Down goes the Dow

Down 0.07% so far today.

Randy Oldman wrote:

Down 0.07% so far today.

Now it's UP 0.09%!!! WOO HOO!!!

"Over time markets ALWAYS go up"

You make it sound like timeframes are essentially infinite, or that you have the luxury of picking your timeframe.

You are, of course, incorrect; for proof, all one needs to do is pick the appropriate time frame.

Like I said, I have only been "out" 3 times, and the other 2 times once worked out OK, and one worked out very well, both much better than the markets did, all things taken into account.

Your belief is that my strategy will come back to bite me in the ass at some point, and it very well might--but it hasn't, yet. Historical fact is on my side--not statistical generalization, mind you, but fact specific to my personal history. Even this time--I could get back in today, and have killed the markets from Jan 1-Aug 1 2014.

A year is very important to me, after all there is no telling how many one will have. There is nothing wrong with being responsive, as long as you know what you are doing, and as long as you are diligent.

You sound like somebody who has no realistic other options--i.e., the everyman. If you did, and you understood them well, you would avail yourself of them. I use the term "realistic" liberally--i.e. that which is practically realistic, in the sense that you may indeed have other options but you cannot practically exercise them because you have chosen to apply your time to something else, and hence they are not "realistic" options to pursue.

Or, you may genuinely have no other viable options.

You cannot argue successfully with me on this point. Every time I have been out of the markets, I have beaten them, handily. It is also true that MOST of the time, I have been in the markets. No, the game is not yet over--but it could end any day, for each of us. All that is actual fact is that which has already happened, all the rest is pure conjecture. I have had, and continue to have, other options, of which I know the limits and in which I have expertise. I know when to exercise those options. Consider it something like stocks vs bonds--I know under what conditions I will switch, and which way, and how much. Even now, I am still in the markets, in a very minor way compared to what I used to be.

So please stop repeating your everyman advice. Fine, everybody gets it, it is no different than what many others say, and it is not complex. Nobody wants anymore to find 20- or 30-yr periods in the DJIA, or look to the Nikkei, to begin to argue with you--that point is long past. You have said what you have to say, and it seems that is ALL you have to say.

If repeating your mantra makes you feel better, go for it. If it is your business to propagate this mentality, go for it.

But don't expect any more responses.

You make it sound like timeframes are essentially infinite

Indeed they are, my good fellow.

well I'm right on, with a full 90 minutes in the bank. now 91.

Maserati,

You are still not right about all of that.

I have clearly said time and time again that you need to be "diversified". If you are JUST in the Nikkei then that isn't diversified now is it?

I stand by my statement that over time markets go up. You have to be diversified to make that a sure thing on a SHORTER time frame, but ultimately, everything goes up. 73% of calendar years are UP, and UP outweighs DOWN.

If you are so good at beating the markets when you are out, then you should just stay out. I remain skeptical. Often people don't consider all things when then believe they have beaten the market (exactly when they got out and when they got back in, loss of investment dollars between the two, dividends, any fees they had to pay, etc.). If you sell at Dow 10,000 and then you are out for 10 years while the market goes up and then back down 10 years later to 9,000, would you consider that beating the market? Many would. But, that's 10 years lost of investing, reinvested dividends, and SHARES that are really to SWELL when the market goes north again...and it WILL. Anyone who did that lost a LOT. Now, CAN you take money out for 10 years and invest in a company or start a business or buy real estate that does well? Sure. Riskier to do any of that though, but some people do that. USUALLY what happens when people take their money out of the stock market, they sit it in a non-interest bearing account or SPEND it...they do NOT typically go invest it somewhere else.

It is ridiculous the number of people since 2009 (non-expert news folks, late night comedians who get a LAUGH at this indicating the audience agrees) who are convinced the stock market was a horrible place to be. Since March of 2009, the stock market has been THE place to be and it has done better than any other like period since I started investing in 1989. It has been so good that I may decide to retire 5 years earlier than I have been planning (55 instead of 60). You call my information "everyman", trying to belittle the advice, but it clearly is not "everyman" because fewer and fewer people take that advice, and those under 35 are staying away from the stock market in droves (and they shouldn't). You say "everyone gets it", but they don't. People need to hear the advice, brother, and jumping in and out of the stock market, regardless of what you say you have been able to accomplish by doing that, is a proven lose strategy compared to consistently buying. To be clear, this is buying and holding FUNDS and adding more FUNDS. This is NOT a buy and hold of individual stocks. Owning individual stocks should only be done if you still are putting in 15% or more into FUNDS and you are completely debt free including a paid for house and you buy no fewer than 5 and they are all spread out into different sectors. IF a company tanks, you can certainly sell that stock. I'm NOT for buy and hold with individual stocks. I don't call what I do "buy and hold" anyway. It is buy and buy and buy some more and then buy more. It is add funds when you can to increase diversification.

agip wrote:

[quote]Media whores wrote:

"..usually when the market sells off, small caps go down more than large caps. They are more volatile that way.

Anecdotally, I've noticed that when there is a fear based sell off - like today about Putin - and small caps don't sell off much - then the broad market selling is probably over"

Any data to support this?

well there are two parts:

1) do small caps go down more than the market as a whole? Yes, there are data to prove that. The beta of the russell 2000 is 1.3. The R2K is an index that follows small cap stocks. A beta of 1.3 means that if the market as a whole goes down 1%, on average the russell 2000 (and by extension small caps as a group) go down 1.3%.

