Market timers thread

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DonIce
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Re: Market timers thread

Post by DonIce »

Barsoom wrote: Wed Mar 27, 2019 4:10 pm Because "all the smart people on wall street" represent such a small number of people overall who trade, that they don't really move the needle all by themselves?
I would double check this assumption. I don't think it's a good one.
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kenyan
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Re: Market timers thread

Post by kenyan »

DonIce wrote: Wed Mar 27, 2019 4:34 pm
Barsoom wrote: Wed Mar 27, 2019 4:10 pm Because "all the smart people on wall street" represent such a small number of people overall who trade, that they don't really move the needle all by themselves?
I would double check this assumption. I don't think it's a good one.
Right...the key is not the number of people making the trades; it's the number of dollars. Those smart people are the ones moving the dollars, and they certainly move the needle by themselves.
Retirement investing is a marathon.
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willthrill81
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Re: Market timers thread

Post by willthrill81 »

Barsoom wrote: Wed Mar 27, 2019 4:10 pm
marcopolo wrote: Wed Mar 27, 2019 3:35 pm It does sound so simple, doesn't it?
Don't you suppose all the smart people on wall street employing data analysts out of MIT for 6 figure salaries would have thought of this?

Wouldn't you expect at least some of them would have opened a few mutual funds that did this and soundly trounced the markets?

Where are all those funds?

Someone will come around and point MTUM, and I guess that is a fair point, but is that survivor bias or real structural over performance. As a counter example, I would point to GTAA run by Mebane Faber (one of the trend following "guru"). You can Google it to see how that turned out.
I am sure he is a really smart guy, why couldn't he make it work?

How will you ensure you will be MTUM rather than GTAA?
Because "all the smart people on wall street" represent such a small number of people overall who trade, that they don't really move the needle all by themselves?

I'm not saying I'm going to follow trends, but I'm curious to study them. And if I see a tsunami wave coming, who knows?

-B
To be honest, I really think that at least some of the 'buy-and-hold is the only logical way to invest' crowd are experiencing a certain degree of selection bias. I'm a big stock proponent, but I must acknowledge that stock markets have gone to zero at least twice (Russia and China) and many others have gone nowhere for a long time (e.g. Japan). The same might happen for the U.S. or indeed most large markets (the lion's share of global market cap is in just eight countries). The fact that buy-and-hold has worked well in most of the past does not mean that it will work well in the future. I do not offer this as an indictment of buy-and-hold nor as an endorsement of market timing, merely as a warning that the future may look very different in the past, and any strategy that worked well before may not going forward.

It seems safe to assume that the future won't look quite like what anyone expects it to.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
marcopolo
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Re: Market timers thread

Post by marcopolo »

willthrill81 wrote: Thu Mar 28, 2019 4:32 pm
Barsoom wrote: Wed Mar 27, 2019 4:10 pm
marcopolo wrote: Wed Mar 27, 2019 3:35 pm It does sound so simple, doesn't it?
Don't you suppose all the smart people on wall street employing data analysts out of MIT for 6 figure salaries would have thought of this?

Wouldn't you expect at least some of them would have opened a few mutual funds that did this and soundly trounced the markets?

Where are all those funds?

Someone will come around and point MTUM, and I guess that is a fair point, but is that survivor bias or real structural over performance. As a counter example, I would point to GTAA run by Mebane Faber (one of the trend following "guru"). You can Google it to see how that turned out.
I am sure he is a really smart guy, why couldn't he make it work?

How will you ensure you will be MTUM rather than GTAA?
Because "all the smart people on wall street" represent such a small number of people overall who trade, that they don't really move the needle all by themselves?

I'm not saying I'm going to follow trends, but I'm curious to study them. And if I see a tsunami wave coming, who knows?

-B
To be honest, I really think that at least some of the 'buy-and-hold is the only logical way to invest' crowd are experiencing a certain degree of selection bias. I'm a big stock proponent, but I must acknowledge that stock markets have gone to zero at least twice (Russia and China) and many others have gone nowhere for a long time (e.g. Japan). The same might happen for the U.S. or indeed most large markets (the lion's share of global market cap is in just eight countries). The fact that buy-and-hold has worked well in most of the past does not mean that it will work well in the future. I do not offer this as an indictment of buy-and-hold nor as an endorsement of market timing, merely as a warning that the future may look very different in the past, and any strategy that worked well before may not going forward.

It seems safe to assume that the future won't look quite like what anyone expects it to.
I largely agree with your assessment and that future will certainly be different from the past.

But, the past is all we have to rely on since none of us can know exactly how the future will be different.

Even your particular trend following is based on analysis of historical data, isn't it? So, it seems you are also taking a leap of faith that the future will at least resemble the past to a certain degree.

For me, I would rather rely on an approach that has worked well in the past, and is robust to small tweaks. What I mean by that is if you change the approach a little, like mix of assets, rebalancing frequency, etc. The result are still quite stable, they change a little, but do not typically change dramatically.

It seems contrast with that are various analytical techniques that are so much overfitting to data, that small changes in parameters (moving average duration, when you check UE rate) to the model can produce dramatic differences in outcomes.

The future will be different, so I have a little bit more confidence in an approach that tends to be more stable than approaches that can change behavior more drastically as the underlying model changes over time.

I can, however, understand why others might approach things differently.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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willthrill81
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Re: Market timers thread

Post by willthrill81 »

marcopolo wrote: Thu Mar 28, 2019 7:39 pm
willthrill81 wrote: Thu Mar 28, 2019 4:32 pm
Barsoom wrote: Wed Mar 27, 2019 4:10 pm
marcopolo wrote: Wed Mar 27, 2019 3:35 pm It does sound so simple, doesn't it?
Don't you suppose all the smart people on wall street employing data analysts out of MIT for 6 figure salaries would have thought of this?

Wouldn't you expect at least some of them would have opened a few mutual funds that did this and soundly trounced the markets?

Where are all those funds?

Someone will come around and point MTUM, and I guess that is a fair point, but is that survivor bias or real structural over performance. As a counter example, I would point to GTAA run by Mebane Faber (one of the trend following "guru"). You can Google it to see how that turned out.
I am sure he is a really smart guy, why couldn't he make it work?

How will you ensure you will be MTUM rather than GTAA?
Because "all the smart people on wall street" represent such a small number of people overall who trade, that they don't really move the needle all by themselves?

I'm not saying I'm going to follow trends, but I'm curious to study them. And if I see a tsunami wave coming, who knows?

-B
To be honest, I really think that at least some of the 'buy-and-hold is the only logical way to invest' crowd are experiencing a certain degree of selection bias. I'm a big stock proponent, but I must acknowledge that stock markets have gone to zero at least twice (Russia and China) and many others have gone nowhere for a long time (e.g. Japan). The same might happen for the U.S. or indeed most large markets (the lion's share of global market cap is in just eight countries). The fact that buy-and-hold has worked well in most of the past does not mean that it will work well in the future. I do not offer this as an indictment of buy-and-hold nor as an endorsement of market timing, merely as a warning that the future may look very different in the past, and any strategy that worked well before may not going forward.

It seems safe to assume that the future won't look quite like what anyone expects it to.
I largely agree with your assessment and that future will certainly be different from the past.

But, the past is all we have to rely on since none of us can know exactly how the future will be different.

Even your particular trend following is based on analysis of historical data, isn't it? So, it seems you are also taking a leap of faith that the future will at least resemble the past to a certain degree.
Yes, I am.
marcopolo wrote: Thu Mar 28, 2019 7:39 pmFor me, I would rather rely on an approach that has worked well in the past, and is robust to small tweaks. What I mean by that is if you change the approach a little, like mix of assets, rebalancing frequency, etc. The result are still quite stable, they change a little, but do not typically change dramatically.
I can certainly understand that and would never fault someone for choosing such a strategy.
marcopolo wrote: Thu Mar 28, 2019 7:39 pmIt seems contrast with that are various analytical techniques that are so much overfitting to data, that small changes in parameters (moving average duration, when you check UE rate) to the model can produce dramatic differences in outcomes.

