[2020] A little stock market sense

[TolmiePeak]

Actually, I am posting on a flim-flam survivor board. It's about how to get the most out of the least. . . after you've been flim-flammed.

Exactly. Well done sir, well done. When the topic of finding a financial planner comes up, my standard quip is that it is easier for most people to figure out self manage your finances than it is to find a honest financial planner that charges a reasonable fee.

 

[WaikikiFirst]

investing when the S&P 500 hits a new all-time high has historically led to stronger results than investing on days when it doesn't hit a new all-time high.
Today is a perfect example of why it is not at all counter-intuitive. I won't claim it is "intuitive", but it is totally understandable.

Today is a perfect example that it is EXTREMELY hard to "SPLAT" a market that was just at an ATH. There is too much exuberance hanging around, and too many who think they really REALLY want to re-test that ATH (or at least come extremely close, depending on when the "sell the ATH" sellers take over). So, when at ATHs, you can get 2 or 3 big down days, but there will be some big up days and at some point getting back up at least 60% toward that ATH.

Here's one that I guess is "counter-intuitive" but statistically accurate: "an inordinate # of the biggest up days occur during down (even Bear) markets, and mostly during the early days of such mkts."
And that is one of the things that makes the investing when the S&P 500 hits a new all-time high has historically led to stronger results predictable.
It is "elevator down", but only after "the market" keeps trying to climb those stairs for a month or 2 or 3. I know someone who has analyzed that. I forget his exact # "N", but he swears the data says that you're better off not worrying about the next 10 - 20% decline til the mkt has FAILED to hit an ATH for "N" days, where "N" is something like 90 days. I also forget if N is calendar days or trading days.

and again, this "intuition" & "understanding" all assumes you understand that the people who write these articles are using a 6 or 12 or 18 or 24 month look-ahead, not a "hold forever". Thre really isnt a good way to frame a calculation in a "hold forever" scenario.

 

[WaikikiFirst]

easier for most people to figure out self manage your finances than it is to find a honest financial planner that charges a reasonable fee.

A-Men. And that goes double ... triple for people who have enough on the ball to have finances worthy of really figuring out in the 1st place.

 

[RENTER]

SOB, SOB. Poor me. With the market up over 1% today, I was up only 0.09%. Yeah right, Don't Cry For Me Argentina. I met my goal over the last 2 days which is to average 0.043%.

When the market was down over 1% on Friday, after spending 5 MINUTES selling the bears and buying the bulls. I was up 0.07%

That is 0.16 over 2 days averaging 0.08. which would be a 20% year annual return if I can average that every day which I do not expect to.

So sad the egotistical nitpicking snobs attack my simple system. If more people do it and survive stock market crashes, we would not have to worry about them voting for socialist and communists. The poor can build wealth by buying their children Index ETf's rather then toys for their birthday or holidays. My uncles bought me savings bonds but they do not build wealth.

I wonder if these egotistical nitpicking snobs are the ones who I hear about who are taking money out of the stock market which is up 70% of the time to bet on athletes, many who are on drugs. But I thank them. I have a ETF for the sports betting.

Again, feel free to talk behind my back, because I will not respond because I don't read the responses to what I post. Have no time or need to. But I will answer any PM questions for those who want to learn how my system works which they can do for themselves, and any 8th grader should understand after being shown it.

 

[TolmiePeak]

SOB, SOB. Poor me. With the market up over 1% today, I was up only 0.09%. Yeah right, Don't Cry For Me Argentina. I met my goal over the last 2 days which is to average 0.043%.

When the market was down over 1% on Friday, after spending 5 MINUTES selling the bears and buying the bulls. I was up 0.07%

That is 0.16 over 2 days averaging 0.08. which would be a 20% year annual return if I can average that every day which I do not expect to.

So sad the egotistical nitpicking snobs attack my simple system. If more people do it and survive stock market crashes, we would not have to worry about them voting for socialist and communists. The poor can build wealth by buying their children Index ETf's rather then toys for their birthday or holidays. My uncles bought me savings bonds but they do not build wealth.

I wonder if these egotistical nitpicking snobs are the ones who I hear about who are taking money out of the stock market which is up 70% of the time to bet on athletes, many who are on drugs. But I thank them. I have a ETF for the sports betting.

Again, feel free to talk behind my back, because I will not respond because I don't read the responses to what I post. Have no time or need to. But I will answer any PM questions for those who want to learn how my system works which they can do for themselves, and any 8th grader should understand after being shown it.

Where can I buy the Renter System ETF?


