, 2020, 08:07:05 PM »
It's so easy.  It's so obvious the power Ball was going to be 08, y'all should have just picked the winning numbers like I did.

I am somewhat stunned by the number of people that make it sound so simple like that. Like the entire world is full of retards that can't tell the future. Just sell high, then buy back in low, it's so obvious guys. It's practically fool proof.

junioroldtimer

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Re: Welp, I'm going to take a stab at timing the market
« Reply #608 on: March 21, 2020, 02:07:00 PM »
Purchased 17.8440 additional shares @ $56.04 each.

dragoncar

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Re: Welp, I'm going to take a stab at timing the market
« Reply #609 on: March 21, 2020, 03:14:27 PM »
Purchased 17.8440 additional shares @ $56.04 each.

Do come back regularly to update us.  You donít need to engage with people crapping on you but it would be nice to hear from you more often!

Also I think you get more crap when you disappear... most of us assumed you were not reading the thread and never como  back

waltworks

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Re: Welp, I'm going to take a stab at timing the market
« Reply #610 on: March 21, 2020, 03:39:42 PM »
Yeah, 99/100 market timing threads the OP just ghosts forever.

Keep us updated! I bought $1500ish of shares on Friday too, though mine was VTIAX. Foreign stuff is getting stupid cheap.

-W

junioroldtimer

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Re: Welp, I'm going to take a stab at timing the market
« Reply #611 on: March 27, 2020, 10:26:31 AM »
This move might have most forum regulars face palming (more than this entire thread).

Last night I put in a trade that was executed this morning selling 469.41 shares @ $63.91 each, taking a loss of $1,046.78 from my purchase on 3/15. My hypothesis is that VTSAX will again be lower than its current price at which point I will buy back in at a discount. Keep your fingers crossed for me and stay healthy everyone. 


dividendman

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Re: Welp, I'm going to take a stab at timing the market
« Reply #612 on: March 27, 2020, 10:31:42 AM »
This move might have most forum regulars face palming (more than this entire thread).

Last night I put in a trade that was executed this morning selling 469.41 shares @ $63.91 each, taking a loss of $1,046.78 from my purchase on 3/15. My hypothesis is that VTSAX will again be lower than its current price at which point I will buy back in at a discount. Keep your fingers crossed for me and stay healthy everyone.

Good luck man.

utaca

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Re: Welp, I'm going to take a stab at timing the market
« Reply #613 on: March 27, 2020, 10:40:38 AM »
Yeah, 99/100 market timing threads the OP just ghosts forever.


That's what it seems like. But I find these posts super interesting because they show what usually goes wrong when a person tries to time the market. And if the person actually beats the market - good for them!

waltworks

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Re: Welp, I'm going to take a stab at timing the market
« Reply #614 on: March 27, 2020, 11:19:58 AM »
In other news, I bought my usual $1500 of VTIAX this morning.

-W

frugalnacho

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Re: Welp, I'm going to take a stab at timing the market
« Reply #615 on: March 27, 2020, 11:28:09 AM »
Yeah, 99/100 market timing threads the OP just ghosts forever.


That's what it seems like. But I find these posts super interesting because they show what usually goes wrong when a person tries to time the market. And if the person actually beats the market - good for them!

He's already back at it though.  He jumped back in in March, and is already back out as of 3 posts ago.  When you dance in and out you have to be correct every time.  Being right initially usually just emboldens you to keep taking that losing bet.  Just by the sheer volume of people that try to time the market a bunch of them are likely to be correct at least some of the time.  Similar to having a big coin flip guessing contest - with enough participants the statistical distribution means some people will appear to be very good at guessing coin flips, much better than the average.  It has to be that way.

Good luck to the op but he is playing with fire.  He has publicly recorded multiple times now that is has tried to time the market. 

junioroldtimer

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Re: Welp, I'm going to take a stab at timing the market
« Reply #616 on: March 30, 2020, 11:58:12 AM »
What I didn't account for were the brakes Vanguard has implemented and the month long period between selling and buying VTSAX.