The future will be different, so I have a little bit more confidence in an approach that tends to be more stable than approaches that can change behavior more drastically as the underlying model changes over time.
A big part of the reason that I selected my specific trend following strategy is because the parameters have tended to be stable over time (e.g. the long-term results of a 10 month moving average are similar to a 7 month and a 12 month). There's nothing particularly unique about the specific parameters I've selected.
marcopolo wrote: Thu Mar 28, 2019 7:39 pmI can, however, understand why others might approach things differently.
Excellent! Far too many here few investment strategy, decisions, etc. in binary terms, mainly that there is one right way and all others are wrong. But it's called personal finance for good reason, and it's appropriate to recognize that there is no one-size-fits-all approach to it. :beer
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
MotoTrojan
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Re: Market timers thread

Post by MotoTrojan »

Carol88888 wrote: Sun Mar 24, 2019 1:35 pm It isn't that hard to get back into the market. You can draw up a plan that says "at a 10% pullback, 10% of the cash gets redeployed into equities; at a 20% decline, another 20% goes in; at 30% down from the top toss in the remainder." Use what parameters you want.
What if the market goes up 15% before a 10% pullback with no other changes in fundamentals, do you still deploy 10%? Do you feel good about it? This is an incomplete/flawed plan.
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Taylor Larimore
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Re: Market timers thread

Post by Taylor Larimore »

dkturner wrote: Sun Mar 24, 2019 12:48 pm I had noticed that Jack Bogle rarely posted anything on these boards either. I guess his remarks, that there was nothing wrong with taking advantage of depressed equity prices to increase equity exposure by up to 15 percentage points (remember - he didn’t believe in periodic “rebalancing”), didn’t fit in with the sensibilities of many of the usual suspects around here.
dkturner:

This is a portion of what Mr. Bogle wrote (page 88-89) in his 10th Anniversary Issue of Common Sense on Mutual Funds::
Once you have determined a strategic long-term asset allocation, you must decide whether this balance will be relatively fixed or dynamic. There are two principal options. You can (1) keep your strategic ratio fixed, periodically buying and selling stocks and bonds to restore your portfolio to its original allocation, or (2) set an initial allocation and then let your investment profits ride. In the latter case, your initial allocation will gradually evolve to reflect the relative performance of stocks and bonds.

Many investors will find greater peace of mind with a stable balance of stocks and bonds--a strategy that is counterintuitive but may prove productive--than with taking no action and allowing risk exposure to rise in tandem with the stock market--a strategy that is intuitive but may prove counterproductive.
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
AlohaJoe
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Re: Market timers thread

Post by AlohaJoe »

typical.investor wrote: Sun Mar 24, 2019 12:23 am Not getting out, but am thinking about Strategic Rebalancing if markets fall a great degree. Or perhaps, more likely, using such a strategy in retirement when sequence of return risk is a threat.
ABSTRACT
A mechanical rebalancing strategy, such as a monthly or quarterly reallocation towards fixed portfolio weights, is an active strategy. Winning asset classes are sold and losers are bought. During crises, when markets are often trending, this can lead to substantially larger drawdowns than a buy-and-hold strategy. Our paper shows that the negative convexity induced by rebalancing can be substantially mitigated, taking the popular 60-40 stock-bond portfolio as our use case. One alternative is an allocation to a trend-following strategy. The positive convexity of this overlay tends to counter the impact on drawdowns of the mechanical rebalancing strategy. The second alternative we call strategic rebalancing, which uses smart rebalancing timing based on trend-following signals –without a direct allocation to a trend-following strategy. For example, if the trend-following model suggests that stock markets are in a negative trend, rebalancing is delayed.
Strategic Rebalancing
NICOLAS GRANGER, CAMPBELL R. HARVEY, SANDY RATTRAY, and OTTO VAN HEMERT1
I read this paper today. Initially I was quite interested because, on the surface, it sounds like what many Bogleheads already are actually doing. There are lots of anecdotes on the forum from people who stopped rebalancing on the way down in 2007-9. (We also know that people don't look at their portfolios as much when things are down, which means less rebalancing probably happens due to that as well.) This paper seemed like a formalisation of that probably fairly common behaviour: instead of relying on gut feels & fear, can we use trend signals for it?

After all rebalancing is a short volatility strategy and if trend signals can help us skip some of the downside volatility we'll come out ahead.

Image

In general, I don't find the results that amazing. Take the 3-month trend example. On average drawdowns are improved just 1.9% (so, instead of -20% drop you get a -18.9% drop). That already somewhat meager result is due in large part to the amazing performance in 2008. If we look at every other draw down, the average was only a 1.15% improvement (-18.9% instead of -20%).

But in reality, even that overstates the results because it is comparing against a baseline where you rebalance monthly. An earlier table in their paper compares the baseline to rebalancing at different frequencies (or with thresholds):

Image

So annual rebalancing (the kind most likely to be practiced by someone who hasn't really thought about it much) is already a 0.9% improvement over monthly rebalancing.

In other words, the simple real world default of annual rebalancing captures 47% of the improvement that the 3-month trend signal does.

So it is hard to be too excited about the idea. That said, it does seem like an area that warrants more research.

I'm also a bit surprised that the found that threshold-based rebalancing did so poorly, which seems contrary to some other research I've seen.
Rus In Urbe
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Re: Market timers thread

Post by Rus In Urbe »

revhappy wrote:
In my career of past 15 odd years, I have remained invested very little and it has been adhoc and most of my networth is out of savings rather than investment returns. So I guess, I will continue to stay in fixed income until there is fear and turmoil on the streets.

Svensk Anga wrote:
So your investing experience extends back through the 2008/2009 crash. Did you load up on equities then, when we had the sale of a lifetime? My guess is not. Even experienced investors and some advisors were afraid to buy or even bailing out at the lows. That's the problem with planning to buy in at the low: economic prospects look terrible at the time. Every financial porn site is running stories about how much worse it is going to get. There is no optimism evident anywhere. Well, Warren Buffett was probably jumping with joy at the prospects for deploying his cash horde, but he is an outlier. So the low slips by while you are waiting for a lower low. The media will be saying the current rally off the bottom is just a dead cat bounce, more losses lie ahead. Beware the double-dip recession which is surely coming.

If you are hesitant to buy in at valuations that prevail 90% of the time, you will never screw up the courage to buy in when stocks are truly cheap.
+1,000

I'm reading this and laughing until there are tears in my eyes---or am I crying? Yes, it was amazing as an investor to live through 2001 and then 2008-----does anyone here really remember the blood ("fear and turmoil") in the streets and all the screaming: THIS TIME IT IS COMPLETELY DIFFERENT! Yep. Everytime the market drops seriously it is "completely different." Anyone who hasn't got the guts to be in the market during rosy times absolutely does not have the fortitude (or risk-taking ability) to jump back in at the bottom, no matter what they tell themselves. The whole idea is beyond absurd---a kind of delusion!

If OP would rather just save his way to wealth, then that's a choice. Me, I preferred the combo of saving PLUS investing, with all our investments trickling in automatically for years. During the bad times (2001, 2008), we simply didn't look at our accounts for long stretches while our money bought stocks at an incredible discount, month after month. During The Great Recovery, we cheered and made out like bandits. I still can't believe the money we have accumulated, it's unreal. Einstein was right. So was Jack Bogle. Thanks, Jack, for making us rich beyond what I ever could have imagined!

Market timers are a strange breed. I think it's a kind of religious fervor that goes beyond any facts that can be presented to the contrary.

Taylor Larrimore's post upthread with all those wise people citing data, citing experience----brilliant!

But....you can lead a horse to water . . .
I'd like to live as a poor man with lots of money. ~Pablo Picasso
typical.investor
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Re: Market timers thread

Post by typical.investor »

AlohaJoe wrote: Wed Apr 17, 2019 5:33 am
I read this paper today. Initially I was quite interested because, on the surface, it sounds like what many Bogleheads already are actually doing. There are lots of anecdotes on the forum from people who stopped rebalancing on the way down in 2007-9. (We also know that people don't look at their portfolios as much when things are down, which means less rebalancing probably happens due to that as well.) This paper seemed like a formalisation of that probably fairly common behaviour: instead of relying on gut feels & fear, can we use trend signals for it?

After all rebalancing is a short volatility strategy and if trend signals can help us skip some of the downside volatility we'll come out ahead.

Image

In general, I don't find the results that amazing. Take the 3-month trend example. On average drawdowns are improved just 1.9% (so, instead of -20% drop you get a -18.9% drop). That already somewhat meager result is due in large part to the amazing performance in 2008. If we look at every other draw down, the average was only a 1.15% improvement (-18.9% instead of -20%).

But in reality, even that overstates the results because it is comparing against a baseline where you rebalance monthly. An earlier table in their paper compares the baseline to rebalancing at different frequencies (or with thresholds):

Image

So annual rebalancing (the kind most likely to be practiced by someone who hasn't really thought about it much) is already a 0.9% improvement over monthly rebalancing.

In other words, the simple real world default of annual rebalancing captures 47% of the improvement that the 3-month trend signal does.
I am planning to use the 12-month trend to possibly delay rebalancing..

First, the average of 3.0% improvement is better than 0.8% or 0.9% with simple yearly done on a clock. (the 0.9% improvement in the "Half" column means you rebalance halfway back to 60-40). It's actually double the improvement that a simple yearly rebalance has (compared to monthly rebalancing) at 5.6% vs 2.8%.

