Author Topic: Why I am reducing mkt exposure+have been since 2015.  (Read 181592 times)

Interest Compound

  • Pencil Stache
  • ****
  • Posts: 658
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #500 on: August 08, 2016, 05:01:31 PM »
I will retire before most of you because I am not a market timer, I'm moving average investor; which got me out on December 2015 and back in during march.

I didn't see you post that you felt the market was ripe for reinvesting back in March. Did I miss it?

"No no you see, you're missing it! I don't TIME the market, I jump in and out based on an indicator!"

We've seen this so many times, it's like they're all following the same script!

Step 1: Wait for something to happen in the market.

Step 2: After it happens, tell everyone that not only did you see it coming, but you personally profited from it, and offer a prediction for the future.

Step 3: If your prediction was wrong, repeat from Step 2, even if it directly contradicts your earlier prediction.

...I think we've just been MrPercentaged.

Livewell

  • Stubble
  • **
  • Posts: 179
  • Location: SF Bay Area
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #501 on: August 08, 2016, 05:42:40 PM »
This is all quite entertaining.

if someone is doing their homework they might make more than Dca into index funds - it's possible.  Maybe Cougar is doing that via his market timing but I get the sense by his comment on Jacob that his way is really to be extremely frugal, which is of course a proven path to FI.

End of the day, no single indicator is right all of the time.  unless that indicator is Biff's investing almanac from 2050, odds are not on your side. 

The beauty of Dca and indexing is its ability to give you time back.  find a formula between stocks/bonds/reit whatever and stick to it.   For me, while I still follow the macro stuff I can ignore all the bullshit that gets you into trouble when you invest, like focusing on a single indicator.  Instead I focus on the financial stuff that is important - making more money at my job.  So yeah I could have done more research to grind out that extra few percent if I'm lucky, or I could make 20% more at my job.  Easy decision.


Retire-Canada

  • Walrus Stache
  • *******
  • Posts: 6724
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #502 on: August 08, 2016, 06:19:08 PM »
...I think we've just been MrPercentaged.

It's possible, but there wasn't as much drinking as I would have expected.

2Birds1Stone

  • Walrus Stache
  • *******
  • Posts: 5368
  • Age: 32
  • Location: Earth
  • K Thnx Bye
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #503 on: August 08, 2016, 07:31:23 PM »
Haha, I thought cougars were supposed to be intelligent mammals?

OP can say whatever OP wants to make OP feel better about OP's lackluster decisions.

I don't know about you guys, but I'm up 9.8% YTD.


frugledoc

  • Pencil Stache
  • ****
  • Posts: 641
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #504 on: August 09, 2016, 12:21:29 AM »
Maybe cougar will prove us wrong and actually post just next trades for us on the day he/she does them but I doubt it.

More likely we will get another victory post several months after any significant move,  or if the move doesn't happen, no further posts.

When you've been doing this a while you will meet 100s of Cougars who all song from the same book. 


frugledoc

  • Pencil Stache
  • ****
  • Posts: 641
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #505 on: August 09, 2016, 12:23:36 AM »
What happened to the other investing legend Keith,  is he still around.

At least mrpercentage has the spirit to stick around.

tyort1

  • Handlebar Stache
  • *****
  • Posts: 2261
  • Age: 47
  • Location: Denver, Colorado
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #506 on: August 11, 2016, 05:34:13 PM »
Why do people like cougar get all butthurt when they turn out to be wrong?  There's no shame in making a mistake - just own up to it, learn from it, and move on.

RedmondStash

  • Pencil Stache
  • ****
  • Posts: 819
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #507 on: August 12, 2016, 10:36:46 PM »
Why do people like cougar get all butthurt when they turn out to be wrong?  There's no shame in making a mistake - just own up to it, learn from it, and move on.

There's a difference between being wrong about something you don't care about and having an experience that challenges a core, fundamental worldview you hold. The latter is much harder to digest, so much so that people will go to great lengths to avoid it or deny it ever happened.

I can't speak for cougar -- I don't know him or her -- but people can get very invested in their beliefs, especially if they feel they've seen them work before. Any corroboration is taken as evidence that the belief is true, and any evidence to the contrary is seen as a fluke or aberration, or something to be explained away as insignificant or irrelevant.

It's just human nature.

mrpercentage

  • Handlebar Stache
  • *****
  • Posts: 1236
  • Location: PHX, AZ
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #508 on: August 12, 2016, 11:11:22 PM »
Eh.. I'm sticking to my guns. Here is the song for September https://youtu.be/ZarmRLa2p9Q

Retire-Canada

  • Walrus Stache
  • *******
  • Posts: 6724
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #509 on: August 13, 2016, 08:46:03 AM »

Joan-eh?

  • Bristles
  • ***
  • Posts: 300
  • Location: Toronto
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #510 on: August 13, 2016, 10:44:55 AM »
following, with interest

jjandjab

  • Stubble
  • **
  • Posts: 134
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #511 on: August 13, 2016, 11:22:43 AM »
Having read this most of the thread, I just feel a bit for the person that bought that option to short the S&P in March/April - not looking like a good decision... Needed to go down to 193, and is at 218. Should've bought the ETF instead, and had both the appreciation and dividends.