AdrianC

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Re: Welp, I'm going to take a stab at timing the market
« Reply #617 on: March 30, 2020, 12:03:22 PM »
What I didn't account for were the brakes Vanguard has implemented and the month long period between selling and buying VTSAX.
Use VTI and know what price you're getting.

junioroldtimer

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Re: Welp, I'm going to take a stab at timing the market
« Reply #618 on: March 31, 2020, 09:24:57 AM »
What I didn't account for were the brakes Vanguard has implemented and the month long period between selling and buying VTSAX.
Use VTI and know what price you're getting.

Thanks -- what did you mean by the second half of your statement? "Know what you're getting"?

frugalnacho

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Re: Welp, I'm going to take a stab at timing the market
« Reply #619 on: March 31, 2020, 09:50:19 AM »
What I didn't account for were the brakes Vanguard has implemented and the month long period between selling and buying VTSAX.
Use VTI and know what price you're getting.

Thanks -- what did you mean by the second half of your statement? "Know what you're getting"?

VTI is an ETF and is traded in real time.  VTSAX is a mutual fund and is done at "end of day" pricing.

If you place an order for VTI right now, you pay the current price and the transaction is almost immediate.  If you place an order for VTSAX right now, you will pay whatever the price closes out at at the end of the day.  I got boned by this a couple weeks ago when Trump held a press conference and declared a state of emergency.  My order was already placed, then in the last 30 minutes of trading the market shot up at a record pace and ended up like 9% for no fucking reason, and my transaction completed at the +9% end of day price. 

talltexan

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Re: Welp, I'm going to take a stab at timing the market
« Reply #620 on: March 31, 2020, 09:54:28 AM »
I remember that 9% jump in the last hour.

It happened on a payday, so it affected the clearing price for retirement account purchases. And it all evaporated in trading on Monday.

junioroldtimer

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Re: Welp, I'm going to take a stab at timing the market
« Reply #621 on: March 31, 2020, 09:55:12 AM »
Ouch! I now understand. Thanks for explaining.

waltworks

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Re: Welp, I'm going to take a stab at timing the market
« Reply #622 on: March 31, 2020, 10:17:36 AM »
Dunning-Kruger inspired facepalm...

Yes, you want VTI if you want to jump in and out of the market in a time of high volatility. You are giving up some mutual fund conveniences (automatic investing and such) but that's probably not a big deal. And you save 1 basis point of expenses, woot.

I don't remember if you're actually still holding any VTSAX but you can call Vanguard and have them convert it to VTI (not a taxable event). You can't convert back, though, without selling VTI (taxable event) and buying VTSAX again.

-W
« Last Edit: March 31, 2020, 10:21:43 AM by waltworks »

MustacheAndaHalf

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Re: Welp, I'm going to take a stab at timing the market
« Reply #623 on: March 31, 2020, 10:27:29 AM »
If you switch to ETFs for market timing, it's easy to violate SEC regulation T.  That happens if you buy an ETF, and the same day - or in the next 2 trading days - sell the same ETF.  It's called "free riding" because you avoided the settlement by selling early.
https://en.wikipedia.org/wiki/Free_riding
https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_cashaccounts

One perfectly legal way to avoid it is have multiple ETFs, like "VTI" and "SCHX".   Maybe you only do sales of SCHX, and only buy VTI for awhile.  When it's been 3 days and you haven't done any trades, you can flip it around: all sales of VTI shares, all buys use SCHX shares (both are $0/trade at Vanguard).

Jack0Life

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Re: Welp, I'm going to take a stab at timing the market
« Reply #624 on: April 01, 2020, 10:03:30 AM »
What I didn't account for were the brakes Vanguard has implemented and the month long period between selling and buying VTSAX.
Use VTI and know what price you're getting.

Thanks -- what did you mean by the second half of your statement? "Know what you're getting"?

VTI is an ETF and is traded in real time.  VTSAX is a mutual fund and is done at "end of day" pricing.

If you place an order for VTI right now, you pay the current price and the transaction is almost immediate.  If you place an order for VTSAX right now, you will pay whatever the price closes out at at the end of the day.  I got boned by this a couple weeks ago when Trump held a press conference and declared a state of emergency.  My order was already placed, then in the last 30 minutes of trading the market shot up at a record pace and ended up like 9% for no fucking reason, and my transaction completed at the +9% end of day price.

Yeah I learned the hard way too so now whenever I decide to reallocate, I wait till 3:55 and later before I hit the SUBMIT.

