Down goes the Dow

Are you an investor or a speculator? Most of the speculators here, or otherwise will be canon fodder for Mr. Market.

It reminds me of World War I. The Generals (Wall Street) send the soldiers ( retail investors) to certain slaugther into the machine guns of the opposing side ( Mr. Market). For every transaction there has to be a buyer or seller, there are always two sides to the trade. At some point, the buyers disappear, and low and behold, guess what? True price discovery arrives. To paraphrase the father of value investing Benjamin Graham " in the short run the market is a voting mechanism, in the long run it is a weighing mechanism." You are speculating that the market moves higher, while the investments you speculate in, at these prices, will deliver an adequate return ten years from now. Good luck...you need it!

Uh, you're talking to yourself.

Yep. And I am listening too....

Ghost, very quickly: I don't differentiate "speculation" from "investment", it is a smooth matrix, a spatial continuum. Believe it or not, trading like this is conservative on the continuum that I know.

Also, never make the 2 mistakes of believing that everyone knows the same things that you know or that you know the same things that everyone else knows; and that everyone else is more or less like you are.

I have been at this a very long time, and am very flexible. These simple trades in the current froth are just a phase, and is still only a part of what I do, the rest of which I will never post here.

All I'm posting here is what I am doing with respect to these simple things, and when. I will not post why and how it fits in with other things I may or may not be doing. Again, everybody is different. The only reason I make these brief posts is to illustrate that there are a great many different flavors of "trading", "speculating", and "investing", and that their central common feature is that they all "time the market" over some time period. Shorter time frames are not inherently more risky, but historically, the shorter the time frame, the more work required to make it work--work for which most people have neither the time, tools, or raw material in sufficient quantity.

I also have longer-term "investment" accounts, and, yes, cash bank accounts, along with RE and inflation-protected assets. I would never rely on any one thing in particular, especially not picking small tops off a temporarily frothy market.

OK, if you are good at short term trading, best wishes. Allocating capital to an investment that generates a stream of income is entirely different than what you are doing in your "short term investments." You are merely speculating you can buy something and sell it at a higher price. I do this for a living and see what you are doing as a losers game. At some point like the Ponzi scheme someone is left holding the bag. That is not good for you or the one holding the bag.

I'm not good at short term trading, although I have done well when I do it. I realize that a bunch of it is luck, which is why I only do it when, and to the extent, that it can work a bit. That's why I don't make any big killings. But 1% here and there adds up over the year, or at least it has over the past 2 years when I have handily beat the market with this account. Before that, the account was in longer-term stuff, and I, like everyone else, enjoyed 30% annual returns, and it was all long-term cap gains.

For the past 2 years, this account has been 20 and 18% before tax, which has now been at a higher level. Even with the tax bite, I have done well, but have had to switch strategies not infrequently. It's a ratchet.

Witness the drops this morning. I sold almost first thing at 137.36, when it was already coming down. I missed the top, but sold higher than I bought it at 136.21. Paltry, yes, but better than nothing.

Overall, I agree that it is a loser's game, which is why I wrote that I will likely be abandoning this strategy soon. The only winners are those who collect the fees. I neither enjoy, nor excel at, doing this, but it has worked well, while I look at other longer-term, less intensive, opportunities. At the moment I am considering using this account for productive farmland and/or certain art acquisition, unless the US markets return to a level where a big buy-and-hold would make sense.

Neither the farmland nor the art is particularly liquid, so it's a difficult decision whether to move forward with that, or stick to what I've been doing.

Any bag I will be left holding will be a minority of my portfolio, so I'm not worried about it.

Yellen is muttering about high valuations...no kidding. More froth results. Various people saying that they would welcome a correction, just to get the markets back on track.

At current levels, a 15% correction would take the dow to around 15.2k

I will say that I hope it happens. When I look at that number and consider the gains of the past 5 years, I don't know that I would make a huge long-term buy, but it would depend on many things, of course.

is it just me or is chemical reagent sounding like Maserati lately?

all that talk about other mysterious investments that shall not be named.

Well CR seems to have had a hot hand lately - bravo to him.

From my point of view this week has been very bad - I hate it when bonds and stocks fall together - I depend on bonds to cushion portfolios. But bonds are falling almost as fast as stocks right now. Crapola.

Hot hand? Are you kidding?

All I thought was that there would be a spike on open, and that I would sell positive, which I did. I wasn't up much, and I didn't even hit the peak (which was, however, very short-lived). I saw the peak, and got out as soon as I could after it started going down.

If I had thought about it more--which I didn't--I would have seen today's drop. I have been busier with RE lately though, and spent yesterday and the day before looking at buildable lots, neither of which I will be buying.

I have had an OK hand--a hot hand would have shorted today.

Here's something, I'm considering buying again today, before the end of the day, will let you know. As for "mysterious other investments", I spelled it out concisely, with blanks only in inflation-protected, where I have hinted that I trade in some art. Nothing mysterious about it, "Maserati" comments notwithstanding.

What happens in the hour until close will be interesting.

Chemical Reagent wrote:

What happens in the hour until close will be interesting.

one thing I've noticed that is fairly reliable is that when small caps don't sell off as much as big caps, you are likely to see large caps climb soon.

And that is the case now, to some degree, although not as much as oftentimes.

Large caps -82 bps

small caps - 34 bps

that's not enough of a gap for me to love this indicator today, but it is a somewhat bullish fact.

Yes I am tempted. I'm thinking it will rise by close, or by Friday. Haven't bought yet...

Just bought at 134.30

Chemical Reagent wrote:

Just bought at 134.30

dayum!

meh. i won't post much anymore, i will be too busy. will post this sell.

spreads can kill on this stuff.

after hours trading looks good.

Chemical Reagent wrote:

Just bought at 134.30

Why are you trading DDM and not SSO !!!?

God I hope Bernie Sanders is elected president. He will cut out all the corporate welfare and get the real economy moving again.