U.S. stocks in freefall

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livesoft
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Re: U.S. stocks in freefall

Postby livesoft » Tue Aug 25, 2015 5:59 pm

grap0013 wrote:You cannot make these claims retrospectively. They hold no water.

Yep. I claimed I sold this morning in this post: viewtopic.php?p=2600976#p2600976 Well, it was more than a claim since it is absolutely true.

But I'm thinking you mean "retroactively", too.
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lawlopez
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Re: U.S. stocks in freefall

Postby lawlopez » Tue Aug 25, 2015 6:08 pm

Gee, I started on the other end of the thread (2011 !!!) and didn't realize it.

it was horrible, horrible, but in hind sight I did ok !!!

Jcraz13
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Re: U.S. stocks in freefall

Postby Jcraz13 » Tue Aug 25, 2015 6:12 pm

I think this thread has run its course . Too many different tangents .

BahamaMan
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Re: U.S. stocks in freefall

Postby BahamaMan » Tue Aug 25, 2015 6:23 pm

DaftInvestor wrote:My question is why are all the market timers landing here in the bogleheads forum? There are countless stock picking message boards where folks spend all day discussing their market timing speculations....


Completely agree! It's like someone bragging that they gained 100 pounds on a Weight Loss forum! :mrgreen:

Thebigc
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Re: U.S. stocks in freefall

Postby Thebigc » Tue Aug 25, 2015 6:27 pm

Uncle Pennybags wrote:
Thebigc wrote:And rally off, 600 point negative swing.
That shown traders don't have a clue. Not a one lost money though.
broadstone wrote:I went 100% cash several weeks ago as I have friends who work the financial markets in Hong Kong who had warned me about the China signs.
OK, I agree those with inside information can market time. I'm not an insider so I'll stick with indexing.


It was a pickoff, but you know who that was selliing at the close? It was mutual fund holders, their buy and sell orders come in at the end of the day. I may have been the only person buying in the last 60 seconds of the market, got my little order in with 30 or seconds to spare. Buy the time their orders came in they must of taken a nice little hit.

UHCOP
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Re: U.S. stocks in freefall

Postby UHCOP » Tue Aug 25, 2015 6:29 pm

Was checking out how berkshire is doing today and saw Share A dropped -0.92 vs -1.37 for B, I thought they track the same holdings, any explanation? Thanks

Thebigc
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Re: U.S. stocks in freefall

Postby Thebigc » Tue Aug 25, 2015 7:17 pm

UHCOP wrote:Was checking out how berkshire is doing today and saw Share A dropped -0.92 vs -1.37 for B, I thought they track the same holdings, any explanation? Thanks


Yeah while BabyB's are suppose to represent the same underlying value as class A it does not always work out that way.

"The floor manger for the Berkshire shares on the trading floor works to keep one Class B share = 1/1500th of a class A share. It is not always a perfect 1/1500th but it is often very close."

It's tough because while they should represent the value of the company holdings, BRK A, actually is where the majority of the money is. There are just different amounts of money in the two and it's not always easy to get them to match up, sometimes the conversion is under 1500 and sometimes it's over 1500. Ricght now it's at like 1556 or something.

broadstone
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Re: U.S. stocks in freefall

Postby broadstone » Tue Aug 25, 2015 9:56 pm

oneleaf wrote:We really need a thread dedicated to market timers' predictions made at the time the decision was made. These after-the-fact claims are getting old.


These claims may be old but they are true. I wrote on Aug 12th about this "correction". I don't understand why the board turns salty when people make educated decisions that happens to coincide with obvious red flag warning signs that are staring us right in our faces. The economy / financial markets could not sustain at those bullish levels, especially with our debt levels which are out of control. Personally I believe this is only the beginning of some very turbulent times. I just feel sorry for the retirees.

Jozxyqk
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Re: U.S. stocks in freefall

Postby Jozxyqk » Tue Aug 25, 2015 10:26 pm

broadstone wrote:
oneleaf wrote:We really need a thread dedicated to market timers' predictions made at the time the decision was made. These after-the-fact claims are getting old.


These claims may be old but they are true. I wrote on Aug 12th about this "correction". I don't understand why the board turns salty when people make educated decisions that happens to coincide with obvious red flag warning signs that are staring us right in our faces. The economy / financial markets could not sustain at those bullish levels, especially with our debt levels which are out of control. Personally I believe this is only the beginning of some very turbulent times. I just feel sorry for the retirees.


Please, then, start up a new thread that tells us when to get back in (ever? when the national debt is paid down?)! We'll see if your prediction beats my plan of continuing to DCA every paycheck.