Jack0Life

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Re: Welp, I'm going to take a stab at timing the market
« Reply #625 on: April 01, 2020, 10:06:15 AM »
What I didn't account for were the brakes Vanguard has implemented and the month long period between selling and buying VTSAX.

What I do is move it between various Index funds.
Go from VTSAX to VBTLX(bonds).
VBTLX to VLCAX(large market index).
VLCAX to VLGSX(different bonds).
VLGSX to another Index.
You can do this while waiting out the 1 month restriction.

ChpBstrd

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Re: Welp, I'm going to take a stab at timing the market
« Reply #626 on: April 01, 2020, 02:25:57 PM »
I still canít comprehend why VTSAX is preferred over VTI, but thatís been asked in other posts.

Jack0Life

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Re: Welp, I'm going to take a stab at timing the market
« Reply #627 on: April 01, 2020, 02:44:09 PM »
I still canít comprehend why VTSAX is preferred over VTI, but thatís been asked in other posts.

Most investors are beginners and passive.
First thing they learn is to buy mutual funds and just let it grow.
Reading MMM about VTSAX as the simpliest way to invest helps.
I include myself. Put all my investment in VTSAX and forget it.
Most investors are passive. They aren't going to move funds around so no need to buy VTI.
Once this crisis began and I started moving funds around, you can see the limitation with mutual funds. Its only now that I started looking into VTI

BigMoneyJim

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Re: Welp, I'm going to take a stab at timing the market
« Reply #628 on: April 01, 2020, 04:00:57 PM »
I still canít comprehend why VTSAX is preferred over VTI, but thatís been asked in other posts.

ETFs are relatively newer, until recently cost money to trade, require a brokerage account with the accompanying pushy sales pitches, and as a passive investor I just couldn't find a compelling reason to try ETFs for a long, long time.

Most of the oft-touted advantages don't apply to a passive indexer willing to ride out dips, recessions, and depressions.

I only started dabbling with them in the past year since so many became free to trade, just to get a little experience. I discovered two advantages that *do* apply to a passive investor like me:

  • In a situation where others are liquidating en masse, it could force an open-ended fund to sell shares to redeem which indirectly impacts my shares, where in an ETF others selling does not affect me, aside from the potential danger of price straying from NAV, but as a ride-it-out guy short term things like that don't bug me.
  • Just figured this out a day or two ago: as a retiree who is spending down his cash cushion, I was starting to ask myself what price would I like to re-up the cushion, because I'll probably have to pick a point in the next two years presuming things don't go back to all-time highs by then. I've been watching the market a bit too closely lately and have seen multiple large-downward end of day swings that would be bad for redeeming open-ended funds. But I realized I can set a 60-day limit order for my ETFs! So I actually picked a number and placed an order. If the market goes irrational exuberance on us, I don't have to be there waiting to pull the trigger; my ETF order will do it for me, and at the price I want and not the one I hope.

Psychstache

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Re: Welp, I'm going to take a stab at timing the market
« Reply #629 on: April 01, 2020, 07:46:55 PM »
I still canít comprehend why VTSAX is preferred over VTI, but thatís been asked in other posts.

Could also be an issue of access. I can buy VTSAX in my employer sponsored tax advantaged accounts (where 90+% of my invested money is) but not VTI.

moneytaichi

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Re: Welp, I'm going to take a stab at timing the market
« Reply #630 on: April 07, 2020, 10:10:26 PM »
What I didn't account for were the brakes Vanguard has implemented and the month long period between selling and buying VTSAX.
Use VTI and know what price you're getting.

Thanks -- what did you mean by the second half of your statement? "Know what you're getting"?

VTI is an ETF and is traded in real time.  VTSAX is a mutual fund and is done at "end of day" pricing.

If you place an order for VTI right now, you pay the current price and the transaction is almost immediate.  If you place an order for VTSAX right now, you will pay whatever the price closes out at at the end of the day.  I got boned by this a couple weeks ago when Trump held a press conference and declared a state of emergency.  My order was already placed, then in the last 30 minutes of trading the market shot up at a record pace and ended up like 9% for no fucking reason, and my transaction completed at the +9% end of day price.

