Down goes the Dow

asdfasfd wrote:

Lets steer away from the K5 bashing and talk about what is going to happen in the future. Things going to change in a few months? I think K5 might have been better off by adding a few months to his prediction...

I am making no predictions.

I am only taking the prudent step of getting out of an equities market that I suspect has a very good chance of tumbling quite a ways down in the not too distant future.

Unlike the resident geniuses Flagpole and Agip, I don't just buy and hold and if the market value of my holdings were to plummet, I would consider it a loss.

[quote]agip wrote:

[quote]asdfasfd wrote:

Lets steer away from the K5 bashing and talk about what is I'll be in stocks until they fall below the 200 or 300 day moving averages, then I'll sell.

My God Agip. Are you trying to "time the market"? I thought that was not possible and that only fools did so.

What a hypocrite!

K5 wrote:

[quote]agip wrote:

[quote]asdfasfd wrote:

Lets steer away from the K5 bashing and talk about what is I'll be in stocks until they fall below the 200 or 300 day moving averages, then I'll sell.

My God Agip. Are you trying to "time the market"? I thought that was not possible and that only fools did so.

What a hypocrite!

I've written before about using moving average violations as sell signals. The different between you and me is that you go on gut feel and I use a system. A system will win in the long run. It certainly would have avoided 2000-2 and 2008-9 and got you back in low. But I wasn't using it then.

I do make adjustments on the margin, sure. But only on the margin - for ex if emerging markets have been 5% of portfolios this year, maybe they will be 12% next year. We're not talking huge 180s like you make.

agip wrote:

I've written before about using moving average violations as sell signals. The different between you and me is that you go on gut feel and I use a system. A system will win in the long run. It certainly would have avoided 2000-2 and 2008-9 and got you back in low. But I wasn't using it then.

I do make adjustments on the margin, sure. But only on the margin - for ex if emerging markets have been 5% of portfolios this year, maybe they will be 12% next year. We're not talking huge 180s like you make.

Mathematically speaking, taking the 180s is the only way that makes sense. If you are right more often than not (whether by 'hunch' or by 'system') then doing 180s will bring you out well ahead of the baby moves that you advocate. And if you are not right more often than not then you are better off making no adjustments at all.

The only need that is met with the baby steps approach is an emotional one, not a financial or rational one.

several issues here:

1) the moving average violation system is pretty violent - not a baby step. If an index falls below the moving average, you sell. You are out. that's a 180.

2) changing the portfolio on the margin is a baby step, yes. But keep in mind I am trying to capture the upswing of the market, not make money above and beyond the market. I am selling beta, not alpha, if you know the terms.

I do feel I need to make an extra percent or two over a benchmark tho to justify my fees, and these baby steps are how I do that. Frankly, it has worked well by simply changing the relative weights of europe and the US and between bonds and stocks. I got that right three times, adding a percent or so to portfolios. That's all I'm trying to do. I get too much wrong to make massive changes like putting 50% in emerging markets just because I THINK they will do wrong. if I get a baby step wrong, I only cost the client 80 bps or so. Not a big deal.

in other words, the baby step approach keeps me generally aligned with the upswing of the markets over time, tied to a bechmark but trying to beat it by a percent. How is that not rational given markets tend to rise over time?

making 180s is great when you get them right...but like we are seeing with k5, when you get it wrong, it is pretty bad.

but maybe I don't understand what you are saying.

typo:

I get too much wrong to make massive changes like putting 50% in emerging markets just because I THINK they will do well.

asdf3434 wrote:

Im not K5. Agip, who are your clients? and do you seriously think the world economy is doing well?

The economy expanded much faster than first thought in the third quarter, as the government on Thursday revised its estimate of growth in the period to a 3.6 percent annual rate from 2.8 percent.

That was significantly better than the 3.1 percent pace economists had been expecting, and it marked the best quarter for growth since the first quarter of 2012, when output jumped by 3.7 percent. It also marked the first time since then that growth had exceeded 3 percent.

K5 wrote:

Unlike the resident geniuses Flagpole and Agip...if the market value of my holdings were to plummet, I would consider it a loss.

That's what makes you a bad investor and why you should not do it.

Bigfoot Investments wrote:

Dear Sir:

If you would kindly refrain from stealing my handle when posting that would be much appreciated. Your 'Bigfoot Investors', while also obnoxious, at least was relatively easy to spot as being from an imposter.

Please surprise me by having the decency and integrity to post under your own handle.

Thank you for your consideration.

