Market Timing: Should You Attempt It?

Top 100. Aug 9, 2001 6:27 AM

» Will_L - Re: Re: Re: Re: Re: Re: Re: Vanguard says nay to market timing w

In response to message posted by soonertimer:

Hi Sooner,

Good job. You are second only to our local smut laced feline Ras, who got totally out of equities in winning the timing battle to this point.

Obviously by going from an 80% to 25% allocation in July 99, you were not taking Brinker's advice as he was recommending a fully invested position at that time.

If your point is that he was warning that the market might fall was the reason you took action, I'd say that is mighty risky. He's selling a timing newsletter and likes to come up with a "risky" reason to buy it occasionally. I don't remember the date but I believe it was 97 when he spent a good portion of a newsletter talking about everyone getting familiar with funds to short the market because it was very likely that there would be a bear market within a year.

Valuations were high then of course. Anyone who took that warning missed the boat up.

I think it's difficult to predict when to get in and out of the market and trying will result in more risk over time. I'm glad it's working for you and think you are well advised to pick your own entry point as you have with a DCA approach rather than wait for the promised "Moabo". Continued good luck to ya!

-- posted by Will_L

Top 101. Aug 9, 2001 7:37 AM

» mdorsey - Re: Re: Re: Re: Re: Re: Re: Re: Re: Vanguard says nay to market

In response to message posted by Jonathon:

Yes he did. I chose to use options to limit my exposure and possible losses while leveraging the 2% of my portfolio invested. Yes a total loss. BB gets some credit for that too.

-- posted by mdorsey

Top 102. Aug 9, 2001 7:55 AM

» soonertimer - Re: Re: Re: Re: Re: Re: Re: Re: Vanguard says nay to market timi

In response to message posted by mdorsey:

Having no desire to either condemn nor "carry water" for BB, let me say that I prefer not to be an all-or-none investor and thus am not (nor never have been) depending on a particular MOABO. One serious consideration in doing some DCA at this point is that historically (almost always) buying into a Bear market has been a successful plan. On the other hand, valuation levels are too rich and investor sentiment is too bullish to go back to fully invested (IMHO).

-- posted by soonertimer

Top 103. Aug 9, 2001 8:03 AM

» mdorsey - Re: Re: Re: Re: Re: Re: Re: Re: Re: Vanguard says nay to market

In response to message posted by soonertimer:

I have been tempted to put some funds back into stocks as you have. I guess it's greed, why I haven't yet. Or maybe the perception that most of my market moves turn out to be in the right direction but too early.

-- posted by mdorsey

Top 104. Aug 9, 2001 8:10 AM

» soonertimer - Re: Re: Re: Re: Re: Re: Re: Re: Vanguard says nay to market timi

In response to message posted by Will_L:

The reason that I was (am) a listener (and subscriber) to BB was that he seemed to share an appreciation in 2000 that we may be at the point where the great Bull market was turning into a "secular Bear". Such an understanding is irrelevant to speculative trades (e.g., QQQ's). True, he sometimes acts like a "guru", but I am not oblidged to be a "cult member".

-- posted by soonertimer

Top 105. Aug 9, 2001 8:12 AM

» Kirk - Re: Selling stocks to buy bonds

In response to message posted by mdorsey:

But BB certainly helped me decide to sell stocks and buy bonds.

THAT is a reasonable statement.

One of the problems with market timing is deciding when to get back in. Brinker, who had good timing on a partial sell Jan 2000 blew all the advantage if you followed his advice on when to get back in with the cash by giving a buy with 20 to 50% of that 65% cash raised of QQQ just before that index fell OVER 50%.

We always talk about the problem of market timing is missing the bottom. I think many have found out that a pile of cash tends to burn a hole in their pockets and they are influenced to do stupid things like "trade" investment dollars.

My hats is off to YOU for getting out of stocks in a big way (far more than your favorite market timer suggested) and for only using a small part of your portfolio to participate in the QQQ debacle. Perhaps YOU should do a timing newsletter as your moves have been good?

From what I have read, many can market time successfully once or twice... sort of like flipping coins, there will ALWAYS be some winners. The real trick is to flip that danged coin 10 times and get them all right. Some might get 9 flips in a row and believe they are special and then do what Brinker did and throw caution to the wind and blow the advantage in a single, bonehead move to recommend QQQ and TEFQX before they dropped 50% and 80% respectively. THAT is why market timing is not recommended.

Funny when one of the "best" market timers has to resort to hiding his mistakes... it does not speak well for the "strategy" of market timing at all.

-- posted by Kirk

Top 106. Aug 9, 2001 8:34 AM

» Will_L - Re: Re: Re: Re: Re: Re: Re: Re: Re: Vanguard says nay to market

In response to message posted by soonertimer:

"The reason that I was (am) a listener (and subscriber) to BB was that he seemed to share an appreciation in 2000 that we may be at the point where the great Bull market was turning into a "secular Bear". Such an understanding is irrelevant to speculative trades (e.g., QQQ's). True"

Well it sure seems to have worked out for you so far Sooner. I am curious since you say "am a listner", and believed that he had a lot of understanding about the general market and that it was 'irrelvalant to his 2-4 month calls, if you still believe he has that great "understanding" of where the market is headed?

Do you share his take that the big reason next year will be good is that it is an "off presidential election year"? Do you find his lack of "vision" and hiding from discussing the market troubling or do you think you can tell what he is thinking now from his words?

The other puzzle I've had is how so many -- not you particularly but others say they knew Brinker was wrong giving the two to four month call on the QQQ's but knew he was right in calling the overall market for a couple years. How big a sector and over what time frame do you think Brinker should be able to call with accuracy? The entire market? Just the S&P? The Nasdaq? 6 months out --a year? more? It's always seemed inconsistant to me when he claimed his model never looked out more than a month or two in the past. I think I'd rather have been listening to you than Brinker--you got out 80 percent and are DCAing back in from a very low position. smile Thanks

-- posted by Will_L

Top 107. Aug 9, 2001 8:35 AM

» mdorsey - Re: Re: Re: Re: Re: Re: Re: Re: Re: Vanguard says nay to market

In response to message posted by soonertimer:

Up to the last year I had been a faithful listener but not a subscriber. For the last 6 months I have listened less and less. I think mostly because the stock market has been so boring or maybe because I own so few.

-- posted by mdorsey

Top 108. Aug 9, 2001 8:38 AM

» soonertimer - Re: Re: Selling stocks to buy bonds

In response to message posted by Kirk:

FWIW - a few points.
1 - trading is a temptation which should not be done without a stop loss and even then with only a very small portion of assets.
2 - I NEVER would attempt "market-timing" with a sector fund like the QQQuackers.
3 - As a much younger man, I knew several folks, many rather ordinary folks who did rather well in the 60's and '70's by buying during the many bear markets and selling the rallies.

-- posted by soonertimer