I had the same experience when buying VIIIX and learned it the hard way. My retirement is in Fidelity, which only offers mutual funds. Now I use the prices of VTI (ETF) as a bench mark for VIIIX (mutual fund). If the VTI's prices rise or drop to my desired % change, I'd issue VIIIX transaction in the last 5 minutes and pray that neither my computer nor the trading system will crash in the last 5 minutes :-) It worked out well for me for a couple of transactions already.

dragoncar

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Re: Welp, I'm going to take a stab at timing the market
« Reply #631 on: May 28, 2020, 01:22:25 AM »
This move might have most forum regulars face palming (more than this entire thread).

Last night I put in a trade that was executed this morning selling 469.41 shares @ $63.91 each, taking a loss of $1,046.78 from my purchase on 3/15. My hypothesis is that VTSAX will again be lower than its current price at which point I will buy back in at a discount. Keep your fingers crossed for me and stay healthy everyone.

Where we at now?

mrmoonymartian

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Re: Welp, I'm going to take a stab at timing the market
« Reply #632 on: May 28, 2020, 01:47:01 AM »
This move might have most forum regulars face palming (more than this entire thread).

Last night I put in a trade that was executed this morning selling 469.41 shares @ $63.91 each, taking a loss of $1,046.78 from my purchase on 3/15. My hypothesis is that VTSAX will again be lower than its current price at which point I will buy back in at a discount. Keep your fingers crossed for me and stay healthy everyone.

Where we at now?
74.80 facepalms.

The_Big_H

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Re: Welp, I'm going to take a stab at timing the market
« Reply #633 on: May 28, 2020, 02:44:42 AM »
This move might have most forum regulars face palming (more than this entire thread).

Last night I put in a trade that was executed this morning selling 469.41 shares @ $63.91 each, taking a loss of $1,046.78 from my purchase on 3/15. My hypothesis is that VTSAX will again be lower than its current price at which point I will buy back in at a discount. Keep your fingers crossed for me and stay healthy everyone.

Where we at now?

Seeing as how the price only dipped minorly (<5%) from 3/27 - 4/6 I think we are at a $1046.78 lesson in market timing.

MustacheAndaHalf

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Re: Welp, I'm going to take a stab at timing the market
« Reply #634 on: May 28, 2020, 08:42:25 AM »
What I didn't account for were the brakes Vanguard has implemented and the month long period between selling and buying VTSAX.
You can avoid that by switching to ETF shares.  VTSAX and VTI are the exact same thing - Vanguard actually pools them together, behind the scenes, using some patented approach.  I believe you can even ask Vanguard to convert VTSAX into VTI shares.

With ETF shares, there's no monthly restrictions.  For VTI in particular, it's very frequently traded, so there isn't even a bid-ask spread.  Both buys and sells trade in the middle of a 1 penny range.  ETF trades cost $0 at Vanguard, so you don't pay anything to trade shares of VTI.

Consider if you don't switch to ETF shares, the next delayed sale might go against you.  For example, stocks dropped on 3/12, when your sell order got in too late.  The next day, President Trump declared a state of emergency, markets made gains, and after that your sell order executed.  Compare that delay to selling VTI (Vanguard Total Stock Market, ETF shares)... during market hours, the sale happens immediately.

Full_Beard

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Re: Welp, I'm going to take a stab at timing the market
« Reply #635 on: June 02, 2020, 11:38:12 PM »
Where we at now?
That is the $64K question. For some, the markets are still rational and forward-looking. To others, at present, they are unrealistically optimistic in their forward-looking. I'm in the latter category.

1. The earnings in P/E ratios seem totally irrelevant. Sure, we're expecting a turn around, but P/E ratios were already high going into 2020 and now that earnings have taken a massive hit and experts don't expect them to return to 2020 levels from 2 maybe 10 years from now, stock prices are insanely high.

2. Stock buybacks accounted for the single largest source of demand over the last several years. That demand has been significantly diminished.

3. Whether the economy takes off in the 3rd quarter of 2020 or the 3rd quarter of 2021 is 50-50, yet the markets seem think it's almost certainly the 3rd quarter of 2020.

4. Our national debt is over $23 trillion. Yet, you don't hear a whisper about that, even from the fiscal conservatives who couldn't do anything but complain about that since the beginning of time.