You do realize that is not a clear and simple answer to a straight forward question? And that if you need to resort to gibberish you don't have an answer?

In fact, you are not even supporting your original assertion, that in a large panic sell off small caps dip more rapidly than large caps. You are instead claiming that on average small caps are more volatile than large ones -- a completely different proposition.

K5, why are you using an alias. We all know it us you.

K5 detector wrote:

K5, why are you using an alias. We all know it us you.

yes, clearly it is k5 because he/she is probably the only guy or girl who can't figure out the nesting quote function.

But to address his or her points:

the points are are muddled. Here is my hypothesis:

When there is a decent sized sell off in the SP 500 or other big cap indices, and small caps do not sell off nearly as much , that seems to indicate that most of the selling is done.'

the logic there is that traders will dump supervolatile small caps when they are afraid. But if they in fact aren't selling the supervolatile small caps even as the market falls, then that probably means big institutional/hedge fund money is not fleeing the market - usually a bullish sign.

So we can go back to k5's questioning of whether in fact small caps fall more than big caps in a down day situation.

This would take some stat work that I am not prepared or able to do, but I spot checked three big down days recently and it was true in all three. Small sample, sure. I'm not claiming science here, but I would tend to think that small caps do indeed fall more than big caps in a big down day:

7/31/14: SP500 -2.0%

7/31/14: R2K: -2.3%

6/20/13 SP500 -2.5%

6/20/13 R2K -2.6%

11/7/12 SP500 -2.4%

11/7/12 R2K -2.6%

the best argument against my hypothesis would be to look at the markets after these big down days and see if the downtrend continued. It's pretty likely that after ANY big down day the market is likely to rise. Forget the small cap/big cap distinction.

"So we can go back to k5's questioning of whether in fact small caps fall more than big caps in a down day situation.

This would take some stat work that I am not prepared or able to do".

Stat work that you are not prepared to do...yet you claimed just yesterday "1) do small caps go down more than the market as a whole? Yes, there are data to prove that"

So you had data to prove it yesterday, but today it is gone?

The rest of your post is pure unsubstantiated assertions and gibberish, of course.

"When there is a decent sized sell off in the SP 500 or other big cap indices, and small caps do not sell off nearly as much , that seems to indicate that most of the selling is done.'" = unsubstantiated assertion

"I would tend to think that small caps do indeed fall more than big caps in a big down day" = backing off on your claim of basing your view on data.

"the best argument against my hypothesis would be to look at the markets after these big down days and see if the downtrend continued" Isn't this what you are supposed to do before you make a claim and say it is based on data?

The level of muddled thinking and out and out dishonesty displayed by agip and these other financial geniuses is truly troubling

I'm not going to respond. But I feel your pain.

Flag, I have to say that I stopped reading at this point: "If you are so good at beating the markets when you are out, then you should just stay out."

If you admit that you regret having typed this hyperbolic nonsense, I will continue reading.

Are you this polarized and polarizing in everything you do in life? A polarity and polarizing influence that I recognize, and reject entirely, of course.

It's not the 1950's anymore. Stop nurturing nostalgia, and stop drawing emotional nourishment from the myths of yesterday.

[quote]agip wrote:

I'm not going to respond.

Gee. I wonder why?

You got to remember Flag is the guy who thinks he makes money if he buys with the Dow at 17,000 and it then drops to 13,000.

You're not dealing with Sir Isaac Newton here.

And you're the guy that thinks pulling out at the beginning of a bull market is a good idea. Flagpole runs rings around you in the investment knowledge circle.

Maserati wrote:

Flag, I have to say that I stopped reading at this point: "If you are so good at beating the markets when you are out, then you should just stay out."

If you admit that you regret having typed this hyperbolic nonsense, I will continue reading.

Are you this polarized and polarizing in everything you do in life? A polarity and polarizing influence that I recognize, and reject entirely, of course.

It's not the 1950's anymore. Stop nurturing nostalgia, and stop drawing emotional nourishment from the myths of yesterday.

Makes no difference to me if you read what I write. I'll simply tell you when you are wrong, and you can read it or not.

I have no idea what you mean with your 1950s reference. I wasn't around in the 50s, and as far as investing goes, I didn't start until 1989. My investing philosophy has nothing to do with nostalgia or anything other than it's a safe, effective way to take money you don't need today and turn it into decent income in retirement. I don't invest based on emotions or nostalgia. You do not understand me at all, so perhaps you SHOULD read more of what I write, but again, I could not care less if you do or not.

If I can paraphrase:

Flagpole: Simple, time-tested investment strategies work now, have worked in the past and will most likely continue to work in the future.

Maserati: You don't know that they will continue to work. And there are many ways to invest, not just yours.

agip wrote:

If I can paraphrase:

Flagpole: Simple, time-tested investment strategies work now, have worked in the past and will most likely continue to work in the future.

Maserati: You don't know that they will continue to work. And there are many ways to invest, not just yours.

This is not a fair 'paraphrasement'. You should know better.

DJ has dropped about 4.5% in last 3 weeks. Is that normal with-in the normal fluctuation range?