Being in my mid 40s, I have done all the trading in and out of single stocks (oh, the good'ol days of 2000 when I made like 40% on CMGI and RedHat in a matter of days... didn't end well, though), options, chasing moving averages, trading in oil ETFs, etc

A few years ago came to my senses and now just give me my index funds stocks/bonds/REITs with steady contributions and dividends and watch it go up. Timing is nowhere near as important as working hard and continuing to save and contribute without changing course. And never watching CNBC or reading and financial blog helps too - well if only for entertainment and not advice, anyway

mrpercentage

  • Handlebar Stache
  • *****
  • Posts: 1236
  • Location: PHX, AZ
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #512 on: August 13, 2016, 10:23:24 PM »
Having read this most of the thread, I just feel a bit for the person that bought that option to short the S&P in March/April - not looking like a good decision... Needed to go down to 193, and is at 218. Should've bought the ETF instead, and had both the appreciation and dividends.

Being in my mid 40s, I have done all the trading in and out of single stocks (oh, the good'ol days of 2000 when I made like 40% on CMGI and RedHat in a matter of days... didn't end well, though), options, chasing moving averages, trading in oil ETFs, etc

A few years ago came to my senses and now just give me my index funds stocks/bonds/REITs with steady contributions and dividends and watch it go up. Timing is nowhere near as important as working hard and continuing to save and contribute without changing course. And never watching CNBC or reading and financial blog helps too - well if only for entertainment and not advice, anyway

I agree with most of what you say. Time in market/saving rate/staying your course/ect. But why CNBC? I am kinda going against their grain. Quite a few of their contributors have rose glasses on right now. Tom Lee for example. Must admit that I like the guy. Fast money and Mad Money have been off since the start of the Olympics. Not sure why Im coming out for CNBC right now. I have been favoring the Bloomberg Radio App at work lately. Free listening and all.

I just think you all shouldn't be surprised when the shot-callers drag their butts back from the Olympics and wonder why the interns have been buying hand over fist. I expect profit taking to a significant degree but not crash.

mrpercentage

  • Handlebar Stache
  • *****
  • Posts: 1236
  • Location: PHX, AZ
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #513 on: August 13, 2016, 10:31:30 PM »
Eh.. I'm sticking to my guns. Here is the song for September https://youtu.be/ZarmRLa2p9Q

Here is mine: https://www.youtube.com/watch?v=5akEgsZSfhg
+1

I hope so. I just don't think so. In other news, my lump sum looks like it just went hot and ready to trade. Looking for that expected dip this next 60 days. There are plenty of reasons for one. Its not like Brexit/Sep interest rates/and by everyones account high end historical evaluations "multiple expansion" (pfft WTF is that) isn't real. Donald/Dilldory-- its going down man.

frugledoc

  • Pencil Stache
  • ****
  • Posts: 641
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #514 on: August 14, 2016, 02:32:18 AM »
Eh.. I'm sticking to my guns. Here is the song for September https://youtu.be/ZarmRLa2p9Q

Here is mine: https://www.youtube.com/watch?v=5akEgsZSfhg
+1

I hope so. I just don't think so. In other news, my lump sum looks like it just went hot and ready to trade. Looking for that expected dip this next 60 days. There are plenty of reasons for one. Its not like Brexit/Sep interest rates/and by everyones account high end historical evaluations "multiple expansion" (pfft WTF is that) isn't real. Donald/Dilldory-- its going down man.

Its climbing a wall of fear. + 15% by christmas.  (Don't really care just wanted to join in)

Retire-Canada

  • Walrus Stache
  • *******
  • Posts: 6724
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #515 on: August 14, 2016, 07:37:23 AM »
I hope so. I just don't think so. In other news, my lump sum looks like it just went hot and ready to trade. Looking for that expected dip this next 60 days.

So a dip between now and 14 Sept?

You were expecting a crash in May where the Dow low was like 17,435, but that wasn't enough to get you invested and we are now at 18,576.  You didn't invest your cash during the Brexit drop which got down to 17,140 so is it safe to assume you are waiting for a drop below 17,000 to make your "move"?

How low does the Dow have to go before you will fire your "dry powder"?

« Last Edit: August 14, 2016, 07:51:29 AM by Retire-Canada »

jjandjab

  • Stubble
  • **
  • Posts: 134
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #516 on: August 14, 2016, 10:30:07 AM »
I too hope it goes down - way down - that way my next few automatic contributions and company match into my 401k can get in at a nice price like back in 2008/2009. Oh, right and I won't even think about it at all because its automatic and I'm investing for 15-20 years from now when I will have reaped the gains and reinvested dividends by just staying the course and not having anything sitting on the sidelines earning 0.01% in a money market. I'll be having a beer by the pool rather rather reading financial blogs as I agonize over the market valuations and if/when/how/why the market does what it does.