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Uncle Pennybags
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Re: U.S. stocks in freefall

Postby Uncle Pennybags » Tue Aug 25, 2015 10:52 pm

Thebigc wrote:you know who that was selliing at the close? It was mutual fund holders
The reason mutual mutual funds keep cash is so they don't have to sell securities, they try to swap shares internally. If you read the fine print a fund doesn't have give you cash if you sell; they can give you the securities. Mutual funds have rules in place to keep churn and taxes down. That is for regular funds. I assume ETF have some safeguards too.

Browser wrote:The Dip Buyers must have whiplash.
We are broke until the 3ed of the month. I'll be back.

DaftInvestor wrote:My question is why are all the market timers landing here in the bogleheads forum? There are countless stock picking message boards where folks spend all day discussing their market timing speculations....
Some posters are money changers hustling something. They know where the money is and like the predatory animals they are they can't stay away.

Jcraz13 wrote:I think this thread has run its course . Too many different tangents .
This is a joke thread is it not?

FedGuy
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Re: U.S. stocks in freefall

Postby FedGuy » Tue Aug 25, 2015 11:02 pm

I admit it: I tried to time the market, sort of. I've been holding an oversized cash position for a while now, partially as a conservative emergency fund but largely in anticipation of using it as a down payment on a new home in the next year or two. While I've continued investing in equities in my retirement accounts, it's been a while since I bought any equities in my taxable accounts, and for several months I've been giving idle thought to investing some more of my cash. The market declines in the last few days were the kick in the pants that I needed. Yesterday I initiated a transfer of some money--not a lot, but some--from my bank to my brokerage, which wouldn't be complete until today.

It hit my brokerage account this morning, so I went ahead and bought the total market fund and the international equities fund, knowing that they wouldn't settle until after today's close. I had told a colleague yesterday what I was doing, adding that my luck being what it is, there was very likely to be a rally today and I'd end up buying more expensive funds. He and I were actually joking today as the market showed solid gains; I even said "You're welcome!" for the rally.

I watched, fascinated, as the market declined towards the close. I don't know what will happen tomorrow, but I'm glad that I got a little more equity exposure and pleased that the market didn't skyrocket while I was waiting for my order to fill. I have no immediate plans to buy any more (and certainly no plans to sell).

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Uncle Pennybags
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Re: U.S. stocks in freefall

Postby Uncle Pennybags » Tue Aug 25, 2015 11:03 pm

broadstone wrote:These claims may be old but they are true. I wrote on Aug 12th about this "correction".
Where? Start a thread with your predictions, I can't wait.

island
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Re: U.S. stocks in freefall

Postby island » Tue Aug 25, 2015 11:11 pm

lawlopez wrote:Gee, I started on the other end of the thread (2011 !!!) and didn't realize it.

it was horrible, horrible, but in hind sight I did ok !!!


Yes you started it and I believe you can end it if you ask the moderators to put it out of its misery. Yes please do!

stlutz
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Re: U.S. stocks in freefall

Postby stlutz » Tue Aug 25, 2015 11:13 pm

Actually, whenever I see this thread get bumped I'm reminded that I do miss LBill's posts...

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Uncle Pennybags
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Re: U.S. stocks in freefall

Postby Uncle Pennybags » Tue Aug 25, 2015 11:14 pm

island wrote:
lawlopez wrote:Gee, I started on the other end of the thread (2011 !!!) and didn't realize it.

it was horrible, horrible, but in hind sight I did ok !!!


Yes you started it and I believe you can end it if you ask the moderators to put it out of its misery. Yes please do!

Why? This is the only thing worth reading.

yukon50
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Re: U.S. stocks in freefall

Postby yukon50 » Tue Aug 25, 2015 11:39 pm

broadstone wrote:I went 100% cash several weeks ago as I have friends who work the financial markets in Hong Kong who had warned me about the China signs. I thought the worse that happens is I hop out and hop back in if it turned out to be noise about nothing. Well, I haven't bought back in yet. Turns out these financial guys do know things us common folks don't. I think this landslide has some legs.


You should read posts by LBill from 2011. He sang a similar tune as you. He was also really confident.

Will you still be around if the Dow hits 20k in one year?

(SP closed at 1867 and the Dow closed at 15666 today)

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walletless
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Re: U.S. stocks in freefall

Postby walletless » Wed Aug 26, 2015 12:55 am

Either do TLH or buy some more stocks or rebalance your portfolio or do nothing.... but please -- don't sell to lock in your losses!

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HomerJ
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Re: U.S. stocks in freefall

Postby HomerJ » Wed Aug 26, 2015 1:07 am

broadstone wrote:I don't understand why the board turns salty when people make educated decisions that happens to coincide with obvious red flag warning signs that are staring us right in our faces. The economy / financial markets could not sustain at those bullish levels, especially with our debt levels which are out of control. Personally I believe this is only the beginning of some very turbulent times. I just feel sorry for the retirees.


We turn salty because we've seen this EXACT same post numerous times over the years. "obvious red flag warning signs". We see that written every couple of months.