Also, it avoids making things worse in a case like '87.

I agree it is surprising that the threshold rebalancing didn't go so well.

Maybe I'll do a hybrid -- 5% band but delay rebalancing if the 365 day trend is negative. The delay method in the charts is actually set to monthly and then delayed. That's why it has such a high %months rebalanced at 42% and a higher cost estimate than bands.

Nice posting of the graphs by the way!
Achkelone
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Re: Market timers thread

Post by Achkelone »

revhappy wrote: Sat Mar 23, 2019 10:35 pm Creating this thread specifically for people who are trying to time the markets and are in significant cash levels and underweight on equities.
Count me in. There's talks of a possible recession in a near future, and being in capitalisation phase, I'd selfishly love for this to happen.
I plan on letting 50% of my assets (but I'm not even worth 50k€ so there's that) sleep on my cash account for up to two years, give or take. Hopefully the doom will have started to materialise by then. Buying shares at -20%, at least, would be sweet.

If it hasn't and the market went up, well, I'll have lost 2 years worth of compounding and will have to buy further shares at a higher price.
But I'll also have regularly invested in the market in the meantime, since every month a good chunk of my salary goes to ETF shares. So no regrets will be had. Why ? Because I'll have failed at timing the market... except timing the market is not my main investment strategy. Here, timing is just an opportunity (being at the potential end of a bull market). Thus the opportunity cost of this « minutage opportuniste » becomes acceptable in my book.
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wshang
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Re: Market timers thread

Post by wshang »

I engage in a very rudimentary form of market timing. I let the cash from dividends and capital gains build up. If the market declines 10%, I'll spend about 50% of the hoard. If it goes to -15%, I'm all in.
The cure shouldn't be worse than the disease.
CraigTester
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Re: Market timers thread

Post by CraigTester »

OP -- I just noticed your topic and am chuckling over the predictable responses.

As you are finding, there are about a half dozen or so self appointed "guardians" of this board that absolutely refuse to believe that its possible to time the market.

And more importantly, they seem to feel it is their duty to immediately shut down any discussion to the contrary.

I suppose this is either because they actually "believe" they are protecting the "naive" from being fooled...., or perhaps more ominously, they are concerned that they are already on public record for taking sides on an issue where they are wrong.

No matter, it is absolutely possible to time the market. I've been doing it successfully for over 20 years and folks like Warren Buffett have been doing it for over 50.

A long list of others have also found success, but the last thing any of them are going to do is explain how they do it on an internet chat board.

This is not because they are "selfish" necessarily, but rather, if they explained things well enough that others could copy, their own ability to find success would be hindered.

But the good news in all this is that the Boglehead buy-n-hold method is not terrible. Its very easy to follow and with the exception of enduring gut wrenching periods of extended losses, does ultimately provide a decent long term return.

Given all this, I fear you will find it impossible to generate the type of conversation you are seeking on this platform.

But I do encourage you to keep doing your homework. And if you ever do figure out how to do it, maybe you can be the first to publicly spill the beans.

Best of luck,

Craigtester
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corn18
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Re: Market timers thread

Post by corn18 »

CraigTester wrote: Fri Apr 19, 2019 2:38 pm OP -- I just noticed your topic and am chuckling over the predictable responses.

As you are finding, there are about a half dozen or so self appointed "guardians" of this board that absolutely refuse to believe that its possible to time the market.

And more importantly, they seem to feel it is their duty to immediately shut down any discussion to the contrary.

I suppose this is either because they actually "believe" they are protecting the "naive" from being fooled...., or perhaps more ominously, they are concerned that they are already on public record for taking sides on an issue where they are wrong.

No matter, it is absolutely possible to time the market. I've been doing it successfully for over 20 years and folks like Warren Buffett have been doing it for over 50.

A long list of others have also found success, but the last thing any of them are going to do is explain how they do it on an internet chat board.

This is not because they are "selfish" necessarily, but rather, if they explained things well enough that others could copy, their own ability to find success would be hindered.

But the good news in all this is that the Boglehead buy-n-hold method is not terrible. Its very easy to follow and with the exception of enduring gut wrenching periods of extended losses, does ultimately provide a decent long term return.

Given all this, I fear you will find it impossible to generate the type of conversation you are seeking on this platform.

But I do encourage you to keep doing your homework. And if you ever do figure out how to do it, maybe you can be the first to publicly spill the beans.

Best of luck,

Craigtester
You seem flummoxed by the response to a market timing thread in a boglehead forum. Maybe you could show me the page in the wiki that explains how bogleheads time the market. It's not congruent with the boglehead philosophy so why be surprised with the pushback?

And congratulations on the I'm smarter than ya'll approach to making friends and influencing people. My kids like to play I have a secret, too.
Don't do something, just stand there!
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Toons
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Re: Market timers thread

Post by Toons »

I got in around 1980
Not sure when I will
"Get Out"



:mrgreen:
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ImUrHuckleberry
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Re: Market timers thread

Post by ImUrHuckleberry »

I generally buy and hold low cost index funds but dabble at market timing these funds without a real solid plan. I swapped chunks of my bonds for stocks in Feb 2019 and Dec 2019 (both times missing the low by a couple of days) and then just recently swapped those stocks back to bonds at about DOW 26200, so I missed the high for sure and time will tell by how much. But in this whole time I've maintained something between 80:20 and 60:40 stocks:bonds.

Next time the market drops 20% I'll push a chunk of bonds back to stocks, if it drops 30% another chunk, and if it drops 40% the rest go all in.
anoop
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Re: Market timers thread

Post by anoop »

I got out in early 2008 and never got back in.

That said, I don’t think a recession or even a correction is imminent mainly because that is what CalculatedRisk writes (no recession, he avoids talking about stocks) and he has been accurate so far. BTW he timed the market perfectly. He got out before the 2008 bust and then went all in in March 2009 and has stayed in ever since. So timing is possible...

Nowadays, central banks are very committed to supporting asset prices. I read somewhere the Japanese central bank is a majority stock owner is a significant number companies. The fed could easily choose to do the same thing.
CraigTester
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Re: Market timers thread

Post by CraigTester »

corn18 wrote: Fri Apr 19, 2019 4:17 pm
CraigTester wrote: Fri Apr 19, 2019 2:38 pm OP -- I just noticed your topic and am chuckling over the predictable responses.

As you are finding, there are about a half dozen or so self appointed "guardians" of this board that absolutely refuse to believe that its possible to time the market.

And more importantly, they seem to feel it is their duty to immediately shut down any discussion to the contrary.

I suppose this is either because they actually "believe" they are protecting the "naive" from being fooled...., or perhaps more ominously, they are concerned that they are already on public record for taking sides on an issue where they are wrong.

No matter, it is absolutely possible to time the market. I've been doing it successfully for over 20 years and folks like Warren Buffett have been doing it for over 50.

A long list of others have also found success, but the last thing any of them are going to do is explain how they do it on an internet chat board.

This is not because they are "selfish" necessarily, but rather, if they explained things well enough that others could copy, their own ability to find success would be hindered.

But the good news in all this is that the Boglehead buy-n-hold method is not terrible. Its very easy to follow and with the exception of enduring gut wrenching periods of extended losses, does ultimately provide a decent long term return.

Given all this, I fear you will find it impossible to generate the type of conversation you are seeking on this platform.

But I do encourage you to keep doing your homework. And if you ever do figure out how to do it, maybe you can be the first to publicly spill the beans.

Best of luck,

Craigtester
You seem flummoxed by the response to a market timing thread in a boglehead forum. Maybe you could show me the page in the wiki that explains how bogleheads time the market. It's not congruent with the boglehead philosophy so why be surprised with the pushback?

And congratulations on the I'm smarter than ya'll approach to making friends and influencing people. My kids like to play I have a secret, too.
Corn18

Ask yourself why you feel it necessary to lash out at a complete stranger on the internet who simply confirms that there are other ways to cross the bridge.

Why does it make you angry for someone to simply confirm that yes, market timing is not only possible, but is happening successfully every day?

Don't you see that this really shouldn't have any bearing on your decision to choose buy-n-hold..., IF you're happy with it?

But perhaps here lies the source of your anger.

I know I certainly wouldn't be happy being told that the "only" investment option I'm "allowed" to consider is one that guarantees I will lose 30%, 50%, 60% of my net worth during the next crash....

Why not join in the OP's attempt at a starting an intelligent discussion rather than just repeating the tired chorus?

Craigtester
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corn18
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Re: Market timers thread

Post by corn18 »

CraigTester wrote: Fri Apr 19, 2019 10:37 pm
corn18 wrote: Fri Apr 19, 2019 4:17 pm
CraigTester wrote: Fri Apr 19, 2019 2:38 pm OP -- I just noticed your topic and am chuckling over the predictable responses.