One of my favorite articles about this

http://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/
« Last Edit: August 14, 2016, 10:33:51 AM by jjandjab »

Cycling Stache

  • Bristles
  • ***
  • Posts: 471
  • Age: 43
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #517 on: August 14, 2016, 01:00:37 PM »
I hope so. I just don't think so. In other news, my lump sum looks like it just went hot and ready to trade. Looking for that expected dip this next 60 days.

So a dip between now and 14 Sept?

You were expecting a crash in May where the Dow low was like 17,435, but that wasn't enough to get you invested and we are now at 18,576.  You didn't invest your cash during the Brexit drop which got down to 17,140 so is it safe to assume you are waiting for a drop below 17,000 to make your "move"?

How low does the Dow have to go before you will fire your "dry powder"?

+1

Mr. P, a lot of people have made a lot of money since you've been calling for downturns (while also talking up forever stocks that you turned out to have sold). 

I want to add another point as well.  It does not sound like you're investing a lot of money.  There's nothing wrong with that.  BUT let's say the market drops 10-20%.  What is your downside on this investment (or any that you make)?  A few grand?  $10K?  That sounds like a lot, but really it isn't for anyone looking at ultimate early retirement totals of several hundred thousand to over a million bucks.  I look back at my Vanguard holdings the last 10 years, and there's an option to see gains or losses per month.  I have several months that are well over $20k moves.  I sort of freak out at those moves now, but they turned out not to be a big deal.

I'll also tell you about the time that I too was sure that I knew where the market was going.  In January 2013, I planned to buy a house and wanted to make a significant down payment.  At that point, the S&P 500 was at 1,500.  My thought process was--it's up 150% in 4 years.  Say that again--150% increase in 4 years.  If that's not a bubble, what is?  And at the time the market seemed to be operating backwards in terms of going up whenever there was bad economic news (because people believed the fed would therefore keep the interest rates low).

So I thought I would be smart and time the market.  I sold $400,000 in stocks and turned it into a down payment.  Not a terrible idea.  It's not like I blew the money.

But that money would have made me another $150,000 in the market since.  And once I realized that, I stopped trying to second guess the market for good.

Mr. P, I doubt any of your investment decisions have cost you $150,000.  Consider the advice you get here, the pushback, and consider the possibility that you're not going to outsmart the market, and you don't need to.  Put it in, forget about it, and when you go to sell 20-30 years from now, you're not going to care that you may have been in a mini peak at the time.

Because the final lesson is this: that $400,000 I sold included $100,000 in capital gains from steady, consistent investing in the S&P 500 since about 2003--all achieved without stock picking or market timing.

Paul der Krake

  • Magnum Stache
  • ******
  • Posts: 4507
  • Age: 11
  • Location: USA
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #518 on: August 14, 2016, 01:17:56 PM »
So I thought I would be smart and time the market.  I sold $400,000 in stocks and turned it into a down payment.  Not a terrible idea.  It's not like I blew the money.
That's one heck of a down payment.

FINate

  • Handlebar Stache
  • *****
  • Posts: 1318
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #519 on: August 14, 2016, 04:52:15 PM »
Why do people like cougar get all butthurt when they turn out to be wrong?  There's no shame in making a mistake - just own up to it, learn from it, and move on.

Cognitive Dissonance is probably the best overall explanation: Dissonance is felt when people are confronted with information that is inconsistent with their beliefs. If the dissonance is not reduced by changing one's belief, the dissonance can result in restoring consonance through misperception, rejection or refutation of the information, seeking support from others who share the beliefs, and attempting to persuade others.

Perhaps related, our brains are not nearly as reliable or rational as we like to believe. We are prone to many types of memory biases, including things such as Confirmation Bias that lead us believe we are better at understanding the world around us than we really are. For all we know cougar et al. genuinely believe they are right!

capitalninja

  • Stubble
  • **
  • Posts: 102
  • Know what the other guy is making on the deal...
    • Entrepreneur, Investor, Life Advice
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #520 on: August 15, 2016, 07:19:59 AM »
A large part of the problem arrises from most people's innate desire to attribute order/patterns to everything. The markets have no discernible short-term pattern that can be reliably predicted. They're more Fractal/Brownian in nature than Gaussian.

If the next major market crash/correction could be reliably predicted by the masses (or Cougar) then the fact that it could be predicted would prevent it from happening. There is no formula, crystal ball, or genie that can reliably tell you what the market will do in the short term. Period.

There are countless ways to become wealthy in the stock market. The easiest/laziest path to making money investing (and keeping your stress levels lower) is simple. Consistently invest your money in a diversified set of low cost index funds and ignore what the talking/forum heads say. Do this long enough and you'll do well over the long term (any period > 10 - 12 years).

The "Why" as far as what the market is doing, simply does not matter. Knowing "Why?" gets you nothing other stroking your ego.
« Last Edit: August 15, 2016, 07:46:40 AM by capitalninja »

ender

  • Magnum Stache
  • ******
  • Posts: 4673
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #521 on: August 15, 2016, 07:22:23 AM »
A large part of the problem arrises from most people's innate desire to attribute order/patterns to everything. The markets have no discernible short-term pattern that can be reliably predicted. They're more Fractal/Brownian in nature than Gaussian.