We've seen numerous 5%-10% drops, followed almost immediately by people claiming "Oh I went 100% cash last month. It was obvious this market could not sustain these levels. There were obvious red flag warning signs."

They ALWAYS got a out "a month ago" too... It was never "6 months ago".

We saw those posts at DOW 13,000 and at DOW 14,000 and at DOW 15,000 and at DOW 16,000, etc., etc., etc.

And then every time, the market would head north again, and those posters would disappear, never to post again.

I'm betting you would have disappeared too, but you may be the lucky one... Sooner or later, someone who claimed "obvious red flag warning signs" would be right...

We'll see...

Tell us when it's obvious to get back in. And NOT a month after the market is up 10%... "Oh, I went 100% stocks a month ago... It was obviously time to get back in... Didn't you guys see it?"

Get these calls right 2-3 times in row (both getting out and back in), and I may buy your newsletter.

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dbCooperAir
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Re: U.S. stocks in freefall

Postby dbCooperAir » Wed Aug 26, 2015 8:31 am

1/2 hour until todays open, just for some fun who wants to guess what happens today?

I predict the market will get more news coverage if it goes down compared to if it goes up :wink:
Neither a wise man nor a brave man lies down on the tracks of history to wait for the train of the future to run over him. | -Dwight D. Eisenhower-

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Uncle Pennybags
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Re: U.S. stocks in freefall

Postby Uncle Pennybags » Wed Aug 26, 2015 8:44 am

Who else deployed their dry powder at the open. Let the good times roll. Now who can tell me when to go "ALL CASH" again? :greedy

BahamaMan
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Re: U.S. stocks in freefall

Postby BahamaMan » Wed Aug 26, 2015 8:50 am

Uncle Pennybags wrote:Who else deployed their dry powder at the open. Let the good times roll. Now who can tell me when to go "ALL CASH" again? :greedy


I say when you hit age 95, it is safe to go "ALL CASH"..... Screw the Age in Bonds Rule !

broadstone
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Re: U.S. stocks in freefall

Postby broadstone » Wed Aug 26, 2015 8:52 am

Uncle Pennybags wrote:
broadstone wrote:These claims may be old but they are true. I wrote on Aug 12th about this "correction".
Where? Start a thread with your predictions, I can't wait.


Here :D :

https://www.bogleheads.org/forum/viewtopic.php?f=10&t=80065&start=1400

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Uncle Pennybags
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Re: U.S. stocks in freefall

Postby Uncle Pennybags » Wed Aug 26, 2015 8:59 am

broadstone wrote:
Uncle Pennybags wrote:
broadstone wrote:These claims may be old but they are true. I wrote on Aug 12th about this "correction".
Where? Start a thread with your predictions, I can't wait.


Here :D :

https://www.bogleheads.org/forum/viewtopic.php?f=10&t=80065&start=1400

HUH? That is this thread. Let's keep it simple and easy to find. Start a thread with your market timing advice. What should I do now; buy, sell or hold?

lack_ey
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Re: U.S. stocks in freefall

Postby lack_ey » Wed Aug 26, 2015 9:01 am

To be fair, a lot of the simple trend following market timing models using moving averages (including MA200)—generally where you're invested if current value is above trend and in cash otherwise—would have said to sell on the 20th or so, as noted earlier. Even historically these are a bit late at getting back in at times and sometimes trigger a lot of activity in volatile sideways markets, but that's how it goes. Never mind the fact that a lot of similar heuristics when tested on historical data or in other markets don't do better over the long run, raising plenty of doubts.

Anyway, going by something like that, there is at least a clear signal to jump back in that one could be held accountable to.

broadstone
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Re: U.S. stocks in freefall

Postby broadstone » Wed Aug 26, 2015 9:03 am

HomerJ wrote:
We turn salty because we've seen this EXACT same post numerous times over the years. "obvious red flag warning signs". We see that written every couple of months.

We've seen numerous 5%-10% drops, followed almost immediately by people claiming "Oh I went 100% cash last month. It was obvious this market could not sustain these levels. There were obvious red flag warning signs."

They ALWAYS got a out "a month ago" too... It was never "6 months ago".

We saw those posts at DOW 13,000 and at DOW 14,000 and at DOW 15,000 and at DOW 16,000, etc., etc., etc.

And then every time, the market would head north again, and those posters would disappear, never to post again.

I'm betting you would have disappeared too, but you may be the lucky one... Sooner or later, someone who claimed "obvious red flag warning signs" would be right...

We'll see...

Tell us when it's obvious to get back in. And NOT a month after the market is up 10%... "Oh, I went 100% stocks a month ago... It was obviously time to get back in... Didn't you guys see it?"

Get these calls right 2-3 times in row (both getting out and back in), and I may buy your newsletter.