5. Unemployment is off the charts. That's not going to snap back into place the month after the vaccine is released.

The bulls among us -- I wish you well and hope my own pessimism is unwarranted. I pulled out of all equities a year ago and remain on the sidelines. I will be fine if all returns to normal and the SP500 never drops below 3000 again. I hope you will be fine it drops to 2000. This isn't a zero sum game; we're here to trade ideas and information, not root for each other's demise.

Cheers.

BigMoneyJim

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Re: Welp, I'm going to take a stab at timing the market
« Reply #636 on: June 03, 2020, 12:04:36 AM »
I pulled out of all equities a year ago and remain on the sidelines. I will be fine if all returns to normal and the SP500 never drops below 3000 again.

I don't know if I'm a bull or bear right now. I'm just really confused about the apparent market optimism versus how the world looks today and how it looked a few months ago when nominal prices were here.

However, do remember that cash also can vary greatly in value. It's been quite a few yearsómaybe 15-20ósince I last believed and argued this, but the time may be coming soon where "cash is overvalued".

Or not.

dragoncar

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Re: Welp, I'm going to take a stab at timing the market
« Reply #637 on: June 03, 2020, 12:13:08 AM »

I pulled out of all equities a year ago and remain on the sidelines. I will be fine if all returns to normal and the SP500 never drops below 3000 again.

Will you buy back in if it never drops again?  If so, at what point?

Full_Beard

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Re: Welp, I'm going to take a stab at timing the market
« Reply #638 on: June 03, 2020, 12:59:51 AM »

Will you buy back in if it never drops again?  If so, at what point?
Yes, extremely likely.

Not sure at what point. Initially, I was thinking if SP500 hit 2300, and then it did rapidly and I took a whiff at a grand slam opportunity (in hindsight, of course). So I don't know. I'd like to see some better fundamentals, better leadership, etc. That would restore my own confidence. I'm not in a rush and will be pleasantly surprised if the SP500 lingers at 3000-3500 over the next 3 years.

MustacheAndaHalf

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Re: Welp, I'm going to take a stab at timing the market
« Reply #639 on: June 03, 2020, 02:33:08 AM »
Full_Beard - Why not invest in international equities, instead?

For me, I plan to keep at least 50% invested (half U.S., half international).  If I make a mistake in market timing, that limits my mistake to one half of my portfolio.

waltworks

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Re: Welp, I'm going to take a stab at timing the market
« Reply #640 on: June 03, 2020, 07:18:28 AM »
Yeah, if you don't like US equities valuations, you should be investing elsewhere, not sitting in cash (especially if you're worried about the national debt/inflation).

But whatever. Some people are not cut out to be in equities. If the S&P takes a dump, I'll buy more. If it doesn't, I'll buy more.

-W

ChpBstrd

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Re: Welp, I'm going to take a stab at timing the market
« Reply #641 on: June 03, 2020, 08:42:46 AM »
Full_Beard - Why not invest in international equities, instead?

Lack of a Powell put?

Full_Beard

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Re: Welp, I'm going to take a stab at timing the market
« Reply #642 on: June 03, 2020, 02:59:21 PM »
The inexplicable response of the U.S. stock markets to the economic situation is also happening around the world (and perhaps inexplicable is the wrong word since explanations are coming out every day). The poster child for that is Iran:

https://www.economist.com/middle-east-and-africa/2020/05/21/why-iran-has-the-worlds-best-performing-stockmarket

And the poster child for the U.S.'s market insanity are the cruise line stocks. Losing $250M per month, can't sail in Canada through early fall or in the U.S. through mid-summer (and maybe longer). And here's a foreboding event: a fishing vessel with 127 crew that instituted pre-boarding testing measures and pre-boarding quarantine measures lasted only a week or so at sea before 85 of those 127 tested positive, forcing the vessel back to port:

https://www.seattletimes.com/seattle-news/american-seafoods-factory-trawler-returns-to-seattle-after-85-crew-members-test-positive-for-covid-19/

Anyone think the cruise lines can institute those relatively strict measures for 4,000 passengers? Actually, they'd have to be stricter because they didn't work.

Morgan Stanley just trashed the cruise line stocks as well. Yet, the market reacts by buying more of them - the prices have been soaring, through today!

I'm sticking to the maxim, be afraid when everyone's greedy and be greedy when everyone's afraid. I personally see us in the greedy phase right now.