If the next major market crash/correction could be reliably predicted by the masses then the fact that it could be predicted would prevent it from happening. There is no formula, crystal ball, or genie that can reliably tell you what the market will do in the short term. Period.

It's entirely possible that with enough data you could predict this.

But yes, practically speaking this is true.

FINate

  • Handlebar Stache
  • *****
  • Posts: 1318
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #522 on: August 15, 2016, 08:32:59 AM »
It's entirely possible that with enough data you could predict this.

But yes, practically speaking this is true.

If one person can do this, so can anyone else. Very soon enough people can predict future prices that all predictive value is lost because the market prices in this data before it is possible to profit from it.

Cycling Stache

  • Bristles
  • ***
  • Posts: 471
  • Age: 43
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #523 on: August 15, 2016, 09:54:16 AM »
It's entirely possible that with enough data you could predict this.

But yes, practically speaking this is true.

If one person can do this, so can anyone else. Very soon enough people can predict future prices that all predictive value is lost because the market prices in this data before it is possible to profit from it.

This actually isn't quite true.  Think of gambling.  What is priced in ahead of a game is the expectation of each team's chance of winning.  But then the game happens, and one side wins and the other loses.  While you can't make money consistently gambling because your ability to price odds over time is no better than the market's, you do in fact win or lose for a particular game.

The markets are similar.  What is priced into Apple's stock is some prediction of how successful they will continue to be with iPhones, whether they will invent the next disruptive device, etc.  They don't have a 100% chance of doing that, so what is priced in is the percentage chance that it will happen.  If it does, the price jumps, if not, it goes down.

A stock's price--and the market as a whole--actually represents a series of predictions of how likely certain things are to happen.  But all probabilities eventually go to zero or one, so the market moves when those actual events occur.  Thus, the reason stock prices move is because events occur, or the predicted likelihood of future events change.

The reason you don't make money trying to outsmart the market is because there's no reason to believe you have an information advantage (short of insider trading) or an analytical superiority that allows you to consistently value the odds better than the market as a whole. You in fact will win or lose with individual picks, but over the long-term as you get a sufficient data set, you won't consistently outperform the market.

FINate

  • Handlebar Stache
  • *****
  • Posts: 1318
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #524 on: August 15, 2016, 10:17:46 AM »
Thus, the reason stock prices move is because events occur, or the predicted likelihood of future events change.

Unless you mean "events" in the most general sense (including someone bought or sold shares) which would be tautological, I disagree. The market moves all the time without any new material information. And as soon as new information becomes available it's priced into the market - hence the old adage "buy the rumor, sell the news" though even that saying is funny because even the rumors are priced in before most people can profit.

The reason you don't make money trying to outsmart the market is because there's no reason to believe you have an information advantage (short of insider trading) or an analytical superiority that allows you to consistently value the odds better than the market as a whole. You in fact will win or lose with individual picks, but over the long-term as you get a sufficient data set, you won't consistently outperform the market.

In other words, if you have information that you think is predictive, so does everyone else (unless it is insider info, in which case it is illegal to trade upon). Even if you have some superior analytical superiority, other traders will eventually catch on and discover your strategy thereby eliminating its value. Also, what often appears initially as superior analytical ability often ends up being a statistical fluke. It's fascinating that Nobel prize winners and other extremely intelligent people have failed miserably to outsmart the market (https://en.wikipedia.org/wiki/Long-Term_Capital_Management as one example), yet average investors continue to believe they can do better.

I think we are in violent agreement that people are generally better off with a simple long-term buy and hold of broad indexes.   

mrpercentage

  • Handlebar Stache
  • *****
  • Posts: 1236
  • Location: PHX, AZ
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #525 on: August 15, 2016, 08:01:48 PM »
I hope so. I just don't think so. In other news, my lump sum looks like it just went hot and ready to trade. Looking for that expected dip this next 60 days.

So a dip between now and 14 Sept?

You were expecting a crash in May where the Dow low was like 17,435, but that wasn't enough to get you invested and we are now at 18,576.  You didn't invest your cash during the Brexit drop which got down to 17,140 so is it safe to assume you are waiting for a drop below 17,000 to make your "move"?

How low does the Dow have to go before you will fire your "dry powder"?

+1

Mr. P, a lot of people have made a lot of money since you've been calling for downturns (while also talking up forever stocks that you turned out to have sold). 

I want to add another point as well.  It does not sound like you're investing a lot of money.  There's nothing wrong with that.  BUT let's say the market drops 10-20%.  What is your downside on this investment (or any that you make)?  A few grand?  $10K?  That sounds like a lot, but really it isn't for anyone looking at ultimate early retirement totals of several hundred thousand to over a million bucks.  I look back at my Vanguard holdings the last 10 years, and there's an option to see gains or losses per month.  I have several months that are well over $20k moves.  I sort of freak out at those moves now, but they turned out not to be a big deal.