As you are finding, there are about a half dozen or so self appointed "guardians" of this board that absolutely refuse to believe that its possible to time the market.

And more importantly, they seem to feel it is their duty to immediately shut down any discussion to the contrary.

I suppose this is either because they actually "believe" they are protecting the "naive" from being fooled...., or perhaps more ominously, they are concerned that they are already on public record for taking sides on an issue where they are wrong.

No matter, it is absolutely possible to time the market. I've been doing it successfully for over 20 years and folks like Warren Buffett have been doing it for over 50.

A long list of others have also found success, but the last thing any of them are going to do is explain how they do it on an internet chat board.

This is not because they are "selfish" necessarily, but rather, if they explained things well enough that others could copy, their own ability to find success would be hindered.

But the good news in all this is that the Boglehead buy-n-hold method is not terrible. Its very easy to follow and with the exception of enduring gut wrenching periods of extended losses, does ultimately provide a decent long term return.

Given all this, I fear you will find it impossible to generate the type of conversation you are seeking on this platform.

But I do encourage you to keep doing your homework. And if you ever do figure out how to do it, maybe you can be the first to publicly spill the beans.

Best of luck,

Craigtester
You seem flummoxed by the response to a market timing thread in a boglehead forum. Maybe you could show me the page in the wiki that explains how bogleheads time the market. It's not congruent with the boglehead philosophy so why be surprised with the pushback?

And congratulations on the I'm smarter than ya'll approach to making friends and influencing people. My kids like to play I have a secret, too.
Corn18

Ask yourself why you feel it necessary to lash out at a complete stranger on the internet who simply confirms that there are other ways to cross the bridge.

Why does it make you angry for someone to simply confirm that yes, market timing is not only possible, but is happening successfully every day?

Don't you see that this really shouldn't have any bearing on your decision to choose buy-n-hold..., IF you're happy with it?

But perhaps here lies the source of your anger.

I know I certainly wouldn't be happy being told that the "only" investment option I'm "allowed" to consider is one that guarantees I will lose 30%, 50%, 60% of my net worth during the next crash....

Why not join in the OP's attempt at a starting an intelligent discussion rather than just repeating the tired chorus?

Craigtester
Are you saying all bogleheads are lemmings, unable to choose a path but simply blindly follow the wiki bible? Sure, nice thought. What the real truth is we tried the rest and now go with the best. You perceive this as ignorance or hubris. Good for you.
Don't do something, just stand there!
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Re: Market timers thread

Post by software »

CraigTester wrote: Fri Apr 19, 2019 10:37 pm
corn18 wrote: Fri Apr 19, 2019 4:17 pm
CraigTester wrote: Fri Apr 19, 2019 2:38 pm OP -- I just noticed your topic and am chuckling over the predictable responses.

As you are finding, there are about a half dozen or so self appointed "guardians" of this board that absolutely refuse to believe that its possible to time the market.

And more importantly, they seem to feel it is their duty to immediately shut down any discussion to the contrary.

I suppose this is either because they actually "believe" they are protecting the "naive" from being fooled...., or perhaps more ominously, they are concerned that they are already on public record for taking sides on an issue where they are wrong.

No matter, it is absolutely possible to time the market. I've been doing it successfully for over 20 years and folks like Warren Buffett have been doing it for over 50.

A long list of others have also found success, but the last thing any of them are going to do is explain how they do it on an internet chat board.

This is not because they are "selfish" necessarily, but rather, if they explained things well enough that others could copy, their own ability to find success would be hindered.

But the good news in all this is that the Boglehead buy-n-hold method is not terrible. Its very easy to follow and with the exception of enduring gut wrenching periods of extended losses, does ultimately provide a decent long term return.

Given all this, I fear you will find it impossible to generate the type of conversation you are seeking on this platform.

But I do encourage you to keep doing your homework. And if you ever do figure out how to do it, maybe you can be the first to publicly spill the beans.

Best of luck,

Craigtester
You seem flummoxed by the response to a market timing thread in a boglehead forum. Maybe you could show me the page in the wiki that explains how bogleheads time the market. It's not congruent with the boglehead philosophy so why be surprised with the pushback?

And congratulations on the I'm smarter than ya'll approach to making friends and influencing people. My kids like to play I have a secret, too.
Corn18

Ask yourself why you feel it necessary to lash out at a complete stranger on the internet who simply confirms that there are other ways to cross the bridge.

Why does it make you angry for someone to simply confirm that yes, market timing is not only possible, but is happening successfully every day?

Don't you see that this really shouldn't have any bearing on your decision to choose buy-n-hold..., IF you're happy with it?

But perhaps here lies the source of your anger.

I know I certainly wouldn't be happy being told that the "only" investment option I'm "allowed" to consider is one that guarantees I will lose 30%, 50%, 60% of my net worth during the next crash....

Why not join in the OP's attempt at a starting an intelligent discussion rather than just repeating the tired chorus?

Craigtester
Craig, I’d love for you to start a thread and document your trades in real time, compared to a reasonable benchmark.

I think the reason most bogle heads eschew market timing is put best by John Bogle:

“The idea that a bell rings to signal when investors should get into or out of the market is simply not credible. After nearly 50 years in this business, I do not know of anybody who has done it successfully and consistently. I don’t even know anybody who knows anybody who has done it successfully and consistently.”
— John C. Bogle

You might be the guy that has found a way to do it consistently though, and can prove that idea wrong.

It would be a fun thread to follow at least.
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Re: Market timers thread

Post by market timer »

anoop wrote: Fri Apr 19, 2019 6:47 pmThat said, I don’t think a recession or even a correction is imminent mainly because that is what CalculatedRisk writes (no recession, he avoids talking about stocks) and he has been accurate so far.
If we have a recession in the next year or two, my guess is it will look like the 2001 recession. That was a shallow recession, but we still experienced fairly severe losses in equities, particularly in technology stocks. I see similarities between the money losing dot-com IPOs of the late 1990s and the typically money losing platform IPOs today (e.g., Lyft, Uber, Airbnb, Pinterest, Slack).

Funny things happen when investors are willing to overlook yawning losses in the hope of profitability to emerge someday in the future. Companies discount their products and services below cost to get volume. Truly enormous sums of advertising dollars are poured into Google and Facebook, and to Amazon Web Services for server capacity. Starting compensation for 21-year-old CS grads is bid up to over $200K. Housing affordability in tech centers like San Francisco defies logic. I am quite certain that all these trends will end in the next few years. That is to say, if investors become somewhat more skeptical of the business models of companies that have only demonstrated an ability to lose money and raise capital, we could see ripple effects in safer assets, economic activity, and jobs. However, I believe this will be concentrated in tech, similar to 2001.

The far more pessimistic scenario for me (from an asset pricing perspective) involves fiscal imbalances reaching a breaking point, rising populism leading to meaningful policy changes, and inflation. The economy is so leveraged today that a return to moderately high inflation and interest rates would be devastating.
Last edited by market timer on Fri Apr 19, 2019 11:22 pm, edited 1 time in total.
CraigTester
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Re: Market timers thread

Post by CraigTester »

software wrote: Fri Apr 19, 2019 10:59 pm
CraigTester wrote: Fri Apr 19, 2019 10:37 pm
corn18 wrote: Fri Apr 19, 2019 4:17 pm
CraigTester wrote: Fri Apr 19, 2019 2:38 pm OP -- I just noticed your topic and am chuckling over the predictable responses.

As you are finding, there are about a half dozen or so self appointed "guardians" of this board that absolutely refuse to believe that its possible to time the market.

And more importantly, they seem to feel it is their duty to immediately shut down any discussion to the contrary.

I suppose this is either because they actually "believe" they are protecting the "naive" from being fooled...., or perhaps more ominously, they are concerned that they are already on public record for taking sides on an issue where they are wrong.

No matter, it is absolutely possible to time the market. I've been doing it successfully for over 20 years and folks like Warren Buffett have been doing it for over 50.

A long list of others have also found success, but the last thing any of them are going to do is explain how they do it on an internet chat board.

This is not because they are "selfish" necessarily, but rather, if they explained things well enough that others could copy, their own ability to find success would be hindered.

But the good news in all this is that the Boglehead buy-n-hold method is not terrible. Its very easy to follow and with the exception of enduring gut wrenching periods of extended losses, does ultimately provide a decent long term return.

Given all this, I fear you will find it impossible to generate the type of conversation you are seeking on this platform.

But I do encourage you to keep doing your homework. And if you ever do figure out how to do it, maybe you can be the first to publicly spill the beans.

Best of luck,

Craigtester
You seem flummoxed by the response to a market timing thread in a boglehead forum. Maybe you could show me the page in the wiki that explains how bogleheads time the market. It's not congruent with the boglehead philosophy so why be surprised with the pushback?

