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Re: Why do Engineers Think They’ll Be Good at Picking Stocks

That's true but I still think there's a tendency among some indexers to exaggerate how much of an advantage they have against *do it yourself* stock pickers. I think if a stock picker has at least 50 well diversified positions he could achieve similar results, but for 0.17% fees someone else will d...
by Clearly_Irrational
Thu Oct 23, 2014 3:00 pm
 
Forum: Investing - Theory, News & General
Topic: Why do Engineers Think They’ll Be Good at Picking Stocks?
Replies: 117
Views: 7154

Re: Is investing in real estate worth it?

I got a chuckle out of this. Indeed, real estate is great at throwing off reliable cash flow. Unfortunately, that cash flow is not always positive! Ever heard of NEGATIVE cash flow? Yeah, nobody goes into the real estate business looking forward to that, but it's real; and it happens all the time! ...
by Clearly_Irrational
Thu Oct 23, 2014 11:26 am
 
Forum: Personal Finance (Not Investing)
Topic: Is investing in real estate worth it?
Replies: 28
Views: 2415

Re: Is investing in real estate worth it?

But, real estate does add an entirely different type of asset and income stream to the mix. That's one of the main reasons I like it, I consider it a form of meta-diversification. Oh and real estate is fantastic at throwing off reliable cash flows, much better than a financial portfolio in that res...
by Clearly_Irrational
Wed Oct 22, 2014 6:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is investing in real estate worth it?
Replies: 28
Views: 2415

Re: Is investing in real estate worth it?

1.) It depends, unless you are in a hot market or are planning to live in one side of a duplex it is probably not going to return more than a three fund portfolio. Any additional gain that you might have would come from a. added leverage (risk) b. your labor (improvements, landlording) c. or an unu...
by Clearly_Irrational
Wed Oct 22, 2014 6:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is investing in real estate worth it?
Replies: 28
Views: 2415

Re: Is investing in real estate worth it?

I advise against speculating (buy and selling) real estate. I happen to like rentals though.
by Clearly_Irrational
Wed Oct 22, 2014 2:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is investing in real estate worth it?
Replies: 28
Views: 2415

Re: Why do Engineers Think They’ll Be Good at Picking Stocks

We could have a whole conversation about the difference between Scientists, Engineers and Technicians and who belongs in which category. For the purpose of this discussion though I'll use the somewhat popular but inaccurate version that basically says if you're highly educated and work in a technica...
by Clearly_Irrational
Wed Oct 22, 2014 1:02 pm
 
Forum: Investing - Theory, News & General
Topic: Why do Engineers Think They’ll Be Good at Picking Stocks?
Replies: 117
Views: 7154

Re: Headed for a 300+ point loss today?

HomerJ wrote:You didn't predict the big drop for us, so what good is your "technical" analysis?


You're right of course, predicting the change in price with 95% accuracy for the time period of the prediction was a total failure.
by Clearly_Irrational
Thu Oct 16, 2014 5:25 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

The big drop is likely mostly over for the moment. (you can tell by the decreasing length of the candle tails combined with a change in slope for most of the indicators and reduced volume) A consolidation pattern is definitely looking probable. Until we see more of the pattern, there isn't much pred...
by Clearly_Irrational
Thu Oct 16, 2014 4:46 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: How will we know if value-tilting has stopped working?

Steadfast wrote:Before tilting ask yourself: why is the total market index not good enough for me?


Insufficient risk density leaves less than adequate room for abating left tail risk.
by Clearly_Irrational
Thu Oct 16, 2014 4:32 pm
 
Forum: Investing - Theory, News & General
Topic: How will we know if value-tilting has stopped working?
Replies: 44
Views: 3056

Re: Monty Carlo Simulation

Several of Gummy's spreadsheets have monte carlo simulators built in. I'd be surprised if you couldn't find one that is close and modify it to do what you want.
by Clearly_Irrational
Thu Oct 16, 2014 4:30 pm
 
Forum: Investing - Theory, News & General
Topic: Monte Carlo Simulation
Replies: 9
Views: 788

Re: Headed for a 300+ point loss today?

Clearly_Irrational - Do you think it's safe to say there's some firm resistance at the 15900/16000 dow mark? So far I've seen some hesitation for the market to dip below that mark. (Please note this is not for market timing purposes. I am a fan of finance and this intrigues me.) I mostly use the S&...
by Clearly_Irrational
Thu Oct 16, 2014 11:20 am
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

That line on that chart would be completely different if the starting date was a bit earlier or a bit later... In other words, the "Bearish Price Objective 1840 (met)" is completely made up. Sorry Irrational, but it doesn't predict anything. Oh I agree, except the line isn't related to th...
by Clearly_Irrational
Thu Oct 16, 2014 11:17 am
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

littlebird wrote:Can you post a chart that includes tomorrow, please?