I'll also tell you about the time that I too was sure that I knew where the market was going.  In January 2013, I planned to buy a house and wanted to make a significant down payment.  At that point, the S&P 500 was at 1,500.  My thought process was--it's up 150% in 4 years.  Say that again--150% increase in 4 years.  If that's not a bubble, what is?  And at the time the market seemed to be operating backwards in terms of going up whenever there was bad economic news (because people believed the fed would therefore keep the interest rates low).

So I thought I would be smart and time the market.  I sold $400,000 in stocks and turned it into a down payment.  Not a terrible idea.  It's not like I blew the money.

But that money would have made me another $150,000 in the market since.  And once I realized that, I stopped trying to second guess the market for good.

Mr. P, I doubt any of your investment decisions have cost you $150,000.  Consider the advice you get here, the pushback, and consider the possibility that you're not going to outsmart the market, and you don't need to.  Put it in, forget about it, and when you go to sell 20-30 years from now, you're not going to care that you may have been in a mini peak at the time.

Because the final lesson is this: that $400,000 I sold included $100,000 in capital gains from steady, consistent investing in the S&P 500 since about 2003--all achieved without stock picking or market timing.

If I told you I have a 10" dick would you be impressed? It's always how much with you guys. You pulled out enough to pay off the house I have been trapped in for ten years twice over. Congratulations but your gains were never guaranteed. You didnt lose anything by pulling money out my favorite Monday morning quarterback.

And the lump sum is a full years pay. Look at your salary, consider a full year-- the same.

I have 10k in a taxable-- whoopty-do. It's al lot to me but it won't pay off my house. Technically it's not a retirement account so cashing out to buy a motorcycle wouldn't exactly be a crime. Raiding my retirement would be a crime. I'm lower middle class and have two kids. Part I was born in and part was choice. I don't gamble at all. I don't go out much if ever and I work hard (actually physical) and in poor conditions at times. I find your nonchalant carefree attitude to that amount of cash well within the borders of disgusting.

But I digress. I waste my time because I always receive the same answers here: That I am too stupid to do it myself. That my accomplishments are nothing. That I am a liar. That one day I will see. That I should go back into debt for more school because my 144 credits and 3.8 are not enough. That any purchase that is not a need but a want is wasteful, selfish, and should be in the market because I will live to be 80. Meanwhile my mother died at 63,  favorite Uncle 52, Great Uncle 53. My grandmother 62. My grandfather made it to 76. There isn't a damn thing guaranteed. Not life; not gains. Excuse me for wanting to be sure my sacrifice is actually worth it because I grew up with $400 CD players and now I could get a 62" TV for that but don't because I am doing what I can to better my families position.

So I  am done discussing what I do in the market, my concerns, or why.. There is nothing for me here that I have not already read countless times. Best of luck with FIRE for you.

On a lighter note, I did get to hold $534,000 in solid gold last week. I remember being disappointed that I could pick it up, that it was so small, and wondered how it was worth so much more than my house.

wienerdog

  • Bristles
  • ***
  • Posts: 459
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #526 on: August 15, 2016, 08:10:52 PM »
Houses are everywhere and can be built on demand.  Gold not so much.  So you are dumping your lump sum in gold?

http://www.numbersleuth.org/worlds-gold/


econberkeley

  • Stubble
  • **
  • Posts: 105
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #527 on: August 16, 2016, 08:44:42 AM »
The real annual return for s&p 500 will be close to zero for the next 12 years so I am in cash right now.

http://www.hussmanfunds.com/wmc/wmc160815.htm

frugledoc

  • Pencil Stache
  • ****
  • Posts: 641
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #528 on: August 16, 2016, 09:01:50 AM »
The real annual return for s&p 500 will be close to zero for the next 12 years so I am in cash right now.

http://www.hussmanfunds.com/wmc/wmc160815.htm

If you don't think stocks are going up obviously don't invest.  How anybody knows what is going to happen for the next 10 years is beyond me. 

I take it that Hussman are outperforming the market with their superior knowledge?

« Last Edit: August 16, 2016, 09:12:59 AM by frugledoc »

Rubic

  • Handlebar Stache
  • *****
  • Posts: 1058
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #529 on: August 16, 2016, 09:04:17 AM »
The real annual return for s&p 500 will be close to zero for the next 12 years so I am in cash right now.

http://www.hussmanfunds.com/wmc/wmc160815.htm

Hussmanís Returns, Like His Forecasts, Are Dismal: Analysis

http://www.thinkadvisor.com/2014/12/01/hussmans-returns-like-his-forecasts-are-dismal-ana

"...  even a portfolio of high quality short-term bonds outperformed the Hussman Strategic Growth fund over the past 14 years."


Kaspian

  • Handlebar Stache
  • *****
  • Posts: 1536
  • Location: Canada
    • My Necronomicon of Badassity
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #530 on: August 16, 2016, 10:01:50 AM »
The real annual return for s&p 500 will be close to zero for the next 12 years so I am in cash right now.

http://www.hussmanfunds.com/wmc/wmc160815.htm

Hussmanís Returns, Like His Forecasts, Are Dismal: Analysis

http://www.thinkadvisor.com/2014/12/01/hussmans-returns-like-his-forecasts-are-dismal-ana

"...  even a portfolio of high quality short-term bonds outperformed the Hussman Strategic Growth fund over the past 14 years."

