Quoting: "But you can’t plan on a stock market crash every single time stocks fall. Sometimes stocks go down without an enormous crash. Were it not for the occasional correction or bear market, stocks wouldn’t offer a risk premium over bonds and cash.
Plan on seeing stocks fall plenty of times over your lifetime, including the occasional crash."
It's been difficult lately, to take the long-term view. But that's my frame of reference. I've got the world covered, leaving out Latin America, deliberately..... I hate to see the numbers, the last several days. Maybe I should just go fishing and start to think again in terms of YEARS. "I love it when a plan comes together." ---George Peppard.
Fishing results: https://scontent-a-ord.xx.fbcdn.net/hphotos-xap1/v/t1.0-9/s720x720/10628570_10202606813880871_8137407407218187508_n.jpg?oh=8eaad4dbfee36c6483e3f21ffb6c55be&oe=54AE224A

@Derf.
Through last Friday. So, last one now actually a couple % lower.

@MJG.
Great paper.
Thank you!

Paging Charles: Would you have the average draw down for those 12 times SP500 went -5.1 % or more ?
Thank you.
Derf

@MJG, thanks for an interesting read even if I find myself depressed. I'll admit I dream every day of beating the S&P 500 with my collection of investments and convincing myself that even if I don't I would hate to go through life without trying.
One thing I find interesting is that so many people, including lots of people who spend their lives studying the past, are great at telling us that past performance is no guarantee of future results while we're also told that buying index funds and never selling is your best bet (at least if you use history as a guide!).
What I wonder is why no one says that choosing an index fund might be your best option as long as you can choose the right index, or even the right collection of indexes. After all, if you had chosen some combination of the S&P 500, MSCI EAFE and Barclays Agg Indexes at the turn of the century you'd be kicking yourself for not having an Emerging Markets index or a small cap index.
No matter what you do you're making some sort of bet on the future. If an index fund helps you trade less, keeps your expenses low and lets you sleep at night, more power to you. Just don't think that its the proverbial pot of gold at the end of the rainbow.

@Tampabay I think investing is slightly different: sooner or later, at any single point in time, there is a humbled ass for every available seat. And, in a long-leg-down market, it is a very willing ass, grateful to even have a seat to take; on the floor around will be the litter of those who attempt to catch the falling knives, to which Junkster alludes.
Keep your cool, Fundsters; ya can't trade the market ya wish for, ya has to trade the market ya has. Being all pensive will mess with our A game. The week is young... and the bell has just rung. Away we go! (or, "away" we go?)
10/14/2014
00:56:22
10-yr T: 2.24% ;)

Actually, since the last market "trough" on 3/6/2009, which is the start of the current bull market, the SP500 has drawn down at least -5.1% twelve times. Or about twice a year. The worst being -18.6% on 10/3/2011.

Okay approximating using daily, weekly for monthly I don't like. And I do want free site doing "monthly". Harrrrummmpphhhhhh !!!!
Meanwhile discussing funds that went up today. PRLAX 3.57%. WTF !?!?!

Yahoo does a nice 200 day SMA, which is close enough to the 10 mo SMA...

In Yahoo Finance, click on Basic Tech Analysis tab...
http://finance.yahoo.com/q/ta?s=DODGX&t=1y&l=on&z=l&q=l&p=m200&a=&c=
I use Schwab, through my 401. So, I get access to institutional shares, like WBMIX, at much lower minimums than direct with Whitebox.
Schwab has a 10 mo SMA chart opinion.
And, I tend to plot my own in Excel, downloading data via Yahoo Finance, for example.
I'm sure there are others, but off-hand, can't name them.
And, I'm being summoned to dinner!
Hope all is well.
c

Hi Guys,
I couldn’t agree more. Whether its gambling, stock speculation, or long-term investing, its always a necessary policy to know the odds and the likely payoff matrix.
That’s an easy assignment when tossing a pair of fair dice. All that is needed is to count the number of combinations that produce a desired outcome. The probability of throwing a “7” is exactly 6 out of 36 possible outcomes, or 16.667 %, with complete certainty.
Complete certainty is never possible given the complex interactions, the vicissitudes of unknowable events, and the emotional responses to the markets from both professional and amateur investors. Since calculation of precise odds are an impossibility, defaulting to an examination of historical records offer an appealing compromise. These data are especially practical when estimating the likelihood of severe market meltdowns to gauge portfolio risk and recovery times.
I’ve identified two references that provide this requisite frequency data. The data comes from two respected sources and considers two long periods to allow timeframe comparisons.
The first data set covers 50 years and was generated by the Ned Davis organization. It records the DJIA returns. Here is the Link:
http://www.americansuperior.com/bear.htm
The second data set covers a far more extended timeframe, and is an American funds product. It too shows DJIA past market declines dating from 1900 to 2013. Here is the Link:
https://www.americanfunds.com/resources/basics/risk-and-volatility/living-with-a-market-decline.html
Both references provide useful market downturn frequency tables that are subdivided by decline magnitudes. Please visit these resources. Both include some limited discussion of lessons learned and offer guidelines on how to soften the blows.
Good luck and good investing decisions to everyone. Being familiar with the hard statistical market meltdown data will improve your likelihood for good decision-making.
Best Regards.

