Down goes the Dow

Very Nice wrote:

What, everybody quiet? Where are the mouthpieces--agip, maserati, fagpole, gente, etc?

The chickens might be coming home to roost. Dow around 17.4k now.

well we're down 4% from our all time highs - hard to get either excited or bery pessimistic.

I don't much like this market, but I see both sides to it. As we all should.

What's keeping the market going is the constant, unending fear embedded int the market. The VIX is very high after just a few percent drop...the quick money has already sold and has put hedges in place. So there aren't so many people left to sell.

As has been pointed out, generally serious bear markets need a big shock to happen - a terror attack, a bubble expiring, that sort of thing. So if we just sort of bumble along here, we're unlikely to go down much more than a regular 8-12% correction.

Dow is down 1.73% YTD. Meh. As I'm usually neither excited nor depressed about any market really, I'll continue that trend here. Two weeks ago experts were saying 2015 will be a great year. Today the word is that 2015 and 2016 might not be that great. Either way is ok with me. I've got 12 more years to work more than likely, so it's either going to give me good gains in 2015 or an opportunity to acquire lots of shares that will bear fruit later on.

keep an eye on emerging markets here - they are up 6.3% over 12 months, far, far better than the negative 5 from EAFE and catching up to the +11% of the US.

emerging markets have lagged for several years - I suspect that in the year 2020 many people will do a forehead slap and wonder why they didn't buy back in 2012-2015.

another big day for emerging markets - they are now up 11.6% in 5 weeks.

there is little that I would like more than a big emerging market stock rally - then we can make some money as the US is too expensive and europe is kerplunk.

Have any of you ever read of the "2 minute portfolio" discussed by Rob Carrick in the Globe and Mail (Toronto/national paper in Canada). It's based on choosing the two biggest cap dividend-paying stocks from each of 10 sub-indices of the Toronto Stock Exchange. Historically (over more than 20 years) it has tended to out-perform the TSX. Last year it had a banner year, making 24% compared with the TSX 10.5%. So far this year it's again on pace to outperform. I re-jigged my "2MP" portfolio on 5 January this year and as of yesterday it was up 3.5% (over 16 days which means nothing admittedly) compared with 1.2% for the TSX.

random canuck wrote:

Have any of you ever read of the "2 minute portfolio" discussed by Rob Carrick in the Globe and Mail (Toronto/national paper in Canada). It's based on choosing the two biggest cap dividend-paying stocks from each of 10 sub-indices of the Toronto Stock Exchange. Historically (over more than 20 years) it has tended to out-perform the TSX. Last year it had a banner year, making 24% compared with the TSX 10.5%. So far this year it's again on pace to outperform. I re-jigged my "2MP" portfolio on 5 January this year and as of yesterday it was up 3.5% (over 16 days which means nothing admittedly) compared with 1.2% for the TSX.

I haven't read it, but it sounds like the 'dogs of the dow' strategy, which buys the 10 highest dividend yielding stocks in the DJIA. I believe it has done well over time, with some savage bad times. the idea is that a high dividend indicates a stock is temporarily down in the dumps and will rebound. So it is a value strategy, which is always a good idea.

the hard part about those kinds of strategies is figuring out what to do when they temporarily fail - when they underperform massively for 5 years. Most poeple give up at that point - just before they rage back and make tons of money. I've done that.

But huah and booyah mates - what a rally. The US is almost even for the year. And small caps are up more than big caps today, so that sounds good.

Here it's not the size of the dividend that determines selection, it's market capitalization, for dividend-paying stocks. So the biggest companies make the cut. And there is methodical diversification across the (Canadian) market by picking biggest 2 out of each sub-index, rather than just the 20 biggest (which would be much less diverse; you would hold all the banks, for starters...). Of course it only exposes you to one market (Canadian) which will be risky at times.

I think people have looked at the same strategy for the US markets and found it hasn't performed as well. Not sure why it works so well in the Canadian market, no doubt something to do with the mix of stocks in the TSX. But for at least 20 years, it has worked...

You can google "2 minute portfolio, Rob Carrick, Globe and Mail" if you want to read a better explanation.

oh ok in my greedy fervor from a raging market I didn't read your post carefully. I'll check it out.

greedy I am - the SP500 is now up for the year - and up 3.6% in 3 trading days.

once again, the vix strategy worked perfectly - when the vix gets to around 22 you back up the truck.

someday the vix will go to 40 tho...

agip wrote:

greedy I am - the SP500 is now up for the year - and up 3.6% in 3 trading days. .

Thank you ECB!

Randy Oldman wrote:

agip wrote:

greedy I am - the SP500 is now up for the year - and up 3.6% in 3 trading days. .

Thank you ECB!

Maserati was right, about pretty much everything.

He was right half the time. And wrong the other half.

History prof wrote:

Maserati was right, about pretty much everything.

Thanks, Mas!

Your welcome.

-141.38 after a gain almost double that the day before.

17,672.60

this trading range sort of market is looking more and more persistent.

nothing great going on, but probably positive that us small caps and european big caps are doing better than US big caps - money is still looking at risky assets.

but clearly a day like today hurts

agip wrote:

oh ok in my greedy fervor from a raging market I didn't read your post carefully. I'll check it out.

greedy I am - the SP500 is now up for the year - and up 3.6% in 3 trading days.

once again, the vix strategy worked perfectly - when the vix gets to around 22 you back up the truck.

someday the vix will go to 40 tho...

I thought the vix strategy was 24... Or was it 30? I am short and plan to remain so. God help me.

Very interesting outlook. Correct in my opinion too.

Major exporters getting hammered by the strength of the US$

Sagarin wrote:

agip wrote:

oh ok in my greedy fervor from a raging market I didn't read your post carefully. I'll check it out.

greedy I am - the SP500 is now up for the year - and up 3.6% in 3 trading days.

once again, the vix strategy worked perfectly - when the vix gets to around 22 you back up the truck.

someday the vix will go to 40 tho...

I thought the vix strategy was 24... Or was it 30? I am short and plan to remain so. God help me.

Very interesting outlook. Correct in my opinion too.

http://www.hoisingtonmgt.com/pdf/HIM2014Q4NP.pdf

re; teh VIX - well lately the 20-22 range is the 'gentlemen to your marks' indicator.

I'll take a look at the hoisington - always worth a read. They're just about the only ones who have been right on how interest rates keep falling.

good luck with the shorts - gutsy move

agip wrote:

this trading range sort of market is looking more and more persistent.

nothing great going on, but probably positive that us small caps and european big caps are doing better than US big caps - money is still looking at risky assets.

but clearly a day like today hurts

More and more persistent? You mean like Maserati said?

And exactly who does a day like this hurt? Give me a break. Flagpole is ravenously buying, even as we speak.