^^ What in the actual fuck?  In 2014 he admits he was completely wrong and learned a "hard-won lesson".  In 2016 he's making and backing (basically) the exact same opinion that was wrong before.  ...I don't think he understands what the word  "lesson" means.  (It's supposed to involve learning from past mistakes, right?)  :(

Just wow, is all I can say--look at them returns!! 
« Last Edit: August 16, 2016, 10:06:24 AM by Kaspian »

thd7t

  • Handlebar Stache
  • *****
  • Posts: 1304
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #531 on: August 16, 2016, 10:04:57 AM »
The real annual return for s&p 500 will be close to zero for the next 12 years so I am in cash right now.

http://www.hussmanfunds.com/wmc/wmc160815.htm

Hussmanís Returns, Like His Forecasts, Are Dismal: Analysis

http://www.thinkadvisor.com/2014/12/01/hussmans-returns-like-his-forecasts-are-dismal-ana

"...  even a portfolio of high quality short-term bonds outperformed the Hussman Strategic Growth fund over the past 14 years."
It's probably a good idea to lower people's expectations if you are going to provide low returns.

waltworks

  • Magnum Stache
  • ******
  • Posts: 3218
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #532 on: August 16, 2016, 10:12:18 AM »
Wow, that's the flounce of the year!

Mr. P, in your position, picking stocks makes EVEN LESS SENSE. If you're playing with extra money at the end of the month for fun, go for it. If you've got $10k total in taxable? F'ing forget it.

-W

Cycling Stache

  • Bristles
  • ***
  • Posts: 471
  • Age: 43
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #533 on: August 16, 2016, 11:06:49 AM »
I find your nonchalant carefree attitude to that amount of cash well within the borders of disgusting.

Mr. P, this response is disappointing.  First, the numbers we're talking about are the numbers of early retirement.  This entire forum--the entire blog--is premised on the idea of building up investible assets to the point that one can retire based on that.  Those numbers are always in range of hundreds of thousands of dollars, if not more.

Second, people are trying to provide helpful advice.  It appears from an outside perspective that you're costing yourself money in an effort to prove yourself right with the occasional win on a stock pick or concern about losing 10-20% of an investment account whose eventual gains should dwarf that over the long term.  Statistical evidence supports this, and you've demonstrated your own inability to pick well based on your own predictions here.

Nobody is trying to tear you apart.  This isn't a personal attack.  People are trying to point out that there's nothing to demonstrate that you have the incredibly rare ability to outthink and out-analyze the market.  You suggest that means we're calling you stupid.  To the contrary, I consider myself an intelligent individual, but I index because I understand the limitations of what I can know versus the market and what the likelihood of consistently outperforming the market is. 

You latch on to the amounts as somehow an attack on you, when they were intended to show that concern about losses should not distract you from smart, rational investments in the market.  You have a lump sum equal to your salary?  I get it.  I just moved double my salary to international in the last month.  Was that a nonchalant, carefree approach to money?  No.  It was the exact opposite.  I researched the issue on the web, posted a thread here, got input, and after some particularly helpful data from users like Interest Compound, I realized that it made sense to move the money.  But it still caused me some grief.  Why?  Because the S&P 500 has dusted international over the last 10 years, and people like Buffett and Bogle are making comments about how it's really not necessary.  So, yeah, I think about risk with large amounts of money.  As does the majority here, because again, many are building their investment accounts into the hundreds of thousands of dollars aiming towards early retirement.  Your sum of money is large for you--but the point of this thread and the forum is to give people good investing advice that applies to any amount of money.

Finally, you claim that you have nothing to learn here, so what's the point.  Fine.  Nobody else's life is going to be materially better or worse (other than your family's, of course) based on what you do.  But here's the thing.  You post a lot in response to people asking for investment advice.  You trumpet your market forecasts, your stock picks, etc.  But if you're not interested in learning or advancing the discussion, don't do that.  Or at least understand why people are going to respond when you do so.  Because many of us believe that your investment approach is wrong, and it would be risky for others to follow.   That's not personal.  It's part of helping to ensure that this forum continues to be a collection of sound, well-reasoned financial advice for people interested in learning more.

steveo

  • Handlebar Stache
  • *****
  • Posts: 1944
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #534 on: August 16, 2016, 03:43:50 PM »
People are trying to point out that there's nothing to demonstrate that you have the incredibly rare ability to outthink and out-analyze the market.

My opinion is that no one has the ability to beat the market. It's not an intelligence thing. It's a predicting the future thing. No one does it well consistently.


RedmondStash

  • Pencil Stache
  • ****
  • Posts: 819
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #535 on: August 16, 2016, 05:33:48 PM »
The real annual return for s&p 500 will be close to zero for the next 12 years so I am in cash right now.

http://www.hussmanfunds.com/wmc/wmc160815.htm

Hussmanís Returns, Like His Forecasts, Are Dismal: Analysis

http://www.thinkadvisor.com/2014/12/01/hussmans-returns-like-his-forecasts-are-dismal-ana

"...  even a portfolio of high quality short-term bonds outperformed the Hussman Strategic Growth fund over the past 14 years."
It's probably a good idea to lower people's expectations if you are going to provide low returns.