How many times have we seen the exact same post talking about asset allocations or what funds to invest in or why bonds? Hundreds of posts, over and over and I don't see much negativity thrown towards those people? Negativity breeds from some on here when people post about things the board doesn't agree with. I don't think some Bogleheads are being very open minded to the fact that the theories that were once solid, may not always be applicable as economics do change. With what is going on in the world economically, and especially with the mess the US government has put us in regards to debt, I hope to God it doesn't happen but it's very possible we could experience flat market returns for 10 years, or at the very least extreme volatility due to traders. Please be open minded without the negativity.

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Uncle Pennybags
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Re: U.S. stocks in freefall

Postby Uncle Pennybags » Wed Aug 26, 2015 9:14 am

broadstone wrote: I hope to God it doesn't happen but it's very possible we could experience flat market returns for 10 years, or at the very least extreme volatility due to traders. Please be open minded without the negativity.

"Possible"? We don't want "possible", I can't sell the ranch on a "possible".

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HomerJ
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Re: U.S. stocks in freefall

Postby HomerJ » Wed Aug 26, 2015 9:31 am

broadstone wrote:Negativity breeds from some on here when people post about things the board doesn't agree with. I don't think some Bogleheads are being very open minded to the fact that the theories that were once solid, may not always be applicable as economics do change. With what is going on in the world economically, and especially with the mess the US government has put us in regards to debt, I hope to God it doesn't happen but it's very possible we could experience flat market returns for 10 years, or at the very least extreme volatility due to traders. Please be open minded without the negativity.


That has nothing to do with why I disliked your post.

(1) Your claim is completely unverifiable. You tell us "I got out a month ago", and you state that AFTER the market goes down... If you had posted a month ago, "I just went 100% in cash", you'd have a lot more credibility today.

(2) You're a new poster claiming that market timing is easy.. not possible... EASY... "obvious red flags"

With what is going on in the world economically, and especially with the mess the US government has put us in regards to debt


What happened last month? Did US government debt hit a tipping point for you? Two months ago, it was manageable, one month ago, oh you better go 100% cash... Was there not economic turmoil in the world two months ago? Six months ago?

We may indeed be in for a long bear market or flat market returns... No one here disputes that. We're not blindly assuming the market only goes up. But there are no "obvious red flags" or market timing would be easy for everyone. THAT's what I am disputing in your posts.

By the way, the easiest way for the U.S. government to solve its debt problem is to inflate it away, so I'm not sure you're that safe in "cash", if you really believe U.S. debt is at a tipping point.

autonomy
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Re: U.S. stocks in freefall

Postby autonomy » Wed Aug 26, 2015 9:35 am

broadstone wrote:How many times have we seen the exact same post talking about asset allocations or what funds to invest in or why bonds? Hundreds of posts, over and over and I don't see much negativity thrown towards those people? Negativity breeds from some on here when people post about things the board doesn't agree with. I don't think some Bogleheads are being very open minded to the fact that the theories that were once solid, may not always be applicable as economics do change. With what is going on in the world economically, and especially with the mess the US government has put us in regards to debt, I hope to God it doesn't happen but it's very possible we could experience flat market returns for 10 years, or at the very least extreme volatility due to traders. Please be open minded without the negativity.


Ugh. Are you here to replace UADM? From what I've seen, most of the posters here are very highly educated and open minded and prefer to build up their wealth slowly instead of chasing risky returns. That's what the board is about, asset allocations and bonds, not whichever hot stock is going to shoot up then crash the next day. Yes, everyone here is like-minded, but so are people on the Jeep or real estate forums.
Most of us probably don't go to vegan boards telling them the world is changing and they should start eating meat.

CantPassAgain
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Re: U.S. stocks in freefall

Postby CantPassAgain » Wed Aug 26, 2015 9:38 am

broadstone wrote:
HomerJ wrote:
We turn salty because we've seen this EXACT same post numerous times over the years. "obvious red flag warning signs". We see that written every couple of months.

We've seen numerous 5%-10% drops, followed almost immediately by people claiming "Oh I went 100% cash last month. It was obvious this market could not sustain these levels. There were obvious red flag warning signs."

They ALWAYS got a out "a month ago" too... It was never "6 months ago".

We saw those posts at DOW 13,000 and at DOW 14,000 and at DOW 15,000 and at DOW 16,000, etc., etc., etc.

And then every time, the market would head north again, and those posters would disappear, never to post again.

I'm betting you would have disappeared too, but you may be the lucky one... Sooner or later, someone who claimed "obvious red flag warning signs" would be right...

We'll see...

Tell us when it's obvious to get back in. And NOT a month after the market is up 10%... "Oh, I went 100% stocks a month ago... It was obviously time to get back in... Didn't you guys see it?"

Get these calls right 2-3 times in row (both getting out and back in), and I may buy your newsletter.