WBMIX, of course.
FAAFX, likely due to this...

And, even SIGIX, a nice surprise.
Not bad given the continued hemorrhage.
And even a couple stocks...HCP (again) and SCHN (since it's been down so long, can't go down anymore... =) ).
I noticed too that DODIX is doing pretty well lately. If DODGX stays below 10 mo SMA by month's end, time to rotate back. First time will need to rotate out since started this strategy for this part of my portfolio, circa 2012 I think.
Bummer.

Wanted to always ask you. Why do you always quote Institutional shares, i.e. WBMIX and SIGIX?

WBMIX, of course.
FAAFX, likely due to this...

And, even SIGIX, a nice surprise.
Not bad given the continued hemorrhage.
And even a couple stocks...HCP (again) and SCHN (since it's been down so long, can't go down anymore... =) ).
I noticed too that DODIX is doing pretty well lately. If DODGX stays below 10 mo SMA by month's end, time to rotate back. First time will need to rotate out since started this strategy for this part of my portfolio, circa 2012 I think.
Bummer.

I listened to the whole thing. Sounds like a nice guy. But, like many stock market 'talkers' he leaves a lot to the listeners interpretation and leaves himself 'outs'.
Basically, he said the stock market valuation is high, not as high as 2000, and could go higher.
Let's put him in the same class as Art Cashin.

I also listened to the whole thing. Yes, very nice guy, won the Nobel Prize in Economics in 2013 along with 2 others.
He says the current CAPE is 26, with a historical average of 15. But it was 45 in the year 2000. The current CAPE still suggests positive returns, but not nearly as high as expectations. CAPE in Europe is significantly lower, and much lower still in the PIGS or PIIGS countries and China. He said his theory would be to invest there, in the low CAPE countries, but he hesitated and said he wanted to think about that....Too bad the interview was so short and didn't cover bonds, except for the briefest mention of them. Would like to know Robert Shiller's thoughts on the bond market.

Dex, I am praying I have to pay that $250 at 2%. But at 1% I don't believe either of us will be happy (with you know what) I mean 1% could mean some serious economic problems worse than 2008 and you saw what you know what did in 2008.

Recently I was thinking on how I will spend that $500 when the US 10 year gets to 1%.

I found this interesting.
"Since 1928, markets have averaged about three 5 percent corrections each calendar year"
Were most MFOers aware of this? (I wasn't)

" "Fairholme's 13.2% annualized return has outperformed 99% of peers over 10 years. " (FAIRX's performance over the past five years since is at the 98th percentile.) "
The question for us Fairholme investors is, were the last 5 years mean reversion and Berkowitz has no particular talent, or were the first ten years the "mean" for him, and we'll soon revert back to that?
As far am I'm concerned, if the answer is the former, I may give up on active management except for very low-cost, group managed funds such as Vanguard's non-index offerings.

FYI: Fixed income gurus, financial media talking heads and asset managers have been forecasting rising interest rates for at least two years. They were (and still are) wrong.
Even as recently as one week ago, bond prices took a hit on news of a jobs report that showed a pickup in hiring last month, but prices picked back up this week after Fed minutes revealed that some participants wanted to err on the side of patience to keep supporting the world’s largest economy for longer than expected.
This type of mixed news and uncertainty is likely to continue as the fear of a weaker economy outweighs the fear of inflation. But even if rates start rising in 2015, as is currently expected, it doesn’t mean panic and mass exodus from bonds.
Needless to say, investors in bond funds have been challenged to do a good job of managing the fixed income portion of their portfolios. With that in mind, here are 3 bond funds to buy now for uncertain economic and market conditions.
Regards,
Ted
http://investorplace.com/2014/10/3-bond-funds-unpredictable-market/print

@Sven If you want to get in on the fun, Fidelity offers EVBAX load waived, with a $2,500 minimum. Hard to beat that

@Tampabay: I've never been a believer in the so called 'eating your own cooking' theory. I could care less if a fund manager has any money in the fund he/she manages. The proof in the pudding is what kind of returns do they get. There is no evidence that funds who's managers invest in them perform any better.
Regards,
Ted

Businessweek, Jan 14, 2010: "According to a July 2009 study by fund tracker Morningstar (MORN), managers with more than a $1 million stake in their own funds beat 58% of peers, on average, over the past five years. Funds with no manager investment beat 46% of peers."
Whether this is credible evidence is debatable, but there is evidence.
Now the next sentence in this article from almost five years ago reads: "Fairholme's 13.2% annualized return has outperformed 99% of peers over 10 years. " (FAIRX's performance over the past five years since is at the 98th percentile.)