LOL! Excellent point.

frugledoc

  • Pencil Stache
  • ****
  • Posts: 641
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #536 on: August 17, 2016, 01:01:29 AM »
The real annual return for s&p 500 will be close to zero for the next 12 years so I am in cash right now.

http://www.hussmanfunds.com/wmc/wmc160815.htm

Looks like you went to cash in March.  What is your plan to buy back in?  What will you do if equities rise another 5-10% from here and never drop lower?  I think your problem was that you have low risk tolerance and too many equities.  Maybe go for a 40:60 split?

Slurgi

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #537 on: August 17, 2016, 07:41:53 AM »
This thread was a fascinating read.

It would have been a horrible shame if Cougar, Keith123, etc. happened to be right about their predictions for 2016. It very well could have happened, after all. If they had been right I'm sure at least a handful of people would have been convinced that they really did know what they were doing, and that their valuations were on-point. Eventually, one of these financial prophets with their convincing charts and powerful ethos is going to time it right (i.e. get lucky) and make a bold prediction that turns out to be true.

There is a really good article by jlcollinsnh (which I'm not able to find at the moment...) that highlights a kind of scam that this reminds me of. It goes something like this: send 1024 letters saying sector X will go up and sector Y will go down, and another 1024 of the opposite. Then mail a similar batch with different predictions only to the 1024 recipients of the previous mailing that happened to be correct. After repeating this a few times, even the skeptical among us still receiving the mailings without knowledge of the big picture could be reasonably convinced they were really onto something. It's the same reason why many of the mutual funds available for purchase today by investment firms have good track records, some of them exceptionally so. Most of the losers were just discontinued.

fattest_foot

  • Pencil Stache
  • ****
  • Posts: 652
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #538 on: August 17, 2016, 08:18:50 AM »
^^ What in the actual fuck?  In 2014 he admits he was completely wrong and learned a "hard-won lesson".  In 2016 he's making and backing (basically) the exact same opinion that was wrong before.  ...I don't think he understands what the word  "lesson" means.  (It's supposed to involve learning from past mistakes, right?)  :(

Just wow, is all I can say--look at them returns!!

Nearly 8% negative in the last 5 years? I feel like I'd have to try really hard to have had returns that poor. How is that even possible? Any idea of what he's invested in?

Paul der Krake

  • Magnum Stache
  • ******
  • Posts: 4507
  • Age: 11
  • Location: USA
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #539 on: August 17, 2016, 08:39:26 AM »
It would be even more fun if there was a crash in the next 4 months before 2016 is over.

"Haha, see, we told you so!"
"Nah, you didn't really predict anything, just dumb luck. Besides, my dividends are still here."

*cut to commercial*


Filliteracy

  • 5 O'Clock Shadow
  • *
  • Posts: 50
    • My Journal to FIRE: Winter is coming (FIRE in Canada)
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #540 on: August 17, 2016, 11:57:52 AM »
Thank you for bumping this thread Cycling Stache! I love it when we can point out public examples like this to all the newbies in the forum.


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

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

I just checked this today.

I don't come to mmm very often anymore not because I am hiding but because I read thru many threads on all forums and have concluded that:
1. there is really nothing new for me here.
2. the mmm group is really not committed enough to an early retirement as a whole. if you guys were really committed, you'd be living more like Jacob at ERE.

but since it looks like I am being called out currently; i'll answer.

you guys can brutalize the facts as much as you want; the truth still stands and that is committing a lot of more here into equities and for the past several months is more likely to be lost than gained.

the charts up here were put up to make the posters argument look good; but it's not reality.

unless you started investing march 1st of 2016, you haven't gone much of anywhere. in the past year S+P market is up less than 2.5%.


and most likely would not be up 2.5% if it weren't for central banks liquidity as you can clearly see here:


And you might notice the chart says central bank liquidity is now the highest since 2013.





Now, I did not preach gloom and doom; I merely posted the facts out there and also the charts and thoughts of a local, Houston; professional money manager: https://realinvestmentadvice.com/. This guy only saw the 2008 recession coming in December of 2007 and had people getting out early in 2008 and did not advice people to get back in until March 2009; so yeah; I'm going to listen to what he says over anyone here and not sweat whatever I'm being called.

And now to answer your question:
How many additional years before you can retire, while you wait to get back the gains you've lost?

I will retire before most of you because I am not a market timer, I'm moving average investor; which got me out on December 2015 and back in during march. so while most everyone else here had their accounts decline nearly 10% during that time; mine did not. yeah, I missed a little upside this year but only had to endure about 2% of that correction that started in December(and no, I will not tell you the indicators I use, especially for free).

I'm not waiting to get back any gains, I just avoid most of the losses; and this is the key to investing in equities because over time the market is most of the time(like nearly 90%) gaining back loses and less than 10% making new highs which is clearly evidenced that even with this great rally from March this year; the S+P is not up 3% from a year ago.