How many times have we seen the exact same post talking about asset allocations or what funds to invest in or why bonds? Hundreds of posts, over and over and I don't see much negativity thrown towards those people? Negativity breeds from some on here when people post about things the board doesn't agree with. I don't think some Bogleheads are being very open minded to the fact that the theories that were once solid, may not always be applicable as economics do change. With what is going on in the world economically, and especially with the mess the US government has put us in regards to debt, I hope to God it doesn't happen but it's very possible we could experience flat market returns for 10 years, or at the very least extreme volatility due to traders. Please be open minded without the negativity.


Broadstone,

There is about a 0.1% chance that you went to cash due to your skill in knowing what was going to happen in 30 days time. Face it, you do not have that kind of skill. No one does, unless they have inside information.

The reason your posts are causing so much negativity is because they seem to imply we are all stupid for not seeing this coming. In fact, it is quite the opposite. Most of us see a correction, even a crash, coming. We just don't know exactly when. We know markets are irrational in the short term. So we develop an asset allocation that we can live with in the good times and the bad. I can't count the number of times I have read "set an asset allocation so that if stocks drop 50%, you can still sleep at night." Surely you have seen that mentioned a time or two here?

Developing an investment policy statement, determining an appropriate asset allocation (it is different for everyone), investing when you have the money using the most broadly diversified lowest cost vehicles, and rebalancing when necessary over many years, is a good bet for success. That's what the Bogleheads are all about.

If that's not your bag, that's fine. But it begs the question, why are you here? There are plenty of other forums where market timing is encouraged and everyone freely gloats about their good trades (and most don't mention the bad ones).

miles monroe
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Re: U.S. stocks in freefall

Postby miles monroe » Wed Aug 26, 2015 9:45 am

where did all the BABA touts go?

Browser
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Re: U.S. stocks in freefall

Postby Browser » Wed Aug 26, 2015 9:45 am

For those following such things, the S&P would have to rise 9.2% from it's level so far today in order to break back above it's 200-day moving average.
We don't know where we are, or where we're going -- but we're making good time.

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Uncle Pennybags
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Re: U.S. stocks in freefall

Postby Uncle Pennybags » Wed Aug 26, 2015 9:48 am

HomerJ wrote:That has nothing to do with why I disliked your post.
I assume these people are here to get new investors to buy the B.S. and send them a PM and get sent to a "pump n' dump" forum.

Browser wrote:For those following such things, the S&P would have to rise 9.2% from it's level so far today in order to break back above it's 200-day moving average.
Is that when the chart looks like a squirrel sitting on a clown's solder?

Jozxyqk
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Re: U.S. stocks in freefall

Postby Jozxyqk » Wed Aug 26, 2015 9:59 am

HomerJ wrote:
broadstone wrote:Negativity breeds from some on here when people post about things the board doesn't agree with. I don't think some Bogleheads are being very open minded to the fact that the theories that were once solid, may not always be applicable as economics do change. With what is going on in the world economically, and especially with the mess the US government has put us in regards to debt, I hope to God it doesn't happen but it's very possible we could experience flat market returns for 10 years, or at the very least extreme volatility due to traders. Please be open minded without the negativity.


That has nothing to do with why I disliked your post.

(1) Your claim is completely unverifiable. You tell us "I got out a month ago", and you state that AFTER the market goes down... If you had posted a month ago, "I just went 100% in cash", you'd have a lot more credibility today.


Well, he did post on April 12 (i.e., before this recent dip), that he went to cash "two months ago." We have some proof that he was out before the market went down. I think there is some credibility there.

This is not to say what he is saying makes sense (of course it is "possible" that we have flat returns for 10 years. Lots of things are "possible"). I'm waiting for his post telling us when he gets back in! Or maybe a post telling us how he will know to get back in.

Browser
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Re: U.S. stocks in freefall

Postby Browser » Wed Aug 26, 2015 10:02 am

Uncle Pennybags wrote:
HomerJ wrote:That has nothing to do with why I disliked your post.
I assume these people are here to get new investors to buy the B.S. and send them a PM and get sent to a "pump n' dump" forum.

Browser wrote:For those following such things, the S&P would have to rise 9.2% from it's level so far today in order to break back above it's 200-day moving average.
Is that when the chart looks like a squirrel sitting on a clown's solder?

It looks more like this:

Image
We don't know where we are, or where we're going -- but we're making good time.

broadstone
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Re: U.S. stocks in freefall

Postby broadstone » Wed Aug 26, 2015 10:03 am

CantPassAgain wrote:Broadstone,

There is about a 0.1% chance that you went to cash due to your skill in knowing what was going to happen in 30 days time. Face it, you do not have that kind of skill. No one does, unless they have inside information.

