MFOHome About Commentary Discussions Funds The Best Resources Support Us!

Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Sign In Register

Categories

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

markets are always right...

a2z
in Other Investing

but i'll only expound on that after they go up.
ok, enough useless fd1k channeling, here is something insightful undisputed by history :

"...financial history is that market pricing almost never takes into account the possibility of huge, disruptive events, even when the strong possibility of such events should be obvious. The usual pattern, instead, is one of market complacency until the last possible moment. That is, markets act as if everything is normal until it’s blindingly obvious that it isn’t.."
p.krugman

and paraphrasing from b.elliot (ex-bridgewater cio) :
it is not uncommon for the market to lag a bad economy for ~9 months after it becomes undeniable, which is on top of the lag from bad decisions that wrecked the economy.

both these put plenty of weight on the investor 'beauty pageant' effect...which is what investors think other investors think despite probabilistic leading quant indicators.

Comments

  • Level5
    “How did you go bankrupt?"
    Two ways. Gradually, then suddenly.”

    ― Ernest Hemingway, The Sun Also Rises
  • CrashCrash
    Oh, boy. Is that stuff TRULY food for thought, eh?
  • hank
    edited September 1
    ”U.S. Stocks Are Now Pricier Than They Were in the Dot-Com Era”

    Above story is from today’s WSJ - ”The S&P 500 currently trades at 22.5 times its projected earnings over the next 12 months, compared with the average of 16.8 times since 2000.” Story adds that today’s figure is misleading because so much of the S&P’s weight is concentrated in just 7-8 stocks: “Not everything looks expensive … If every company in the S&P 500 were weighted equally … the index would be trading at 1.76 times sales, compared with its long term average of 1.43.”

    ”A Band of Retail Investors Powered the Meme-Stock Rally. Now They’re Flexing.”
    “Retail trades now account for 18% of stock-market volume, up from 10% in 2010 …”

    5 Largest Asset Bubbles in History

    Hemingway
  • larryB
    The markets are always right,, but the market reserves the right to change its mind overnight.
  • Observant1
    The Efficient Market Hypothesis (EMH) suggests that asset prices reflect all available information
    making it impossible to achieve higher returns via expert stock selection or market timing.
    I believe markets are generally efficient over longer time periods.
    However, EMH does not account for investor behavior nor does it explain bubbles and crashes.
    So, the markets are not always right...
  • Old_JoeOld_Joe
    When markets are mainly driven by people who don't really know all that much but see the market being driven by other people (who supposedly do know all that much) the whole thing just becomes a merry-go-round spinning faster and faster. Until it stops.
  • FD1000
    a2z said:


    but i'll only expound on that after they go up.
    ok, enough useless fd1k channeling, here is something insightful undisputed by history :

    "...financial history is that market pricing almost never takes into account the possibility of huge, disruptive events, even when the strong possibility of such events should be obvious. The usual pattern, instead, is one of market complacency until the last possible moment. That is, markets act as if everything is normal until it’s blindingly obvious that it isn’t.."
    p.krugman

    and paraphrasing from b.elliot (ex-bridgewater cio) :
    it is not uncommon for the market to lag a bad economy for ~9 months after it becomes undeniable, which is on top of the lag from bad decisions that wrecked the economy.

    both these put plenty of weight on the investor 'beauty pageant' effect...which is what investors think other investors think despite probabilistic leading quant indicators.

    I couldn’t find anything useful in the above comments. I actually have accomplished market timing.

    Below is my portfolio performance since retiring in 2018. I’ve kept about 95% in bond funds (not CEFs). My portfolio has consistently outperformed a 50/50 portfolio, a 60/40 allocation like VBIAX, and even a 100% stock mix when diversified with 60/40 SPY/VXUS.

    That said, beating stocks isn’t my main goal. My objective is to outperform 50/50 while limiting drawdowns to no more than 3% from any peak. In fact, I’ve never lost more than 1% from any top, while still beating most allocation funds. This was achieved through strong market timing. Just like the song (https://www.youtube.com/watch?v=7hx4gdlfamo)

    BTW, this performance is 99+% of all the money we have. This includes all brokers, banks, credit unions, and cash/mm.

    Portfolio performance since 1-1-2018: https://ibb.co/zT6QGzSs



  • Old_JoeOld_Joe
    edited September 1
    "I actually have accomplished market timing."

    Yeah, yeah... you and your Dearest Leader have accomplished everything,
    BIGGER AND BETTER THAN EVER BEFORE IN THE HISTORY OF THIS COUNTRY.
  • JD_co
    edited September 1
    Self-aggrandization (and lots of hot air) must run in the MAGAts DNA. Or they want to copy the orange dimwit himself.

    "I actually have accomplished......". LOL. We care not.
  • Observant1
    edited September 1
    "I actually have accomplished market timing.
    In fact, I’ve never lost more than 1% from any top, while still beating most allocation funds."

    This is a person who strokes his fragile ego by posting the same FAKE NEWS ad nauseum.
    Perhaps he thinks the seasoned investors on the forum will be impressed by this nonsense?
  • a2z

    why not just claim 95% in iau for 2 decades?
    no one believes that straight blue line...but at least it was drawn below the S&P500.
    kudos if rich enough not to care, but magic timing claims are zero value add.
  • larryB
    Hey. We are lucky to be in the company of the greatest investor of all time. He alone can time the market. Actually he advised Buffett and Giroux. He signed an NDA ,,,,, so he can’t mention it.
  • Old_JoeOld_Joe
    Come on you guys- he uses STRONG Market Timing, not that weak-ass crap that everyone else uses. Give the guy a break.
  • FD1000
    edited September 2
    OJ, not to worry, there have been many naysayers in the last 15 years.
    In this (link) you can find several trades I made in crucial markets.

    In fact, I posted my sale on 2/29/2020 on this site.
    https://www.mutualfundobserver.com/discuss/discussion/55299/bond-mutual-funds-analysis-act-2/p2

    LarryB, My trades were never perfect; I never claimed they were. When I'm wrong, I'm out of the market for up to a week. When I'm right, I was out for several weeks (in 2018, 2020, 2025) to 10 months in 2022. I can't do it with a lot of money, think above 10-20 million; after all, I trade in/out mutual funds. There were already times when the mutual company restricted me from trading their funds too often.

    I don't need to prove anything anymore. All the real discussions happen now off the boards.
    This is a screenshot in early 2020 (https://ibb.co/k2SKDPPg)
    This is a screenshot of 2022 (https://ibb.co/1tKzDR4j)
  • Mona
    Thank you, Mr. Hindsight.
  • hank
    edited September 2
    @Mona - Always love your one-liners. I remember when you told FD one time that he “should be managing money”. And another time you intentionally misspelled a member’s name so as to reflect one of low intelligence! Nicely done.
  • Old_JoeOld_Joe
    Believe me, worrying about BS, even thousands of BS, is the very last thing that I would do.
  • gman57
    Mona said:

    Thank you, Mr. Hindsight.

    LOL -- excellent
  • JD_co
    That's "Captain Hindsight" to us, Mona.

    If the markets go up, orange cries out "they love us". But I don't think we are going to have to hear that BS in the future.

    The next dance this market is going to do is called the Dive.
  • a2z

    there does seem to be an overwhelming lack of where major positioning should be for the week\month of the posts.
Sign In or Register to comment.