Heh, wouldn't that be nice?
by Clearly_Irrational
Wed Oct 15, 2014 7:44 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

Based on his writing above, I have no idea what he is saying, so no way to take his advice even if I were so inclined. Generally a good policy. In case you actually care here's an explanation: This is a point and figure chart for the S&P 500: http://i.imgur.com/XvvWrQn.png?1 In this case the ma...
by Clearly_Irrational
Wed Oct 15, 2014 6:18 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

Even though I think most of the phrases are hilarious, I do enjoy reading these. Provides me with lots of words to google and learn something new. Heh, you should see some of the stuff I read about but threw out. Elliot Wave Analysis is the one that looks the most useful, has lots of neat jargon bu...
by Clearly_Irrational
Wed Oct 15, 2014 2:33 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

May be you could tell me if a particular day around 11/10/2014 would be best to time my 3rd DCA installment :) Sorry, this particular method doesn't see that far into the future. Remind me when we get closer and I'll see what I can do. Seriously though, if you're making regular contributions just p...
by Clearly_Irrational
Wed Oct 15, 2014 2:25 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

Can you back test your rules of thumb and see what % of time you were right? It must be an interesting exercise! My accuracy varies heavily with the clarity of the signals. In general with good signals I usually managed 60%-80% accuracy back when I was actively trading. With lousy or conflicting si...
by Clearly_Irrational
Wed Oct 15, 2014 2:23 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

I learned what a swirlogram looks like :sharebeer Swirlograms are neat! I learned about them from Zerohedge, some guy from Goldman Sachs was using them in one of the articles. I didn't have access to his data, but I found an alternate series that did something similar and I like the visualization.
by Clearly_Irrational
Wed Oct 15, 2014 2:18 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

So Clearly_Irrational, i asked you last week if i should hold off till this week or do my DCA as planned. You suggested i stay course but thought Wednesday (today) is a better buying opportunity. Did you prediction come true? (BTW I stuck to my schedule and empowered to do it again in the future) I...
by Clearly_Irrational
Wed Oct 15, 2014 2:16 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

You can goof on him, but taking his advice a week ago would have saved you a ton of money. would you please elaborate why you say that? what exact scenario would have been affected? At the time, the question was "I'm going to add some new money, should I do it today or wait a bit". The sh...
by Clearly_Irrational
Wed Oct 15, 2014 1:58 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

dolphinsaremammals wrote:Try posting that in English.


Executive Summary: Nothing to see here, move along.
by Clearly_Irrational
Wed Oct 15, 2014 1:36 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

VA_Gent wrote:Why does everyone believe down 75-90% is impossible?


It's not impossible, given the current situation though it seems improbable.
by Clearly_Irrational
Wed Oct 15, 2014 1:12 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

Talk about a short retracement, just one day. Still, it was obvious more decline was coming. At this point we've completed the P&F pattern, dropped an amount equivalent to the trading range and appear to be at the support level. With RSI oversold, MACD divergence high, Chaikin Money flow extreme...
by Clearly_Irrational
Wed Oct 15, 2014 1:09 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

Toons wrote:From a Warren Buffet Interview


Of course when Warren talks about buying companies he means something slightly different than the rest of us.
by Clearly_Irrational
Wed Oct 15, 2014 11:56 am
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Ebola preparation

But the thing is- it has not spread all that much even in Africa. Despite the problems with health care, etc. I don't want to minimize the suffering already caused by this disease. But at least so far, it has not spread aggressively. One of the main reasons it hasn't spread far in the past was that...
by Clearly_Irrational
Tue Oct 14, 2014 3:52 pm
 
Forum: Personal Consumer Issues
Topic: Ebola preparation
Replies: 55
Views: 2239

Re: Relatively new here. What did you do in 2008/09

I was short on the way down. I still got nervous when they were talking about a money market collapse. I was just a few days away from yanking all my cash out of the bank ahead of the anticipated bank run / holiday when they announced they were going to backstop the money market funds and bailout th...
by Clearly_Irrational
Tue Oct 14, 2014 3:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: Relatively new here. What did you do in 2008/09
Replies: 106
Views: 6886

Re: Ebola preparation

Quickfoot wrote:you can responsibly prepare without becoming obsessed


I agree but it's a big task and well outside the scope of this forum. For example, a semi-remote home location and building a network of trusted neighbors are key items. Neither of those things are something you can do at the last minute.
by Clearly_Irrational
Tue Oct 14, 2014 2:56 pm
 