The reason your posts are causing so much negativity is because they seem to imply we are all stupid for not seeing this coming. In fact, it is quite the opposite. Most of us see a correction, even a crash, coming. We just don't know exactly when. We know markets are irrational in the short term. So we develop an asset allocation that we can live with in the good times and the bad. I can't count the number of times I have read "set an asset allocation so that if stocks drop 50%, you can still sleep at night." Surely you have seen that mentioned a time or two here?

Developing an investment policy statement, determining an appropriate asset allocation (it is different for everyone), investing when you have the money using the most broadly diversified lowest cost vehicles, and rebalancing when necessary over many years, is a good bet for success. That's what the Bogleheads are all about.

If that's not your bag, that's fine. But it begs the question, why are you here? There are plenty of other forums where market timing is encouraged and everyone freely gloats about their good trades (and most don't mention the bad ones).


Well I guess the 0.1% happened this time. Nothing to do with skill. I'm just posting about the decision I made based on the info that was made available to me. Big deal, it's only money. I'm here because I follow the principles for the most part. But this decision I made because I truly believe the US economy is a house of cards that will fall and be rebuilt soon enough. People stuck their heads in the sand regarding the housing market in pre-2006, same thing going on now in regards to the debt problem.

broadstone
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Re: U.S. stocks in freefall

Postby broadstone » Wed Aug 26, 2015 10:05 am

Jozxyqk wrote:
This is not to say what he is saying makes sense (of course it is "possible" that we have flat returns for 10 years. Lots of things are "possible"). I'm waiting for his post telling us when he gets back in! Or maybe a post telling us how he will know to get back in.


As promised, I will post when I re-invest

CantPassAgain
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Re: U.S. stocks in freefall

Postby CantPassAgain » Wed Aug 26, 2015 10:08 am

Interesting

Re: Entrepreneur Husband (33) & Wife (29) Couple Just Getting Started Investing...


Unread postby broadstone » Tue Jun 02, 2015 8:16 pm
I too started investing again in 2015 and think about being late to the bull party. But considering you plan on investing heavily monthly, when the market corrects, you will be averaging out the highs and lows by buying when the market is low, so don't worry about timing.

The stock/bond asset allocation is something only you can decide. But when I was in my early 30's, and before I knew of index investing, I was ok taking on high risk, so for me 100% equities was fine as I planned on leaving my money in for the long haul.

Best of luck
Last edited by CantPassAgain on Wed Aug 26, 2015 10:09 am, edited 1 time in total.

Jozxyqk
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Re: U.S. stocks in freefall

Postby Jozxyqk » Wed Aug 26, 2015 10:09 am

broadstone wrote:
CantPassAgain wrote:Broadstone,

There is about a 0.1% chance that you went to cash due to your skill in knowing what was going to happen in 30 days time. Face it, you do not have that kind of skill. No one does, unless they have inside information.

The reason your posts are causing so much negativity is because they seem to imply we are all stupid for not seeing this coming. In fact, it is quite the opposite. Most of us see a correction, even a crash, coming. We just don't know exactly when. We know markets are irrational in the short term. So we develop an asset allocation that we can live with in the good times and the bad. I can't count the number of times I have read "set an asset allocation so that if stocks drop 50%, you can still sleep at night." Surely you have seen that mentioned a time or two here?

Developing an investment policy statement, determining an appropriate asset allocation (it is different for everyone), investing when you have the money using the most broadly diversified lowest cost vehicles, and rebalancing when necessary over many years, is a good bet for success. That's what the Bogleheads are all about.

If that's not your bag, that's fine. But it begs the question, why are you here? There are plenty of other forums where market timing is encouraged and everyone freely gloats about their good trades (and most don't mention the bad ones).


Well I guess the 0.1% happened this time. Nothing to do with skill. I'm just posting about the decision I made based on the info that was made available to me. Big deal, it's only money. I'm here because I follow the principles for the most part. But this decision I made because I truly believe the US economy is a house of cards that will fall and be rebuilt soon enough. People stuck their heads in the sand regarding the housing market in pre-2006, same thing going on now in regards to the debt problem.


So will you tell us what your plan is? When should we get back in? How will we know?

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Re: U.S. stocks in freefall

Postby TomatoTomahto » Wed Aug 26, 2015 10:10 am

Uncle Pennybags wrote:Is that when the chart looks like a squirrel sitting on a clown's solder?

Post of the day, and it's not quite noon yet. I can stop reading now, because I am completely fulfilled, and I have to drive DS to college. I won't have the radio on, but have instructed DW to text me if the market goes down 25%.

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Re: U.S. stocks in freefall

Postby greg24 » Wed Aug 26, 2015 10:17 am

broadstone wrote:
Jozxyqk wrote:
This is not to say what he is saying makes sense (of course it is "possible" that we have flat returns for 10 years. Lots of things are "possible"). I'm waiting for his post telling us when he gets back in! Or maybe a post telling us how he will know to get back in.