Make no mistake - I have moderate confidence in my own lack of confidence. If we have a vaccine by early January - early March, I can see the entire situation becoming a rear-view memory by June 2021 and the summer tourism providing a swift and symbolic boost to world economies. But, my view is that that outcome is less than 50-50 and one I'm not going to wager on. On other hand, it is possible that the large assumption of corporate debt to, in part, finance buybacks for many years eventually comes home to roost, the unemployment numbers were seeing crushes consumer spending for many more months, the government is unwilling or unable to spend its way out of it while holding $25 - $30 trillion in debt, and then there's a significant drop in the prices/values of many companies. We hit bottom somewhere in 2021 or 2022 and then begin a slow climb upward that takes 2-10 years before the market is at its early 2020 high. That scenario seems more likely to me, even though I wouldn't bet the house on that either.

So, here I am, sitting on 20+ years of retirement savings through buy-and-hold investing, unwilling to continue that method given the economic and political situations. I'm okay with that for the time being. I'll get back into stocks in either of the above scenarios; it's just a matter of when. I'm not trying to time the market; I'm hoping to regain confidence in our economic situation.
« Last Edit: June 03, 2020, 03:02:11 PM by Full_Beard »

habanero

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Re: Welp, I'm going to take a stab at timing the market
« Reply #643 on: June 03, 2020, 03:43:22 PM »
I'll be the first to admit that the levels equities trade at currently, or more precisely how fast and sharp the turnaround was make no sense to me whatsoever. But I have read the books, read the posts etc and I have kept to my plan by buying at a steady pace no matter what happens and not sold anything despite it being tempting and as per now, in hindsight, also the wrong thing to do. Per my AA I have a decent amount of cash at hand so I did put some more to work over the last few months then I normally would to "catch up", but in hindsight I should have bought even more equities. But the plan is the plan and it should be stuck to.

What the swift and sharp downturn revealed for me is that I am quite comfy with my current risk level and could increase it a bit over time. I'm currently at about 60/15/25 equities/bonds/cash but that is partly due to the available bond universe is vastly smaller for me than for a US based investor and it doesnt really make that much sense to own bonds and at current yields its not something I really want more of as the upside is very. very small. My "bond" part is not really bonds, but it's FDIC insured bank accounts with a fixed rate for a set time and a weird retirement scheme I won't go into details about but it has bond-like characteristics like a guaranteed minimum return per year  but some limited equity upside sprinkled on top.

I did read an interesting post the other day, point was that people worry about the left tail. But there is a right tail. With money being free at 0% interest rates and the government pretty guaranteeing no defaults and probably willing to support equity markets directly if need be, do you really want to leave out the possibility of a right-tail event?

dragoncar

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Re: Welp, I'm going to take a stab at timing the market
« Reply #644 on: June 03, 2020, 04:39:36 PM »
I still think there is an inflation mystery here.  Inflation was recently reported very low.  Mortgage rates are down, bond rates are down, again implying investors do not fear inflation.  The fed is pulling out all stops. Maybe the SPY lingers around 3000 for a few years but inflation increases (ie inflation-adjusted losses)?


waltworks

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Re: Welp, I'm going to take a stab at timing the market
« Reply #645 on: June 03, 2020, 05:22:15 PM »
So, here I am, sitting on 20+ years of retirement savings through buy-and-hold investing, unwilling to continue that method given the economic and political situations. I'm okay with that for the time being. I'll get back into stocks in either of the above scenarios; it's just a matter of when. I'm not trying to time the market; I'm hoping to regain confidence in our economic situation.

Dude, you gotta own it. What you are doing is the *definition* of market timing.

That's fine, if that's what you want to try to do - I assume you know the odds. It would help if you had a specific plan (ie, "I'll buy back it at level X, unless that doesn't happen within Y months, otherwise I'll buy back in then") because freaking out and selling is easy. Buying back in is what trips people up. If you don't even have a plan for when to do that... well, good luck.

If you've been at this for 20 years hopefully you've seen (like me) a lot of weird stuff that basically goes to show that the market isn't predictable in any useful way. You gotta just figure out an AA that lets you sleep at night and plug away.

