Down goes the Dow

Prof. Racket wrote:

Hardloper wrote:

"Momentum tricks" don't work.

Lots of hedge funds out there that trade only on momentum. Whether or not it ends up beating the market consistently is another thing

If they don't beat the market then I wouldn't say they worked... But if they do work, hedge funds trading with computers would beat you to it, so they still wouldn't "work" for a retail investor clicking around in Robin Hood

Hardloper wrote:

Prof. Racket wrote:

Lots of hedge funds out there that trade only on momentum. Whether or not it ends up beating the market consistently is another thing

If they don't beat the market then I wouldn't say they worked... But if they do work, hedge funds trading with computers would beat you to it, so they still wouldn't "work" for a retail investor clicking around in Robin Hood

momentum is one of the only ways you have a chance to beat the market. Which is why so many traders/AI/Hedgies use it as a strategy.

Check out page 15 of this. And compare to page 61.

Momentum is the highest performing 'factor' among all measured, and a momentum strategy has been the best strategy (on this chart) for dollars invested since 2007.

Stocks that go up tend to keep going up. The market gets things usually right. Piggybacking on the market's ability to pick winners is a good strategy.

agip wrote:

Hardloper wrote:

If they don't beat the market then I wouldn't say they worked... But if they do work, hedge funds trading with computers would beat you to it, so they still wouldn't "work" for a retail investor clicking around in Robin Hood

momentum is one of the only ways you have a chance to beat the market. Which is why so many traders/AI/Hedgies use it as a strategy.

Check out page 15 of this. And compare to page 61.

Momentum is the highest performing 'factor' among all measured, and a momentum strategy has been the best strategy (on this chart) for dollars invested since 2007.

Stocks that go up tend to keep going up. The market gets things usually right. Piggybacking on the market's ability to pick winners is a good strategy.

https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/guide-to-the-markets/

because momentum works, I've been looking for a way to buy into it.

VFMO purports to use momentum but I haven't looked into how it chooses stocks.

good tweet here:

Ben Carlson

@awealthofcs

I know it feels like the world could be coming to an end every time stocks fall but the S&P 500 has had the following corrections since 2009:

-16.0%

-19.4%

-13.3%

-10.2%

-19.8%

-33.9%

The market is up 740% since the Mar 2009 bottom even w/all of these corrections

It happens

Hardloper wrote:

Prof. Racket wrote:

Lots of hedge funds out there that trade only on momentum. Whether or not it ends up beating the market consistently is another thing

If they don't beat the market then I wouldn't say they worked... But if they do work, hedge funds trading with computers would beat you to it, so they still wouldn't "work" for a retail investor clicking around in Robin Hood

Nothing works for retail except for blind luck. That's why they're retail traders instead of hedge fund managers

Algorithmic and HF trading based on momentum can work if done correctly. Large swings in momentum and volatility can introduce certain deterministic outcomes and if you move quickly enough you can exploit that before the wondow closes

Prof. Racket wrote:

Hardloper wrote:

If they don't beat the market then I wouldn't say they worked... But if they do work, hedge funds trading with computers would beat you to it, so they still wouldn't "work" for a retail investor clicking around in Robin Hood

Nothing works for retail except for blind luck. That's why they're retail traders instead of hedge fund managers

Algorithmic and HF trading based on momentum can work if done correctly. Large swings in momentum and volatility can introduce certain deterministic outcomes and if you move quickly enough you can exploit that before the wondow closes

A retail investor has distinct advantages over fund managers and one is to be able to trade on momentum much more effectively. A retail investor can make numerous momentum trades all day long, with as much or as little of their holdings as they wish, though if a fund were to do so, the sheer size of their holdings would influence the stock direction and thereby undercut the very thing they were attempting to do.

Let's call it like what it is: momentum trades in a retail IRA (i.e.: tax deferred) account with industry standard no-fee trading is a tool one would be hard not to appreciate and even use when the occasion to do so arises.

And that is not something afforded to fund managers, which to my mind, puts retail investors at a distinct advantage to which they would be well advised to take advantage of.

If that doesn't suit one's trading strategy, don't use it. But if it does, recognize it for what it is.

Ghost of Igloi wrote:

Crypto is just another indicator of a massive bubble.

How so?

“Cryptocurrencies leave me increasingly feeling like the boy watching the naked emperor passing in procession. So many significant people and institutions are admiring his incredible coat, which is so technically complicated and superior that normal people simply can’t comprehend it and must take it on trust. I would not. In such situations I have learned to prefer avoidance to trust.”

Jeremy Grantham, Let the Wild Rumpus Begin

Ok, so Grantham’s too stupid to understand crypto,

Not surprising.

Just listened to an interview sent to me, with a guy named Jim Rickards, who just wrote a book. What an absolute moran.

Everyone is hawking their wares—in these cases, books. Grantham’s: another one I won’t be reading.

At this point, I think a lot of guys are just too old. Common sense is one thing, but adaptability is equally valuable—and they just don’t have it.

How so?

I will now also be renting out some properties that we have been using, in the spirit of cash flow and income.

Dude manages $500 million, his wife yells at him for bringing peanuts into the house (kid allergic) and he goes ballistic and ruins his name and career and is fired and arrested.

I’d bet $20 that if the Dow were 2000 points higher he’d have kept his temper. In tough markets Some of us have an extra shot of bourbon or go run, others assault teenagers.

https://www.nbcnewyork.com/news/local/crime-and-courts/connecticut-man-arrested-after-racist-tirade-over-smoothie-cops-say/3509837/

Maser wrote:I will now also be renting out some properties that we have been using, in the spirit of cash flow and income.

Hot tip. Consider socking away some hard currency.

Racket better watch himself.

agip wrote:

Dude manages $500 million, his wife yells at him for bringing peanuts into the house (kid allergic) and he goes ballistic and ruins his name and career and is fired and arrested.

I’d bet $20 that if the Dow were 2000 points higher he’d have kept his temper. In tough markets Some of us have an extra shot of bourbon or go run, others assault teenagers.

https://www.nbcnewyork.com/news/local/crime-and-courts/connecticut-man-arrested-after-racist-tirade-over-smoothie-cops-say/3509837/

First thing I thought when reading your description was, boy, sounds like he would be right at home on LRC. After reading it, I pretty much figured he was already here, or at least, the other side will be resurrecting him as some kind of misunderstood every-man.

Like my recent timing of the aggregate markets, his having been early last year was his having been wrong, and he (and I) missed out on a 25+% rise.

Regardless of what happens this year, missing that 25% is a huge, huge deal. At least I had my tsla and btc, what did Grantham have?

Bush league. He reminds me of Schiff, who is gloating that his holdings are trouncing US tech and the s&p so far in 2022. Of course he has missed out on the most epic rise ever.

Adaptability. Position yourself for a quick exit, pick your spots, and watch very closely—don’t just pack up your army men and go home to sulk.

You know, just because you enjoy huge gains doesn’t mean you have to sustain huge losses. Yes I get the asymmetry of 10% up vs down—but had he been in all of last year and sold now, he would be comfortably up.

His malaise sounds familiar...

doc idiot wrote:

Maser wrote:I will now also be renting out some properties that we have been using, in the spirit of cash flow and income.

Hot tip. Consider socking away some hard currency.

Thanks, but what does that have to do with cash flowing some RE?

Maser wrote:Thanks, but what does that have to do with cash flowing some RE?

Nothing at all. General free advice.

Sorry, you don’t know what you are talking about.