And congratulations on the I'm smarter than ya'll approach to making friends and influencing people. My kids like to play I have a secret, too.
Corn18

Ask yourself why you feel it necessary to lash out at a complete stranger on the internet who simply confirms that there are other ways to cross the bridge.

Why does it make you angry for someone to simply confirm that yes, market timing is not only possible, but is happening successfully every day?

Don't you see that this really shouldn't have any bearing on your decision to choose buy-n-hold..., IF you're happy with it?

But perhaps here lies the source of your anger.

I know I certainly wouldn't be happy being told that the "only" investment option I'm "allowed" to consider is one that guarantees I will lose 30%, 50%, 60% of my net worth during the next crash....

Why not join in the OP's attempt at a starting an intelligent discussion rather than just repeating the tired chorus?

Craigtester
Craig, I’d love for you to start a thread and document your trades in real time, compared to a reasonable benchmark.

I think the reason most bogle heads eschew market timing is put best by John Bogle:

“The idea that a bell rings to signal when investors should get into or out of the market is simply not credible. After nearly 50 years in this business, I do not know of anybody who has done it successfully and consistently. I don’t even know anybody who knows anybody who has done it successfully and consistently.”
— John C. Bogle

You might be the guy that has found a way to do it consistently though, and can prove that idea wrong.

It would be a fun thread to follow at least.
Buffett already did this.....and currently has record levels of cash, $100B, sitting in dry powder....

Although you'll often hear him tell everyone else they should just buy-n-hold an SP500 index fund, independent of valuation levels.....

And some people actually blindly follow what he says instead of what he does....,because they read somewhere that its impossible to time the market....maybe they even read the Bogle quote you cut and pasted above.....
CraigTester
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Re: Market timers thread

Post by CraigTester »

corn18 wrote: Fri Apr 19, 2019 10:48 pm
CraigTester wrote: Fri Apr 19, 2019 10:37 pm
corn18 wrote: Fri Apr 19, 2019 4:17 pm
CraigTester wrote: Fri Apr 19, 2019 2:38 pm OP -- I just noticed your topic and am chuckling over the predictable responses.

As you are finding, there are about a half dozen or so self appointed "guardians" of this board that absolutely refuse to believe that its possible to time the market.

And more importantly, they seem to feel it is their duty to immediately shut down any discussion to the contrary.

I suppose this is either because they actually "believe" they are protecting the "naive" from being fooled...., or perhaps more ominously, they are concerned that they are already on public record for taking sides on an issue where they are wrong.

No matter, it is absolutely possible to time the market. I've been doing it successfully for over 20 years and folks like Warren Buffett have been doing it for over 50.

A long list of others have also found success, but the last thing any of them are going to do is explain how they do it on an internet chat board.

This is not because they are "selfish" necessarily, but rather, if they explained things well enough that others could copy, their own ability to find success would be hindered.

But the good news in all this is that the Boglehead buy-n-hold method is not terrible. Its very easy to follow and with the exception of enduring gut wrenching periods of extended losses, does ultimately provide a decent long term return.

Given all this, I fear you will find it impossible to generate the type of conversation you are seeking on this platform.

But I do encourage you to keep doing your homework. And if you ever do figure out how to do it, maybe you can be the first to publicly spill the beans.

Best of luck,

Craigtester
You seem flummoxed by the response to a market timing thread in a boglehead forum. Maybe you could show me the page in the wiki that explains how bogleheads time the market. It's not congruent with the boglehead philosophy so why be surprised with the pushback?

And congratulations on the I'm smarter than ya'll approach to making friends and influencing people. My kids like to play I have a secret, too.
Corn18

Ask yourself why you feel it necessary to lash out at a complete stranger on the internet who simply confirms that there are other ways to cross the bridge.

Why does it make you angry for someone to simply confirm that yes, market timing is not only possible, but is happening successfully every day?

Don't you see that this really shouldn't have any bearing on your decision to choose buy-n-hold..., IF you're happy with it?

But perhaps here lies the source of your anger.

I know I certainly wouldn't be happy being told that the "only" investment option I'm "allowed" to consider is one that guarantees I will lose 30%, 50%, 60% of my net worth during the next crash....

Why not join in the OP's attempt at a starting an intelligent discussion rather than just repeating the tired chorus?

Craigtester
Are you saying all bogleheads are lemmings, unable to choose a path but simply blindly follow the wiki bible? Sure, nice thought. What the real truth is we tried the rest and now go with the best. You perceive this as ignorance or hubris. Good for you.
Not all of them.....and these are the folks that the OP was trying to enlist in this conversation....and they are also the people I was hoping to meet by dropping in....
anoop
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Re: Market timers thread

Post by anoop »

market timer wrote: Fri Apr 19, 2019 11:17 pm If we have a recession in the next year or two, my guess is it will look like the 2001 recession. That was a shallow recession, but we still experienced fairly severe losses in equities, particularly in technology stocks. I see similarities between the money losing dot-com IPOs of the late 1990s and the typically money losing platform IPOs today (e.g., Lyft, Uber, Airbnb, Pinterest, Slack).
The fed caused both the bubble and the subsequent crash (with dotcom). This time around, it felt like they were trying to crash it in slow motion, but they decided to put that plan on pause. So onward and upward it is for now.
market timer wrote: Fri Apr 19, 2019 11:17 pm Funny things happen when investors are willing to overlook yawning losses in the hope of profitability to emerge someday in the future. Companies discount their products and services below cost to get volume. Truly enormous sums of advertising dollars are poured into Google and Facebook. Starting compensation for 21-year-old CS grads is bid up to over $200K. Housing affordability in tech centers like San Francisco defies logic. I am quite certain that all these trends will end in the next few years. That is to say, if investors become somewhat more skeptical of the business models of companies that have only demonstrated an ability to lose money and raise capital, we could see ripple effects in safer assets, economic activity, and jobs. However, I believe this will be concentrated in tech, similar to 2001.
The game has already gone on for much longer than I thought it could, so much so that this feels like the new normal. I have a friend that is convinced that he must buy a house right now or forever be priced out, especially with the slew of IPOs happening now.
market timer wrote: Fri Apr 19, 2019 11:17 pm The far more pessimistic scenario for me (from an asset pricing perspective) involves fiscal imbalances reaching a breaking point, rising populism leading to meaningful policy changes, and inflation. The economy is so leveraged today that a return to moderately high inflation and interest rates would be devastating.
This is precisely the reason why the fed will not allow a crash to happen. At any sign of a correction they will start using every tool available to them to prop up asset prices. There are so many imbalances in every area of the economy now, it's like cancer patient taking (and cannot function without) alternate chemo and transfusions. Well right now, the fed has decided they cannot stop giving the patient transfusion or the patient might collapse. There is no more free market.

But all of this is good for stocks and real-estate and will continue to be good for both.
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Re: Market timers thread

Post by 123 »

Buy low, sell high.
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Re: Market timers thread

Post by jbranx »

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Re: Market timers thread

Post by market timer »

anoop wrote: Fri Apr 19, 2019 11:29 pmThere are so many imbalances in every area of the economy now, it's like cancer patient taking (and cannot function without) alternate chemo and transfusions.
I'm an adherent of Herbert Stein's Law (father of Ben): "If something cannot go on forever, it will stop."
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Re: Market timers thread

Post by anoop »

market timer wrote: Fri Apr 19, 2019 11:34 pm I'm an adherent of Herbert Stein's Law (father of Ben): "If something cannot go on forever, it will stop."
There is no proof that this cannot go on forever. Look at Japan. They have a couple of decades more experience with this and are leading the way for us. Whatever is going on can easily outlive me, so in that sense it will have gone on forever.
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Re: Market timers thread

Post by Mountain Doc »

CraigTester wrote: Fri Apr 19, 2019 10:37 pm Why does it make you angry for someone to simply confirm that yes, market timing is not only possible, but is happening successfully every day?
People also win at blackjack every day, but that doesn't make it a wise strategy. Market timing can be successful, but the data suggest the odds are against those who try.

Outcomes should not be confused with strategy.
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Re: Market timers thread

Post by DonIce »

CraigTester wrote: Fri Apr 19, 2019 11:22 pm Buffett already did this.....and currently has record levels of cash, $100B, sitting in dry powder....

Although you'll often hear him tell everyone else they should just buy-n-hold an SP500 index fund, independent of valuation levels.....

And some people actually blindly follow what he says instead of what he does....,because they read somewhere that its impossible to time the market....maybe they even read the Bogle quote you cut and pasted above.....
I would argue that Buffett's main talent was picking good companies, acquiring them (or big chunks of them), and enabling them to grow to their full potential. Not market timing.
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Re: Market timers thread

Post by anoop »

DonIce wrote: Fri Apr 19, 2019 11:48 pm
CraigTester wrote: Fri Apr 19, 2019 11:22 pm Buffett already did this.....and currently has record levels of cash, $100B, sitting in dry powder....