All of you that were in the market from December 2015 to March this year are the ones just finally making money this year.

I am sure that I will be lambasted shortly, so be it. August and September are historically the worst months for the mkt and if my indicators say to get out again; i'll post it and when they say to get back in; you guys keep dollar cost averaging.
[/quote]

Starts a thread in February saying "OMG THE MARKET IS GOING TO CRASH EVERYBODY TAKE YOUR MONEY OUT". Then claims he put money in the market three weeks later (1st March). But he's not timing the market guys! Proceeds to make up pseudo-science BS reasons why every move and call he's made so far is part of an orchestrated rational plan (spoiler - it's not - he's just another fool speculating on market movements that cannot be predicted).

Cougar, what exactly is your point of saying " HAHA! if you had your money in the market for a year, you only would of made 2.5%!"?
Well Cougar, HAHA - If you held your money in for 5 years, you would of made 84.53%. 6 months? 12.89%. Do you want me to continue arbitrarily choosing time periods and giving a return that isn't low? I could go all day.   

waltworks

  • Magnum Stache
  • ******
  • Posts: 3218
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #541 on: August 17, 2016, 12:39:47 PM »
Yeah, no lambasting - but you notice how every thread has a market/moving average/momentum investor or two who's all excited? And then how a few years later you don't hear from them anymore but there's a couple new ones?

Funny how that works.

It's random, folks, for all practical purposes. But it mostly goes up. Invest accordingly.

-W

FINate

  • Handlebar Stache
  • *****
  • Posts: 1318
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #542 on: August 17, 2016, 03:49:17 PM »
It's random, folks, for all practical purposes. But it mostly goes up. Invest accordingly.

^^^This should really end the thread...but sadly I know it won't

RedmondStash

  • Pencil Stache
  • ****
  • Posts: 819
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #543 on: August 17, 2016, 08:15:55 PM »
unless you started investing march 1st of 2016, you haven't gone much of anywhere. in the past year S+P market is up less than 2.5%.

I'm not sure where you get your info from, but the S&P 500 has gone up 4.93% in the past year, as of today. Granted, the market was relatively flat through 2015 and the first part of this year, but I don't see your claim of 2.5% substantiated in the data.

http://finance.yahoo.com/chart/%5EGSPC#eyJtdWx0aUNvbG9yTGluZSI6ZmFsc2UsImJvbGxpbmdlclVwcGVyQ29sb3IiOiIjZTIwMDgxIiwiYm9sbGluZ2VyTG93ZXJDb2xvciI6IiM5NTUyZmYiLCJtZmlMaW5lQ29sb3IiOiIjNDVlM2ZmIiwibWFjZERpdmVyZ2VuY2VDb2xvciI6IiNmZjdiMTIiLCJtYWNkTWFjZENvbG9yIjoiIzc4N2Q4MiIsIm1hY2RTaWduYWxDb2xvciI6IiMwMDAwMDAiLCJyc2lMaW5lQ29sb3IiOiIjZmZiNzAwIiwic3RvY2hLTGluZUNvbG9yIjoiI2ZmYjcwMCIsInN0b2NoRExpbmVDb2xvciI6IiM0NWUzZmYiLCJyYW5nZSI6IjF5In0%3D

DavidAnnArbor

  • Handlebar Stache
  • *****
  • Posts: 1976
  • Age: 53
  • Location: Ann Arbor, Michigan
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #544 on: August 17, 2016, 09:10:59 PM »


All of you that were in the market from December 2015 to March this year are the ones just finally making money this year.


S&P 500 index is up almost 4% since Dec. 1st. 2015

dragoncar

  • Walrus Stache
  • *******
  • Posts: 8469
  • Registered member
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #545 on: August 18, 2016, 01:28:33 AM »
Apparently this is now just a general market analysis thread, so I'd like to get on Mr Bones wild ride

JoeBlow

  • 5 O'Clock Shadow
  • *
  • Posts: 55
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #546 on: April 28, 2017, 03:38:54 PM »
This thread has been entertaining to read.  The market is up about 25% not including dividends since it was posted.  Glad I don't try to time the market.

tyort1

  • Handlebar Stache
  • *****
  • Posts: 2261
  • Age: 47
  • Location: Denver, Colorado
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #547 on: April 28, 2017, 03:42:48 PM »
What ever happened to Cougar?  Seems like he should be here, gloating, no?  Or not?  Yeah, probably not.

sol

  • Walrus Stache
  • *******
  • Posts: 8453
  • Age: 42
  • Location: Pacific Northwest
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #548 on: April 28, 2017, 03:46:32 PM »
I expect this and every other red Dow thread to reactivate whenever the next market crash finally comes.

GuitarStv

  • Senior Mustachian
  • ********
  • Posts: 13314
  • Age: 38
  • Location: Toronto, Ontario, Canada
Re: Why I am reducing mkt exposure+have been since 2015.
« Reply #549 on: April 28, 2017, 06:00:12 PM »
What ever happened to Cougar?  Seems like he should be here, gloating, no?  Or not?  Yeah, probably not.

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