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

Johno wrote:The evidence is actually fairly clear that some people can


I would actually suggest that this is not proven to exceed random chance.
by Clearly_Irrational
Fri Oct 31, 2014 3:03 pm
 
Forum: Investing - Theory, News & General
Topic: Why do Engineers Think They’ll Be Good at Picking Stocks?
Replies: 132
Views: 9353

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

Johno wrote:Somebody actually picking stocks, probably many fewer than 50, might be good at it, and thus have an advantage doing it.


The evidence suggests that's pretty unlikely over the long term.
by Clearly_Irrational
Fri Oct 31, 2014 1:29 pm
 
Forum: Investing - Theory, News & General
Topic: Why do Engineers Think They’ll Be Good at Picking Stocks?
Replies: 132
Views: 9353

Re: Blog: Harry Browne's Permanent Portfolio

Wow that is a bold portfolio, Clearly_Irrational...I love it! It's actually not as crazy as it looks. It's basically Markotwitz flavored with Fama/French and some fundamental diversification Harry Browne style. In most scenarios even if I'm wrong about some of those things it should perform adequat...
by Clearly_Irrational
Thu Oct 30, 2014 4:19 pm
 
Forum: Investing - Theory, News & General
Topic: Blog: Harry Browne's Permanent Portfolio
Replies: 48
Views: 4888

Re: Blog: Harry Browne's Permanent Portfolio

Are you assuming gold's expected return is not a function of real interest rates? I could see shifting from gold to cash when real interest rates are positive if the underlying assumption is that gold always has an expected return of zero real. However, I believe gold's price should take into accou...
by Clearly_Irrational
Thu Oct 30, 2014 4:13 pm
 
Forum: Investing - Theory, News & General
Topic: Blog: Harry Browne's Permanent Portfolio
Replies: 48
Views: 4888

Re: Blog: Harry Browne's Permanent Portfolio

Just to reiterate what I've posted before, holding a mix of 25% stocks, 50% treasury securities, and 25% gold has historically been a low-volatility allocation. It is one of several allocations that cuts "left tail risk"; i.e, the magnitude of portfolio drawdowns. Yep, that's the good par...
by Clearly_Irrational
Thu Oct 30, 2014 2:28 pm
 
Forum: Investing - Theory, News & General
Topic: Blog: Harry Browne's Permanent Portfolio
Replies: 48
Views: 4888

Re: A Challenge for Bogleheads - the market has changed

If you're going to market time then you need a plan. Post your ruleset and a backtest. If you can't at least show it worked in the past then you're just blowing off your own foot with a shotgun. Once you have a descriptive model then we can discuss whether it's predictive.
by Clearly_Irrational
Wed Oct 29, 2014 12:33 pm
 
Forum: Investing - Theory, News & General
Topic: A Challenge for Bogleheads - the market has changed
Replies: 47
Views: 4204

Re: Career Advice for an Unhappy Young Doctor?

she says she still feels totally stressed out and unhappy and doesn't want to go to work every day. Welcome to the real world. That's what I was thinking. Work isn't all rainbows and unicorns or they wouldn't pay you to do it. That said, it sounds like she's mostly suffering from accumulated fatigu...
by Clearly_Irrational
Tue Oct 28, 2014 3:07 pm
 
Forum: Personal Finance (Not Investing)
Topic: Career Advice for an Unhappy Young Doctor?
Replies: 76
Views: 6861

Re: A Backtest of the Dividend Growth Model, 1871-2010

I do want to remind folks that Vanguard's paper did show R2 >0.8 when you focused on just the extremes of P/E ratios. Somehow I thought that the R2 was>0.8 if one had P/E <10 or >25. Anything in between did not mean much. That info. is possibly useful to implement in one's IPS. That's one of the wa...
by Clearly_Irrational
Tue Oct 28, 2014 2:45 pm
 
Forum: Investing - Theory, News & General
Topic: A Backtest of the Dividend Growth Model, 1871-2010
Replies: 68
Views: 3735

Re: A Backtest of the Dividend Growth Model, 1871-2010

All the models suck, but they're still better than just throwing darts. Normally the two questions you want to answer are "Am I saving enough" and "How much can I spend". Putting some sort of boundaries around those numbers is helpful in getting you at least in the right ballpark...
by Clearly_Irrational
Tue Oct 28, 2014 2:44 pm
 
Forum: Investing - Theory, News & General
Topic: A Backtest of the Dividend Growth Model, 1871-2010
Replies: 68
Views: 3735

Re: Headed for a 300+ point loss today?

I was going to ask why you are talking about trading on a forum like Bogleheads, but I guess the whole of this ridiculous thread can let you off. VictoriaF had some unplanned money that she was deciding if she wanted to add it to her portfolio on Fri Oct 10th. Since that's not a regular addition th...
by Clearly_Irrational
Tue Oct 28, 2014 1:12 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 445
Views: 30538

Re: Headed for a 300+ point loss today?

You expect the next big move to come in mid November, correct? Are you thinking a big move up or down? With the system I'm using, bollinger bands, that's hard to tell. It's a volatility predictor. Macros tend not to be reliable over that sort of time frame either. We'd have to wait till we got clos...
by Clearly_Irrational
Tue Oct 28, 2014 12:21 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 445
Views: 30538

Re: Headed for a 300+ point loss today?

Ignatious P. Daily wrote:Net net, I have seen no evidence that anyone beat a benchmark on a risk adjusted basis over a long period of time with technical analysis.


Based on the evidence I've seen that sentence is too long, drop the last three words.
by Clearly_Irrational
Mon Oct 27, 2014 6:38 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 445
Views: 30538

Re: Headed for a 300+ point loss today?

I used to work at a firm that had a technician who issued weekly market letters. I couldn't figure out why, if a stock went through its support or resistance level, it then was assigned a new support and resistance level, reflecting the move in the stock. I just ignored it all. Everything in techni...
by Clearly_Irrational
Mon Oct 27, 2014 6:05 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 445
Views: 30538

Re: Headed for a 300+ point loss today?

I think you should start your own thread and document your predictions there and make it sticky, so people can refer to them regularly just like checking weather before heading out of the house :) I mostly do it for fun nowadays. I post them when it seems relevant to whatever thread I was following...
by Clearly_Irrational
Mon Oct 27, 2014 5:36 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 445
Views: 30538

Re: Headed for a 300+ point loss today?

The big surge upwards appears to be losing steam. The most likely outcome in the short term is a flat or very slightly rising market as the bollinger bands contract prior to a new bigger move. The bottom width of most bollinger patterns this year has been around a month, so I'd expect things to get ...
by Clearly_Irrational
Mon Oct 27, 2014 5:26 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 445
Views: 30538

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: 132
Views: 9353

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: 2501

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: 2501

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: 2501

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: 2501

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: 132
Views: 9353

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: 445
Views: 30538

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: 445
Views: 30538

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: 3068

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: 790

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: 445
Views: 30538

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: 445
Views: 30538

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: 445
Views: 30538

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: 445
Views: 30538

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: 445
Views: 30538

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: 445
Views: 30538

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: 445
Views: 30538

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: 445
Views: 30538

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: 445
Views: 30538

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: 445
Views: 30538

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: 445
Views: 30538

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: 445
Views: 30538

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: 445
Views: 30538

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: 445
Views: 30538

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: 2246

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: 7038

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: 2246

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: 2246

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: 157601

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: 445
Views: 30538

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: 2306

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: 445
Views: 30538

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: 445
Views: 30538

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: 445
Views: 30538
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