Although you'll often hear him tell everyone else they should just buy-n-hold an SP500 index fund, independent of valuation levels.....

And some people actually blindly follow what he says instead of what he does....,because they read somewhere that its impossible to time the market....maybe they even read the Bogle quote you cut and pasted above.....
I would argue that Buffett's main talent was picking good companies, acquiring them (or big chunks of them), and enabling them to grow to their full potential. Not market timing.
Pretty sure it doesn't hurt that he has friends in high places that allow him to place bets like investing in GS in the throes of the financial crises. Average investor doesn't have access to that kind of opportunity or information.
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Re: Market timers thread

Post by dogagility »

DonIce wrote: Fri Apr 19, 2019 11:48 pm
CraigTester wrote: Fri Apr 19, 2019 11:22 pm Buffett already did this.....and currently has record levels of cash, $100B, sitting in dry powder....

Although you'll often hear him tell everyone else they should just buy-n-hold an SP500 index fund, independent of valuation levels.....

And some people actually blindly follow what he says instead of what he does....,because they read somewhere that its impossible to time the market....maybe they even read the Bogle quote you cut and pasted above.....
I would argue that Buffett's main talent was picking good companies, acquiring them (or big chunks of them), and enabling them to grow to their full potential. Not market timing.
Bingo. This is how Buffet makes money investing: http://money.com/money/4466517/warren-b ... cal-stock/. Not a strategy available to the average investor.
All children spill milk. Learn to smile and wipe it up. -- A Farmer's Wife
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Re: Market timers thread

Post by CraigTester »

dogagility wrote: Sat Apr 20, 2019 6:53 am
DonIce wrote: Fri Apr 19, 2019 11:48 pm
CraigTester wrote: Fri Apr 19, 2019 11:22 pm Buffett already did this.....and currently has record levels of cash, $100B, sitting in dry powder....

Although you'll often hear him tell everyone else they should just buy-n-hold an SP500 index fund, independent of valuation levels.....

And some people actually blindly follow what he says instead of what he does....,because they read somewhere that its impossible to time the market....maybe they even read the Bogle quote you cut and pasted above.....
I would argue that Buffett's main talent was picking good companies, acquiring them (or big chunks of them), and enabling them to grow to their full potential. Not market timing.
Bingo. This is how Buffet makes money investing: http://money.com/money/4466517/warren-b ... cal-stock/. Not a strategy available to the average investor.
Well you are half right. He does work pretty hard to only buy wonderful companies....,but you are forgetting that he will only buy them at a “fair” price. AKA “market timing”.

This is why he is is currently sitting on $100B of dry powder. Plenty of wonderful companies available but he is waiting for a better price.

He calls this “time arbitrage”. I call it “market timing”. And bogleheads call it “impossible”.
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Re: Market timers thread

Post by CraigTester »

Mountain Doc wrote: Fri Apr 19, 2019 11:46 pm
CraigTester wrote: Fri Apr 19, 2019 10:37 pm Why does it make you angry for someone to simply confirm that yes, market timing is not only possible, but is happening successfully every day?
People also win at blackjack every day, but that doesn't make it a wise strategy. Market timing can be successful, but the data suggest the odds are against those who try.

Outcomes should not be confused with strategy.
Did you ever see the movie about the MIT students that made a ton of money counting cards?

I really don’t like the analogy but even blackjack can be profitable for those who do their homework.
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Re: Market timers thread

Post by corn18 »

CraigTester wrote: Sat Apr 20, 2019 7:50 am
dogagility wrote: Sat Apr 20, 2019 6:53 am
DonIce wrote: Fri Apr 19, 2019 11:48 pm
CraigTester wrote: Fri Apr 19, 2019 11:22 pm Buffett already did this.....and currently has record levels of cash, $100B, sitting in dry powder....

Although you'll often hear him tell everyone else they should just buy-n-hold an SP500 index fund, independent of valuation levels.....

And some people actually blindly follow what he says instead of what he does....,because they read somewhere that its impossible to time the market....maybe they even read the Bogle quote you cut and pasted above.....
I would argue that Buffett's main talent was picking good companies, acquiring them (or big chunks of them), and enabling them to grow to their full potential. Not market timing.
Bingo. This is how Buffet makes money investing: http://money.com/money/4466517/warren-b ... cal-stock/. Not a strategy available to the average investor.
Well you are half right. He does work pretty hard to only buy wonderful companies....,but you are forgetting that he will only buy them at a “fair” price. AKA “market timing”.

This is why he is is currently sitting on $100B of dry powder. Plenty of wonderful companies available but he is waiting for a better price.

He calls this “time arbitrage”. I call it “market timing”. And bogleheads call it “impossible”.
Bogleheads do not call what Warren Buffet does impossible. You are trying to project that. I think it is stupid to sell stocks right now because you think the market is going to tank. I think it is stupid to sit on dry powder because you think the market is going to tank. UNLESS you have won the game like Warren Buffet. Then you can do whatever you want. Warren Buffet has won the game. He can sit on as much dry powder waiting for value as he wants. Someone with 50x expenses can do the same. Someone saving to reach FI should not try to time the market.

But, I will say that your posts have motivated me to log onto Motley Fool and stir up a ruckus by posting how superior index investing is to stock picking. But I just want to open their minds.
Don't do something, just stand there!
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Re: Market timers thread

Post by Tycoon »

Raising children taught me that sometimes it is best to just sit back and watch. The mistakes they made on their own taught them faster than the advice I was giving them. When they were young I would measure possible outcomes and if an emergency room wasn't one of them I would watch them learn the hard way. I only wish I was as smart as I thought I was when my parents were watching me.
Emotionless, prognostication free investing. Ignoring the noise and economists since 1979. Getting rich off of "smart people's" behavioral mistakes.
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Re: Market timers thread

Post by CraigTester »

anoop wrote: Fri Apr 19, 2019 11:51 pm
DonIce wrote: Fri Apr 19, 2019 11:48 pm
CraigTester wrote: Fri Apr 19, 2019 11:22 pm Buffett already did this.....and currently has record levels of cash, $100B, sitting in dry powder....

Although you'll often hear him tell everyone else they should just buy-n-hold an SP500 index fund, independent of valuation levels.....

And some people actually blindly follow what he says instead of what he does....,because they read somewhere that its impossible to time the market....maybe they even read the Bogle quote you cut and pasted above.....
I would argue that Buffett's main talent was picking good companies, acquiring them (or big chunks of them), and enabling them to grow to their full potential. Not market timing.
Pretty sure it doesn't hurt that he has friends in high places that allow him to place bets like investing in GS in the throes of the financial crises. Average investor doesn't have access to that kind of opportunity or information.
Yes, he certainly has some advantages when it comes to being connected.

However he also had the intelligence to build up a huge pile of dry powder BEFORE the last meltdown. This is what put him in the position to be able to do things like buying GS at a very attractive price.
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Re: Market timers thread

Post by MNGopher »

CraigTester wrote: Sat Apr 20, 2019 7:59 am
Mountain Doc wrote: Fri Apr 19, 2019 11:46 pm
CraigTester wrote: Fri Apr 19, 2019 10:37 pm Why does it make you angry for someone to simply confirm that yes, market timing is not only possible, but is happening successfully every day?
People also win at blackjack every day, but that doesn't make it a wise strategy. Market timing can be successful, but the data suggest the odds are against those who try.

Outcomes should not be confused with strategy.
Did you ever see the movie about the MIT students that made a ton of money counting cards?

I really don’t like the analogy but even blackjack can be profitable for those who do their homework.
Going to the casino with a "system" is akin to market timing and active trading. Some will come out ahead by pure luck, but most won't. Passive indexing is like owning stock in the casino. I know which path I like.
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Re: Market timers thread

Post by CraigTester »

corn18 wrote: Sat Apr 20, 2019 8:05 am
CraigTester wrote: Sat Apr 20, 2019 7:50 am
dogagility wrote: Sat Apr 20, 2019 6:53 am
DonIce wrote: Fri Apr 19, 2019 11:48 pm
CraigTester wrote: Fri Apr 19, 2019 11:22 pm Buffett already did this.....and currently has record levels of cash, $100B, sitting in dry powder....

Although you'll often hear him tell everyone else they should just buy-n-hold an SP500 index fund, independent of valuation levels.....

And some people actually blindly follow what he says instead of what he does....,because they read somewhere that its impossible to time the market....maybe they even read the Bogle quote you cut and pasted above.....
I would argue that Buffett's main talent was picking good companies, acquiring them (or big chunks of them), and enabling them to grow to their full potential. Not market timing.
Bingo. This is how Buffet makes money investing: http://money.com/money/4466517/warren-b ... cal-stock/. Not a strategy available to the average investor.
Well you are half right. He does work pretty hard to only buy wonderful companies....,but you are forgetting that he will only buy them at a “fair” price. AKA “market timing”.