-W

Full_Beard

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Re: Welp, I'm going to take a stab at timing the market
« Reply #646 on: June 03, 2020, 05:37:46 PM »
So, here I am, sitting on 20+ years of retirement savings through buy-and-hold investing, unwilling to continue that method given the economic and political situations. I'm okay with that for the time being. I'll get back into stocks in either of the above scenarios; it's just a matter of when. I'm not trying to time the market; I'm hoping to regain confidence in our economic situation.

Dude, you gotta own it. What you are doing is the *definition* of market timing.

That's fine, if that's what you want to try to do - I assume you know the odds. It would help if you had a specific plan (ie, "I'll buy back it at level X, unless that doesn't happen within Y months, otherwise I'll buy back in then") because freaking out and selling is easy. Buying back in is what trips people up. If you don't even have a plan for when to do that... well, good luck.

If you've been at this for 20 years hopefully you've seen (like me) a lot of weird stuff that basically goes to show that the market isn't predictable in any useful way. You gotta just figure out an AA that lets you sleep at night and plug away.

-W

Fair enough. I had said that I'm not trying to time it because I'll happily jump back in with the SP500 at 3500 when the situation normalizes a little. And, for the record, I didn't freak out and sell. I sold in April 2019 for a variety of reasons upon which I reflected and consulted others, such as: (1) I hit an amount on which my wife and I can retire when we're ready and (2) my personal view of the crappy politico-economy and overvalued nature of stocks (and yes, that was looking through a 2019 lens). Certainly, I don't (and couldn't, in hindsight) claim that my personal view is or was "the" right view. It was just right for me. And it's not cash. I'm in pathetic bonds, a fraction of a percent better than cash. :)

What we're seeing now is unprecedented. It's not the Internet bubble of the late 1990s and it's not the mortgage-backed securities sucker hole of the naughts. I will get back in, for sure. And I have some numbers in my mind, but there's a confidence factor that can't be reduced to words that's driving this.

waltworks

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Re: Welp, I'm going to take a stab at timing the market
« Reply #647 on: June 03, 2020, 05:59:16 PM »
What we're seeing now is unprecedented.

Lol. Yes, just like every day when you wake up.

Good luck.

-W

MustacheAndaHalf

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Re: Welp, I'm going to take a stab at timing the market
« Reply #648 on: June 03, 2020, 11:25:46 PM »
There's many articles like this one reporting increased cruise line bookings:
https://globalnews.ca/news/6937576/cruise-bookings-rise-coronavirus/
"Cruise ship bookings jump 600% as Carnival reveals plans to resume trips in August"

I'd agree that sounds too soon, which leads me to the bear case for vaccines.  Historically, a vaccine is not found within a few years of the first outbreak.  There's no vaccine for SARS or MERS, both corona viruses.  The good news and market rally is based on stage I trials, which are the easy part: there is only a 33% failure rate at that stage.

But a counter argument, and the bull case, is that normally most health care research isn't being directed at one disease.  Before 2020, costly approaches to vaccine development were not used - they wouldn't be profitable.  But with almost 8 billion people needing a vaccine, the market suddenly makes new techniques cost effective.  This article claims that vaccine research and production infrastructure will make a permanent step forward as a result of all the recent investment to combat COVID-19:
https://www.genengnews.com/topics/bioprocessing/covid-19-will-have-long-lasting-impact-on-biopharma-manufacturing/

jsloan

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Re: Welp, I'm going to take a stab at timing the market
« Reply #649 on: June 04, 2020, 07:12:49 AM »
I'm a lurker on this website and more active trader than some here, but I wanted to throw in my 2 cents.  You don't have to get it 100% right when timing a bottom or top. You just have to be generally right.  I'm current +10% from my all time high in Feb as of yesterday.  I did pull out my active/retirement funds on Feb and re-entered the market in early April.  I'm also invested in some individual companies and stocks that I feel are still under valued based on the temporary Coronavirus pandemic. 

As of today I'm a successful market timer, if I had just let my investments ride I would still be down about -9%, instead I'm up +10%.  With that said, I don't trust this rally at all and I still have a 40% cash allocation.  I was expecting to get back in the market knowing that it may continue to go down but I would limit my losses, I did not expect the recent growth.  I plan to continue getting back in the market with my remaining cash, but very slowly.  I don't trust the current market for many reasons: Coronavirus 2nd wave, fed printer, civil unrest, continued deregulation and lowered demand.  At this point do we really expect the market to just continue hitting all time highs despite all these issues?