Forum: Personal Consumer Issues
Topic: Ebola preparation
Replies: 55
Views: 2239

Re: Ebola preparation

Well there are three different scenarios: 1) Ebola, like SARS, is being blown out of proportion. The government will act and get things under control and in a year or two you'll laugh about ever being worried about it. 2) The reaction to Ebola is too slow and it will spread to the developed world. M...
by Clearly_Irrational
Tue Oct 14, 2014 2:32 pm
 
Forum: Personal Consumer Issues
Topic: Ebola preparation
Replies: 55
Views: 2239

Re: U.S. stocks in freefall

dgdevil wrote:So 1860 looks to be toast on current momentum?


That's not what I was saying.

dgdevil wrote:Do you see some range-trading in that area before it drops to the next support level?


I expect a short retracement before further declines.
by Clearly_Irrational
Tue Oct 14, 2014 11:55 am
 
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 941
Views: 157051

Re: Headed for a 300+ point loss today?

I said Friday that a higher probability buy point was going to be had if you waited 1-3 days. It looks like that is happening and that tomorrow (2 days) is going to be more likely than Wednesday. The current candle pattern is called three black crows (despite being red candles, go figure), medium te...
by Clearly_Irrational
Mon Oct 13, 2014 4:49 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Gold: Is now the time?

Gold is mostly a hedge/insurance/store of value asset so be aware of what you're buying. Generally the best time to own gold is when real returns are less than zero. Here's a chart with the real rate data up through August (the most recent data): http://i.imgur.com/s35AIce.png?1 Whether or not you s...
by Clearly_Irrational
Mon Oct 13, 2014 3:28 pm
 
Forum: Investing - Theory, News & General
Topic: Gold: Is now the time?
Replies: 36
Views: 2300

Re: Headed for a 300+ point loss today?

does it say anywhere im trying to guess where the bottom is?im simply looking to buy on a discount,whether its a 10% discount or 15% discount or 30% discount,and keep accumulating as the discount gets deeper.basically im seeking to accumulate aggressively in a bear market and be conservative in a h...
by Clearly_Irrational
Sun Oct 12, 2014 6:29 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

Holding all or most of your wealth in CDs is never, under ANY circumstance, the right thing to do. Never. That's an overly broad statement. While I'm not a huge fan of CDs in the current interest rate environment if you had a small fortune but not a big one and extremely low risk tolerance it could...
by Clearly_Irrational
Sat Oct 11, 2014 6:16 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

You know, now that I think about it, I doubt my performance was as good as I thought at the time. Back then I was benchmarking against the S&P 500 but essentially following strategy with hefty doses of small, value and momentum. A proper factor analysis would probably show a very small alpha val...
by Clearly_Irrational
Fri Oct 10, 2014 5:57 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

Posts like this amuse me as they all start out the same. I don't advise market timing or individual stock selection even though I did reasonably well with that approach. Sure you did... they all do... For me, the problem wasn't the inability to make successful trades or make a good return, instead ...
by Clearly_Irrational
Fri Oct 10, 2014 5:33 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: What have you done to cut costs this year?

I would hate it if I popped up in one of my summer homes and the shoes of my staff were less polished than the Hubble Telescope. Victoria Well, those are the harsh facts of life when you're only a multi-millionaire and not a billionaire. Not everyone can have a fleet of helicopters and a lair under...
by Clearly_Irrational
Fri Oct 10, 2014 3:39 pm
 
Forum: Personal Consumer Issues
Topic: What have you done to cut costs this year?
Replies: 105
Views: 8205

Re: is anything 'cheap' out there?

I thought the EMH was that everything is fairly priced in risk adjusted terms. Not exactly. EMH just says that all available information is already priced in. That still leaves the possibility of widespread mis-valuing if the majority of the participants are interpreting the data incorrectly. In an...
by Clearly_Irrational
Fri Oct 10, 2014 1:53 pm
 
Forum: Investing - Theory, News & General
Topic: is anything 'cheap' out there?
Replies: 54
Views: 5503

Re: is anything 'cheap' out there?

Russian equities maybe?
by Clearly_Irrational
Fri Oct 10, 2014 1:18 pm
 
Forum: Investing - Theory, News & General
Topic: is anything 'cheap' out there?
Replies: 54
Views: 5503

Re: What have you done to cut costs this year?