- The real Bigfoot Investments

Ok

[quote]agip wrote:

I've written before about using moving average violations as sell signals. The different between you and me is that you go on gut feel and I use a system. A system will win in the long run. It certainly would have avoided 2000-2 and 2008-9 and got you back in low. But I wasn't using it then.

Wow. Just wow.

When you do it you call it "using moving average violations as sell signals". And you have a system and so its genius.

When I do it you call it guessing and label it stupid -- ignoring the fact that it worked quite well for me in 200-2002 and 2008-09.

What a complete buffoon you are. Amazing that you can stand yourself.

Flagpole wrote:

K5 wrote:

Unlike the resident geniuses Flagpole and Agip...if the market value of my holdings were to plummet, I would consider it a loss.

That's what makes you a bad investor and why you should not do it.

Thanks Flaggy for your confirmation that you actually believe you do not lose money when the market you are in tanks. And that a 1 in 4 chance of winning $1 million for a $50 bet is not worth taking. What a bright guy you are

If anyone's actually interested in going long (and you know how to read a technical shart--RSI and CCI are contrary indicators), you may have an opportunity in about 5 market sessions:

http://www.barchart.com/chart.php?sym=%24SPX&style=technical&template=&p=DO&d=M&sd=&ed=&size=M&log=0&t=BAR&v=0&g=1&evnt=1&late=1&o1=&o2=&o3=&sh=100&indicators=SMACD%2812%2C26%2C9%2C16737792%2C10053375%2C13421721%29%3BRSI%2814%2C0%2C100%2C10079487%2C10040064%29%3BCCI%2820%2C6710886%2C100%2C26367%2C16724736%29&chartindicator_1_code=SMACD&chartindicator_1_param_0=12&chartindicator_1_param_1=26&chartindicator_1_param_2=9&chartindicator_1_param_3=16737792&chartindicator_1_param_4=10053375&chartindicator_1_param_5=13421721&chartindicator_2_code=RSI&chartindicator_2_param_0=14&chartindicator_2_param_1=0&chartindicator_2_param_2=100&chartindicator_2_param_3=10079487&chartindicator_2_param_4=10040064&chartindicator_3_code=CCI&chartindicator_3_param_0=20&chartindicator_3_param_1=6710886&chartindicator_3_param_2=100&chartindicator_3_param_3=26367&chartindicator_3_param_4=16724736&addindicator=&submitted=1&fpage=&txtDate=#jump

Or to use an old Wall Street Saying: "The bears have Thanksgiving and the bulls have Christmas" and it appears to be correct again this year.

I think Agip is engaging in behavior commonly referred to as CYA.

He will attack you for leaving the market but wants to set up a scenario where he can claim he did the same just before any crash that may come. But his move will be scientific based on some unexplained system that only he and other experts follow while belittling your successful instincts as base.

Boshman wrote:

I think Agip is engaging in behavior commonly referred to as CYA.

He will attack you for leaving the market but wants to set up a scenario where he can claim he did the same just before any crash that may come. But his move will be scientific based on some unexplained system that only he and other experts follow while belittling your successful instincts as base.

...he explained his system quite clearly.

pages 20-28

the system I use is totally simple and transparent and rules based.

you own stocks when they are above their 200 day or 10 month simple moving average and you don't own stocks when they are below the 200 day or 10 month simple moving average.

could not be more simple or understandable.

from the paper:

"To demonstrate the logic and characteristics of the timing system, we test the S&P 500 back to 1901. Total return series is provided by Global Financial Data and results pre-1971 are constructed by GFD. Data from 1901-1971 uses the Standard and Poor's Composite Price Index and dividend yields supplied by the Cowles Commission and from S&P.

Figure 7 presents the annualized returns for the S&P 500 and the timing method for the past 100+ years.

A cursory glance at the results reveals that the timing solution improved compounded returns while reducing risk, all while being invested in the market"

;range=my;compare=;indicator=sma(200)+volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

there's a chart if you want to see how the system dodges the problems.

it's not perfect - it has a lot of false alarms, which hurt returns. But it does save from the big potholes.

"..you own stocks when they are above their 200 day or 10 month simple moving average and you don't own stocks when they are below the 200 day or 10 month simple moving average".

Why would that work?

Boshman wrote:

"..you own stocks when they are above their 200 day or 10 month simple moving average and you don't own stocks when they are below the 200 day or 10 month simple moving average".

Why would that work?

check out that yahoo chart I posted.

basically, it tells you to sell when stocks fall a significant amount. then tells you to buy after they have started rising a significant amount.

but it keeps you invested at times like this, which seem scary but might not be.

Seems like an overly complicated version of my system; when the market is volatile and trending downward, get the Hell out.