This is why he is is currently sitting on $100B of dry powder. Plenty of wonderful companies available but he is waiting for a better price.

He calls this “time arbitrage”. I call it “market timing”. And bogleheads call it “impossible”.
Bogleheads do not call what Warren Buffet does impossible. You are trying to project that. I think it is stupid to sell stocks right now because you think the market is going to tank. I think it is stupid to sit on dry powder because you think the market is going to tank. UNLESS you have won the game like Warren Buffet. Then you can do whatever you want. Warren Buffet has won the game. He can sit on as much dry powder waiting for value as he wants. Someone with 50x expenses can do the same. Someone saving to reach FI should not try to time the market.

But, I will say that your posts have motivated me to log onto Motley Fool and stir up a ruckus by posting how superior index investing is to stock picking. But I just want to open their minds.
Interesting logic.

Buffett has been building up dry powder as markets got overvalued his entire life.

And this pattern is what put him in position to swoop in and capture all those great prices after there was blood in the streets.

He even did this BEFORE he won the game.

Are you he saying he was “stupid” to do this early in his career? (Before he had won).

I would argue this “stupid” behavior is precisely HOW he eventually won the game.
CraigTester
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Re: Market timers thread

Post by CraigTester »

MNGopher wrote: Sat Apr 20, 2019 8:49 am
CraigTester wrote: Sat Apr 20, 2019 7:59 am
Mountain Doc wrote: Fri Apr 19, 2019 11:46 pm
CraigTester wrote: Fri Apr 19, 2019 10:37 pm Why does it make you angry for someone to simply confirm that yes, market timing is not only possible, but is happening successfully every day?
People also win at blackjack every day, but that doesn't make it a wise strategy. Market timing can be successful, but the data suggest the odds are against those who try.

Outcomes should not be confused with strategy.
Did you ever see the movie about the MIT students that made a ton of money counting cards?

I really don’t like the analogy but even blackjack can be profitable for those who do their homework.
Going to the casino with a "system" is akin to market timing and active trading. Some will come out ahead by pure luck, but most won't. Passive indexing is like owning stock in the casino. I know which path I like.
I’m ok with investing in Casinos. Just as long as you buy them at a fair price. (Which requires good timing)
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dogagility
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Re: Market timers thread

Post by dogagility »

CraigTester wrote: Sat Apr 20, 2019 7:50 am
dogagility wrote: Sat Apr 20, 2019 6:53 am
DonIce wrote: Fri Apr 19, 2019 11:48 pm
CraigTester wrote: Fri Apr 19, 2019 11:22 pm Buffett already did this.....and currently has record levels of cash, $100B, sitting in dry powder....

Although you'll often hear him tell everyone else they should just buy-n-hold an SP500 index fund, independent of valuation levels.....

And some people actually blindly follow what he says instead of what he does....,because they read somewhere that its impossible to time the market....maybe they even read the Bogle quote you cut and pasted above.....
I would argue that Buffett's main talent was picking good companies, acquiring them (or big chunks of them), and enabling them to grow to their full potential. Not market timing.
Bingo. This is how Buffet makes money investing: http://money.com/money/4466517/warren-b ... cal-stock/. Not a strategy available to the average investor.
Well you are half right. He does work pretty hard to only buy wonderful companies....,but you are forgetting that he will only buy them at a “fair” price. AKA “market timing”.

This is why he is is currently sitting on $100B of dry powder. Plenty of wonderful companies available but he is waiting for a better price.

He calls this “time arbitrage”. I call it “market timing”. And bogleheads call it “impossible”.
Bogleheads do something similar called rebalancing to maintain an asset allocation. No thinking required. Anybody can do it. This is a feature, not a bug, of the method.

Bogleheads do not change their asset allocation because of a perceived market value. I would say Buffet can identify value (and loan companies money in exchange for preferred stock) because he has access to inside company knowledge. Average investors do not have this access nor the money to secure such a deal.
All children spill milk. Learn to smile and wipe it up. -- A Farmer's Wife
CraigTester
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Re: Market timers thread

Post by CraigTester »

dogagility wrote: Sat Apr 20, 2019 12:38 pm
CraigTester wrote: Sat Apr 20, 2019 7:50 am
dogagility wrote: Sat Apr 20, 2019 6:53 am
DonIce wrote: Fri Apr 19, 2019 11:48 pm
CraigTester wrote: Fri Apr 19, 2019 11:22 pm Buffett already did this.....and currently has record levels of cash, $100B, sitting in dry powder....

Although you'll often hear him tell everyone else they should just buy-n-hold an SP500 index fund, independent of valuation levels.....

And some people actually blindly follow what he says instead of what he does....,because they read somewhere that its impossible to time the market....maybe they even read the Bogle quote you cut and pasted above.....
I would argue that Buffett's main talent was picking good companies, acquiring them (or big chunks of them), and enabling them to grow to their full potential. Not market timing.
Bingo. This is how Buffet makes money investing: http://money.com/money/4466517/warren-b ... cal-stock/. Not a strategy available to the average investor.
Well you are half right. He does work pretty hard to only buy wonderful companies....,but you are forgetting that he will only buy them at a “fair” price. AKA “market timing”.

This is why he is is currently sitting on $100B of dry powder. Plenty of wonderful companies available but he is waiting for a better price.

He calls this “time arbitrage”. I call it “market timing”. And bogleheads call it “impossible”.
Bogleheads do something similar called rebalancing to maintain an asset allocation. No thinking required. Anybody can do it. This is a feature, not a bug, of the method.

Bogleheads do not change their asset allocation because of a perceived market value. I would say Buffet can identify value (and loan companies money in exchange for preferred stock) because he has access to inside company knowledge. Average investors do not have this access nor the money to secure such a deal.
If you are happy with a scheme that guarantees you will lose 30%, 50%, 60% of your total net worth during the next downturn, you are hanging out in the right forum.

And if convincing yourself that your choice of rebalancing schedule will somehow magically save you from exposure to multi year losses, then you are definitely a Bogle head - which is fine.

You’ve got a whole echo chamber here to confirm your beliefs.

However, if you noticed the title of this particular thread, “market timers thread”, this is an attempt by the OP to create a “safe space” to acknowledge that just maybe there is another way to skin the cat.

However, for whatever reason, despite all the glaring evidence to the contrary, the self appointed guardians of this forum, immediately slap down anyone daring to point out that the earth is round.
long_gamma
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Re: Market timers thread

Post by long_gamma »

It is easy to avoid self appointed guardians here. You just have to mention code words such as "3 funds", "nobody knows nuthin" some where in the message
"Everyone has a plan 'till they get punched in the mouth." --Mike Tyson
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corn18
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Re: Market timers thread

Post by corn18 »

CraigTester wrote: Sat Apr 20, 2019 1:02 pm
dogagility wrote: Sat Apr 20, 2019 12:38 pm
CraigTester wrote: Sat Apr 20, 2019 7:50 am
dogagility wrote: Sat Apr 20, 2019 6:53 am
DonIce wrote: Fri Apr 19, 2019 11:48 pm
I would argue that Buffett's main talent was picking good companies, acquiring them (or big chunks of them), and enabling them to grow to their full potential. Not market timing.
Bingo. This is how Buffet makes money investing: http://money.com/money/4466517/warren-b ... cal-stock/. Not a strategy available to the average investor.
Well you are half right. He does work pretty hard to only buy wonderful companies....,but you are forgetting that he will only buy them at a “fair” price. AKA “market timing”.

This is why he is is currently sitting on $100B of dry powder. Plenty of wonderful companies available but he is waiting for a better price.

He calls this “time arbitrage”. I call it “market timing”. And bogleheads call it “impossible”.
Bogleheads do something similar called rebalancing to maintain an asset allocation. No thinking required. Anybody can do it. This is a feature, not a bug, of the method.

Bogleheads do not change their asset allocation because of a perceived market value. I would say Buffet can identify value (and loan companies money in exchange for preferred stock) because he has access to inside company knowledge. Average investors do not have this access nor the money to secure such a deal.
If you are happy with a scheme that guarantees you will lose 30%, 50%, 60% of your total net worth during the next downturn, you are hanging out in the right forum.

And if convincing yourself that your choice of rebalancing schedule will somehow magically save you from exposure to multi year losses, then you are definitely a Bogle head - which is fine.

You’ve got a whole echo chamber here to confirm your beliefs.

However, if you noticed the title of this particular thread, “market timers thread”, this is an attempt by the OP to create a “safe space” to acknowledge that just maybe there is another way to skin the cat.