We've been cutting pretty seriously for the last several years so it's hard to find much left to work with. We did manage a few wins though:

Switched many of our lightbulbs to LEDs
Changed Insurance Carriers (Allstate to USAA)
by Clearly_Irrational
Fri Oct 10, 2014 1:16 pm
 
Forum: Personal Consumer Issues
Topic: What have you done to cut costs this year?
Replies: 105
Views: 8205

Re: What have you done to cut costs this year?

There is a single butler per household who is in charge of all domestic activities and other servants. If you have five houses, you need five butlers. If you have fewer than that, you are probably referring to other domestic workers, not butlers. Victoria Maybe he went with a smart staffing plan wh...
by Clearly_Irrational
Fri Oct 10, 2014 1:11 pm
 
Forum: Personal Consumer Issues
Topic: What have you done to cut costs this year?
Replies: 105
Views: 8205

Re: Headed for a 300+ point loss today?

Clearly_Irrational, you seem to be holding a crystalball? How can you predict with such specificity? How good is your track record in the past? Reason I am asking is today is my DCA installment date and am in two minds to pull the trigger! I don't have a crystal ball, but I have actively traded in ...
by Clearly_Irrational
Fri Oct 10, 2014 12:19 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

I received a nice sum today for the unused annual leave (vacations). This money is "unaccounted for" in my retirement calculations and by 15:00, I'll decide if I want to drop it into the market. I think I'll buy equities if they drop today 1%, or more. Victoria Short term S&P 500 tren...
by Clearly_Irrational
Fri Oct 10, 2014 11:16 am
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Hold the Line

Clearly_Irrational: The full complement of the four charts in your July post that you linked to are wonderful. I hope you keep posting them at intervals in the future, as they are very instructive about current markets conditions. Not for market timing purposes, but just for general knowledge. Than...
by Clearly_Irrational
Thu Oct 09, 2014 4:55 pm
 
Forum: Investing - Theory, News & General
Topic: Hold the Line
Replies: 11
Views: 1419

Re: Hold the Line

• Using the simplified Gordon Equation (Expected Return = Dividend Yield + Dividend Growth Rate), with the current yield of the S&P 500 at 2.0%, we get a "rational" expected stock return of 5.8% nominal (2.0% + 3.8%).[/list] This certainly points to a lower-return decade going forward...
by Clearly_Irrational
Thu Oct 09, 2014 4:50 pm
 
Forum: Investing - Theory, News & General
Topic: Hold the Line
Replies: 11
Views: 1419

Re: Headed for a 300+ point loss today?

Bungo wrote:Just for fun, I calculated my personal return for the day:


Ok, I'll play:

VBR -2.34%
VEU -2.52%
TLT -0.44%
GLD +0.13%

As you can see from the long term bond results and only minor gold movement no one serious is in a panic or they'd be much higher.
by Clearly_Irrational
Thu Oct 09, 2014 4:43 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Headed for a 300+ point loss today?

munemaker wrote:Because I dollar cost average into the market, I really do not care if it is up or down. If it is down, new purchases are less expensive. If it is up, then I am making money.


It probably depends on the size of your purchases vs. the size of your current portfolio.
by Clearly_Irrational
Thu Oct 09, 2014 4:37 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Hold the Line

People have been talking a lot about buybacks, are they included, and if not what would be the likely effect of including them? Nudge the line up a trifle? But I suppose the fitted line would steepen along with it? Hmm, buybacks should raise price without effecting dividends so I think the effect i...
by Clearly_Irrational
Thu Oct 09, 2014 2:12 pm
 
Forum: Investing - Theory, News & General
Topic: Hold the Line
Replies: 11
Views: 1419

Re: Headed for a 300+ point loss today?

staythecourse wrote:I'll stick to my usual response of who cares? That would be my answer if the market was down 600 points or up 600 points.


If it went down 600 points in one day I'd be concerned.
by Clearly_Irrational
Thu Oct 09, 2014 1:57 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494

Re: Hold the Line

If I understand your chart correctly, you're plotting cash dividends for the S&P 500 on the x-axis against a constant dividend/price ratio (the trend line) to determine a rational expected price for the S&P 500 on the y-axis? If I might ask, what's the slope of the trend line (the dividend ...
by Clearly_Irrational
Thu Oct 09, 2014 1:55 pm
 
Forum: Investing - Theory, News & General
Topic: Hold the Line
Replies: 11
Views: 1419

Re: Headed for a 300+ point loss today?

What is the significance of severe volatility in the market with no catastrophic events evident to justify such volatility? The S&P swinging by over 33 points up then down (up till this hour) on two successive days?!! Is it a signal for something about to happen? Long term it's pretty much mean...
by Clearly_Irrational
Thu Oct 09, 2014 1:04 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 430
Views: 28494
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