As promised, I will post when I re-invest


[OT comment removed by admin LadyGeek]

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Re: U.S. stocks in freefall

Postby broadstone » Wed Aug 26, 2015 10:50 am

greg24 wrote:I look forward to your announcement two months after the fact.


Such negativity once again.

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Re: U.S. stocks in freefall

Postby Browser » Wed Aug 26, 2015 11:12 am

As pointed out by many, the worst time to be invested in stocks is when they are expensive and when they are downtrending. We are 2 for 2 right now. CAPE has come down but is still high by historical standards (24 vs. 16), and the S&P has fallen well below it's long term moving average. Not a good time to be brave, IMO.
We don't know where we are, or where we're going -- but we're making good time.

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Re: U.S. stocks in freefall

Postby CantPassAgain » Wed Aug 26, 2015 11:25 am

Browser wrote:As pointed out by many, the worst time to be invested in stocks is when they are expensive and when they are downtrending. We are 2 for 2 right now. CAPE has come down but is still high by historical standards (24 vs. 16), and the S&P has fallen well below it's long term moving average. Not a good time to be brave, IMO.


Help us out a little bit more, Browser. What is your equity allocation right now?

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Re: U.S. stocks in freefall

Postby HomerJ » Wed Aug 26, 2015 11:44 am

Browser wrote:As pointed out by many, the worst time to be invested in stocks is when they are expensive and when they are downtrending. We are 2 for 2 right now. CAPE has come down but is still high by historical standards (24 vs. 16), and the S&P has fallen well below it's long term moving average. Not a good time to be brave, IMO.


CAPE has been above 20 since 1992 except for a few months in 2008-2009....

So basically we've been 1 of 2 for 23 years.

There have been at least a dozen 5%-10% drops since 2009... It hasn't been a solid line trending upwards every single day.

Did you sell off every time the market had a 5%-10% drop in the last 6 years?

S&P 500 crossed below it's 200-day moving average in 2010 and 2011... Getting out either of those times would have been a very poor move.

We may indeed be heading for a deep crash... No one knows.

But "technical" analysis is just junk. I do not understand people who look seriously at "signals" without taking even 5 minutes to look at how poorly they performed in the past. The recent past!

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Re: U.S. stocks in freefall

Postby backpacker » Wed Aug 26, 2015 11:48 am

Browser wrote:The S&P has fallen well below it's long term moving average. Not a good time to be brave, IMO.


1) 200-days is only the long-term when you're a four year old waiting for Christmas :happy

2) I don't like technical analysis. Even if I did, I don't understand why anyone cares about the 200-day price return moving average. Suppose Acme Corp is trading right at its 200-day average. It then issues a dividend and the share price adjusts. I'm suppose now suppose to ignore the dividend and conclude that something bad has happened because the price dropped?

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Re: U.S. stocks in freefall

Postby lack_ey » Wed Aug 26, 2015 12:24 pm

HomerJ wrote:S&P 500 crossed below it's 200-day moving average in 2010 and 2011... Getting out either of those times would have been a very poor move.

We may indeed be heading for a deep crash... No one knows.

But "technical" analysis is just junk. I do not understand people who look seriously at "signals" without taking even 5 minutes to look at how poorly they performed in the past. The recent past!

See caveats below and obviously all the ones relevant for trend following / MA / technical analysis / whatever you want to call it, but I'm pretty sure you know your characterization here isn't fair. Or if not, it may be instructive for us to take a look at the data.

Image

In 2010 and 2011 someone trading on this stuff would have popped right back into the market at about equivalent prices as were exited from. (For those unfamiliar, again, in the market when price is above the red line; out of the market when price is below the red line.)

People talk about SMA200 in part because it worked in the recent past for the US market. Quite possibly by chance, and obviously people don't talk about things that haven't worked recently, but I don't think the rhetoric at the bottom is a good assessment of reality.


backpacker wrote:2) I don't like technical analysis. Even if I did, I don't understand why anyone cares about the 200-day price return moving average. Suppose Acme Corp is trading right at its 200-day average. It then issues a dividend and the share price adjusts. I'm suppose now suppose to ignore the dividend and conclude that something bad has happened because the price dropped?

I think people would use total return if that were more readily and easily available. But in most cases it's probably close enough to use price return, especially for the broad market. After all, there's no magic in any particular averaging process or number of days, or exact procedures.

Then again, I am only guessing and don't mean to speak for technical traders, of which I am not one.

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Re: U.S. stocks in freefall

Postby HomerJ » Wed Aug 26, 2015 12:50 pm

lack_ey wrote:People talk about SMA200 in part because it worked in the recent past for the US market. Quite possibly by chance, and obviously people don't talk about things that haven't worked recently, but I don't think the rhetoric at the bottom is a good assessment of reality.