However, for whatever reason, despite all the glaring evidence to the contrary, the self appointed guardians of this forum, immediately slap down anyone daring to point out that the earth is round.
Why are you here? Just to stir the pot?
Don't do something, just stand there!
marcopolo
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Re: Market timers thread

Post by marcopolo »

CraigTester wrote: Sat Apr 20, 2019 1:02 pm
dogagility wrote: Sat Apr 20, 2019 12:38 pm
CraigTester wrote: Sat Apr 20, 2019 7:50 am
dogagility wrote: Sat Apr 20, 2019 6:53 am
DonIce wrote: Fri Apr 19, 2019 11:48 pm
I would argue that Buffett's main talent was picking good companies, acquiring them (or big chunks of them), and enabling them to grow to their full potential. Not market timing.
Bingo. This is how Buffet makes money investing: http://money.com/money/4466517/warren-b ... cal-stock/. Not a strategy available to the average investor.
Well you are half right. He does work pretty hard to only buy wonderful companies....,but you are forgetting that he will only buy them at a “fair” price. AKA “market timing”.

This is why he is is currently sitting on $100B of dry powder. Plenty of wonderful companies available but he is waiting for a better price.

He calls this “time arbitrage”. I call it “market timing”. And bogleheads call it “impossible”.
Bogleheads do something similar called rebalancing to maintain an asset allocation. No thinking required. Anybody can do it. This is a feature, not a bug, of the method.

Bogleheads do not change their asset allocation because of a perceived market value. I would say Buffet can identify value (and loan companies money in exchange for preferred stock) because he has access to inside company knowledge. Average investors do not have this access nor the money to secure such a deal.
If you are happy with a scheme that guarantees you will lose 30%, 50%, 60% of your total net worth during the next downturn, you are hanging out in the right forum.

And if convincing yourself that your choice of rebalancing schedule will somehow magically save you from exposure to multi year losses, then you are definitely a Bogle head - which is fine.

You’ve got a whole echo chamber here to confirm your beliefs.

However, if you noticed the title of this particular thread, “market timers thread”, this is an attempt by the OP to create a “safe space” to acknowledge that just maybe there is another way to skin the cat.

However, for whatever reason, despite all the glaring evidence to the contrary, the self appointed guardians of this forum, immediately slap down anyone daring to point out that the earth is round.

I am all for entertaining different perspectives. I agree with you that alternative ideas get shouted down by some.

Having said that, I am curious what you mean by "all the glaring evidence to the contrary".

I would be sincerely interested to see such evidence that is backed up by real analysis and statistical significance.

What you have put forth is a bit chest pounding about your own capabilities, which might be true, but you have not provided any evidence of that, glaring or otherwise, and anecdotal evidence of one statistical outlier. I am sure there are other successful market timers as well. But, where is the evidence that it can be done consistently, over the long run?

I would love to see it, and am open to being convinced. The research I am aware of shows quite the opposite.
Please site your evidence.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Tycoon
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Re: Market timers thread

Post by Tycoon »

CraigTester wrote: Sat Apr 20, 2019 1:02 pm However, for whatever reason, despite all the glaring evidence to the contrary, the self appointed guardians of this forum, immediately slap down anyone daring to point out that the earth is round.
From my point of view you are arguing that the earth is flat.
Emotionless, prognostication free investing. Ignoring the noise and economists since 1979. Getting rich off of "smart people's" behavioral mistakes.
bondsr4me
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Re: Market timers thread

Post by bondsr4me »

DonIce wrote: Fri Apr 19, 2019 11:48 pm
CraigTester wrote: Fri Apr 19, 2019 11:22 pm Buffett already did this.....and currently has record levels of cash, $100B, sitting in dry powder....

Although you'll often hear him tell everyone else they should just buy-n-hold an SP500 index fund, independent of valuation levels.....

And some people actually blindly follow what he says instead of what he does....,because they read somewhere that its impossible to time the market....maybe they even read the Bogle quote you cut and pasted above.....
I would argue that Buffett's main talent was picking good companies, acquiring them (or big chunks of them), and enabling them to grow to their full potential. Not market timing.
+1. Agree with “Buffett’s main talent”.
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corn18
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Re: Market timers thread

Post by corn18 »

marcopolo wrote: Sat Apr 20, 2019 1:31 pm I am all for entertaining different perspectives. I agree with you that alternative ideas get shouted down by some.

Having said that, I am curious what you mean by "all the glaring evidence to the contrary".

I would be sincerely interested to see such evidence that is backed up by real analysis and statistical significance.

What you have put forth is a bit chest pounding about your own capabilities, which might be true, but you have not provided any evidence of that, glaring or otherwise, and anecdotal evidence of one statistical outlier. I am sure there are other successful market timers as well. But, where is the evidence that it can be done consistently, over the long run?

I would love to see it, and am open to being convinced. The research I am aware of shows quite the opposite.
Please site your evidence.
He's already said he can't tell us because then it won't work anymore. Methinks the emperor has no clothes.
Don't do something, just stand there!
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Mountain Doc
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Re: Market timers thread

Post by Mountain Doc »

marcopolo wrote: Sat Apr 20, 2019 1:31 pm I am all for entertaining different perspectives. I agree with you that alternative ideas get shouted down by some.

Having said that, I am curious what you mean by "all the glaring evidence to the contrary".

I would be sincerely interested to see such evidence that is backed up by real analysis and statistical significance.

What you have put forth is a bit chest pounding about your own capabilities, which might be true, but you have not provided any evidence of that, glaring or otherwise, and anecdotal evidence of one statistical outlier. I am sure there are other successful market timers as well. But, where is the evidence that it can be done consistently, over the long run?

I would love to see it, and am open to being convinced. The research I am aware of shows quite the opposite.
Please site your evidence.
Very well said. I couldn’t agree more.
CraigTester
Posts: 115
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Re: Market timers thread

Post by CraigTester »

marcopolo wrote: Sat Apr 20, 2019 1:31 pm
CraigTester wrote: Sat Apr 20, 2019 1:02 pm
dogagility wrote: Sat Apr 20, 2019 12:38 pm
CraigTester wrote: Sat Apr 20, 2019 7:50 am
dogagility wrote: Sat Apr 20, 2019 6:53 am
Bingo. This is how Buffet makes money investing: http://money.com/money/4466517/warren-b ... cal-stock/. Not a strategy available to the average investor.
Well you are half right. He does work pretty hard to only buy wonderful companies....,but you are forgetting that he will only buy them at a “fair” price. AKA “market timing”.

This is why he is is currently sitting on $100B of dry powder. Plenty of wonderful companies available but he is waiting for a better price.

He calls this “time arbitrage”. I call it “market timing”. And bogleheads call it “impossible”.
Bogleheads do something similar called rebalancing to maintain an asset allocation. No thinking required. Anybody can do it. This is a feature, not a bug, of the method.

Bogleheads do not change their asset allocation because of a perceived market value. I would say Buffet can identify value (and loan companies money in exchange for preferred stock) because he has access to inside company knowledge. Average investors do not have this access nor the money to secure such a deal.
If you are happy with a scheme that guarantees you will lose 30%, 50%, 60% of your total net worth during the next downturn, you are hanging out in the right forum.

And if convincing yourself that your choice of rebalancing schedule will somehow magically save you from exposure to multi year losses, then you are definitely a Bogle head - which is fine.

You’ve got a whole echo chamber here to confirm your beliefs.

However, if you noticed the title of this particular thread, “market timers thread”, this is an attempt by the OP to create a “safe space” to acknowledge that just maybe there is another way to skin the cat.

However, for whatever reason, despite all the glaring evidence to the contrary, the self appointed guardians of this forum, immediately slap down anyone daring to point out that the earth is round.

I am all for entertaining different perspectives. I agree with you that alternative ideas get shouted down by some.

Having said that, I am curious what you mean by "all the glaring evidence to the contrary".

I would be sincerely interested to see such evidence that is backed up by real analysis and statistical significance.

What you have put forth is a bit chest pounding about your own capabilities, which might be true, but you have not provided any evidence of that, glaring or otherwise, and anecdotal evidence of one statistical outlier. I am sure there are other successful market timers as well. But, where is the evidence that it can be done consistently, over the long run?

I would love to see it, and am open to being convinced. The research I am aware of shows quite the opposite.
Please site your evidence.
Unfortunately there is no free lunch. You really do have to do your own homework.

And the best way to start is to create a forum of people open to the possibility that it’s possible.

Now, if this makes your head hurt, that’s fine. As pointed out above, a positive trait of the Boglehead method is that you don’t have to think.

And if that works for you, that’s fine.

But there must be a reason (other than “enforcement”) that you (or at least someone here) clicked on a thread called “market timers thread”..
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