But it didn't work in the recent past... The mighty "death cross" happened in 2010 and 2011 (where 50-day MA crossed the 200-day MA), and there was no crash.

Yet, people see a death cross today, and proclaim... "Oh, that's a strong signal to get out of stocks!"

If a "signal" only successfully predicts a downturn 1 out of 3 (or 5 or 10) times, how useful a signal is it? When does it just become a coincidence?

And surely you agree with me that using CAPE as a signal needs to stop... (The proper answer to that is, "Don't call me Shirley")

CAPE has been above 20 for almost the entire 23 years since 1992. That includes 3 bull markets and 2 bear markets. Can we stop stating that a CAPE higher than historical average of 16 is able to predict anything at all?

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Re: U.S. stocks in freefall

Postby Scott Teresi » Wed Aug 26, 2015 1:12 pm

HomerJ and Backpacker,

From the studies I've read, following a moving average (or cross between two moving averages) has generally reduced volatility/standard deviation (to about 70% of market risk) but historically provided close to the same return over time, using as much data as is available (e.g. going back 100 years, testing in other countries' markets, testing in other broad asset classes, etc., etc.).

As market prices have a momentum or trend component to them, following moving averages generally detracts from returns during bull markets (due to "incorrect" signals in hindsight) and increases returns during the one signal they get right when the bear market comes.

Transaction fees and taxes reduce the benefit of moving averages. Generally choosing signals with longer periods (e.g. a 12-month moving average, which is checked only once per month) can help with fees at least. Strangely enough, short and long time periods otherwise all perform broadly similarly, smoothing out the market a bit, at least historically over long time periods.

Scott

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Re: U.S. stocks in freefall

Postby Johno » Wed Aug 26, 2015 1:45 pm

lack_ey wrote:
HomerJ wrote:S&P 500 crossed below it's 200-day moving average in 2010 and 2011... Getting out either of those times would have been a very poor move.

We may indeed be heading for a deep crash... No one knows.

But "technical" analysis is just junk. I do not understand people who look seriously at "signals" without taking even 5 minutes to look at how poorly they performed in the past. The recent past!

See caveats below and obviously all the ones relevant for trend following / MA / technical analysis / whatever you want to call it, but I'm pretty sure you know your characterization here isn't fair. Or if not, it may be instructive for us to take a look at the data.

In 2010 and 2011 someone trading on this stuff would have popped right back into the market at about equivalent prices as were exited from. (For those unfamiliar, again, in the market when price is above the red line; out of the market when price is below the red line.)

People talk about SMA200 in part because it worked in the recent past for the US market. Quite possibly by chance, and obviously people don't talk about things that haven't worked recently, but I don't think the rhetoric at the bottom is a good assessment of reality.

Then again, I am only guessing and don't mean to speak for technical traders, of which I am not one.

Same here, not a technical trader but let's call out overstatement and straw men. 200SMA has in fact worked in improving risk/return more often than not for prolonged periods, not the same as saying it's always gteed to work. And no reasonable person says PE10 is a tactical allocation tool in same sense as technicals like moving average. Allocation modification via PE10 would only be expected to prove out over a long period, if it did.

Back to actual technical analysis (PE10 is not a technical indicator), it's not entirely nonsense. It's based on real behavioral characteristics of traders/investors. For example when a lot of relatively less sophisticated traders buy into an asset at price X, and then the asset goes to .7X, X might then become 'resistance' for the real reason that unsophisticated investors tend to trade in the rear view mirror, they determine where they want to get out based on where they got in, which really doesn't make much sense, and specifically they place undue emphasis on 'getting back to even' on losing positions. Hence lots of sellers when the asset gets back near X. Likewise it's easy to see how people are attracted to assets which are rising, hence trends, and so forth. Even on this forum statements are often made, usually outside the comfort zone of 'three funds' and 'stay the course', in discussions of other assets types etc, which illustrate the fundamental basis for technical analysis.

But of course the problem in the real world is converting these general observations of behavior into specific rules and levels. That gets more abstract at least, voodoo-ish at times.

And despite the strange (to me) posts from people right after sizable market drops saying they pulled everything out a month ago (isn't it obvious such statements will be especially skeptically greeted when made, by disembodied voices with no known track record, right *after* a market decline? :D I don't get the purpose of it), let's also not set a ridiculously high bar for trading success. Trading success is some combination of being right slightly more often than you're wrong and/or running with winners slightly more than you do with losers, in the context of overall risk management, ie not betting in sizes which the odds tell you will wipe almost anyone out eventually.
Last edited by Johno on Wed Aug 26, 2015 2:11 pm, edited 1 time in total.

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Re: U.S. stocks in freefall

Postby miles monroe » Wed Aug 26, 2015 2:06 pm

technical anyalysis is people trying to create order out of chaos.


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