Sent from my iPhone using Tapatalk

 

[emeryjre]

SOB, SOB. Poor me. With the market up over 1% today, I was up only 0.09%. Yeah right, Don't Cry For Me Argentina. I met my goal over the last 2 days which is to average 0.043%.

When the market was down over 1% on Friday, after spending 5 MINUTES selling the bears and buying the bulls. I was up 0.07%

That is 0.16 over 2 days averaging 0.08. which would be a 20% year annual return if I can average that every day which I do not expect to.

So sad the egotistical nitpicking snobs attack my simple system. If more people do it and survive stock market crashes, we would not have to worry about them voting for socialist and communists. The poor can build wealth by buying their children Index ETf's rather then toys for their birthday or holidays. My uncles bought me savings bonds but they do not build wealth.

I wonder if these egotistical nitpicking snobs are the ones who I hear about who are taking money out of the stock market which is up 70% of the time to bet on athletes, many who are on drugs. But I thank them. I have a ETF for the sports betting.

Again, feel free to talk behind my back, because I will not respond because I don't read the responses to what I post. Have no time or need to. But I will answer any PM questions for those who want to learn how my system works which they can do for themselves, and any 8th grader should understand after being shown it.

Everybody has their own method for dealing with the markets
You have found a method that works for you
Congratulations
It meets your tolerance and risk levels
Makes you money with limited effort at this point
I am sure you spent time and energy to get to where you are today
Do not expect anyone else to embrace your system
Do not expect backslaps and atta boys
It is your system
Nobody else really cares
I speak from experience

 

[ScoopKona]

my standard quip is that it is easier for most people to figure out self manage your finances than it is to find a honest financial planner that charges a reasonable fee.

As with just about everything else in life, "If you want it done right, do it yourself."

Out of every little thing I've ever done in life, financial planning is easily the thing I'm most pleased with how it turned out. My system isn't going to work for most because it involves a lot of sweat equity. I may not make as much as other investors. But I have also never lost money. Ever. A 100% success rate buying lower and selling higher. I'll take that every time over "win some, lose some, hope you win bigger than you lose."

There is always the possibility that the financial system could collapse and our 401Ks and index funds lose all value. But it wouldn't really matter at this point. We can't draw from most of that for years. It's just "cush."

 

[Brett]

The Right Reason to Buy Bonds
Fixed income has regained the haven property that made it desirable for 60/40 portfolios, but other factors may matter

https://www.wsj.com/finance/investi...-guide-1644c54d?mod=lead_feature_below_a_pos1

"Equity investors have had a bumpy few months, believers in the venerable 60/40 portfolio should be permitted a victory lap

“Fixed income has finally regained its traditional hedging property,” Nonetheless, the strongest reason to own bonds over the long term is an even simpler one: the income they generate. Vanguard has long advocated for the benefits of mixing stocks and bonds


Modern investors intuitively understand why bonds — especially those issued by governments — are an effective diversifier: They rally whenever markets grow concerned
about the economy and anticipate central banks cutting rates, which tends to make equities suffer. This is what happened this summer

 

[WaikikiFirst]

Nobody else really cares

How simple it all is

 

[WaikikiFirst]

R2000 back to multi-yr low vs equally-weighted SP500. Can we get a pep-talk from the small caps? Seems like just last month small-caps were the new fad. Well, I guess it was late July and they have underperformed by about 10% since then.
Multi-yr lows.

 

[WaikikiFirst]

Bonds? Victory lap? I suppose if you swore off them for YEARS and just bought them last winter/spring. I suppose. For the 4 yrs prior to that, they were Return-Free Risk. Victory lap? Shouldn't there be a victory 1st? It is like a team behind by 3 TDs scoring a TD with 55 sec to go in a game taking a victory lap, cept this game never ends, so ... Victory lap? LMAO. The nonsense people will link to.

strongest reason to own bonds: income
"effective diversifier"? with the Fed willing to go to extraordinary measures 99% of the time, these are not you grand-daddy's bonds and Vanguard should have figured that out a LONG time ago. You can diversify by buying land, and if it turns out to be a sink-hole, you've diworsified yourself into big losses.

 

[easyrider]

R2000 back to multi-yr low vs equally-weighted SP500. Can we get a pep-talk from the small caps? Seems like just last month small-caps were the new fad. Well, I guess it was late July and they have underperformed by about 10% since then.
Multi-yr lows.

You do realize that before a crash the large investors that are in the loop have pulled out but the small investors that aren't in the loop keep buying. Every crash has followed a market up-trend. Stocks also peak before a recession. The 2008 recession took about 6 years for stocks to recover. The early 2000's recession took about 3 years for stocks to recover. The late 80's took about 1.5 years for stocks to recover. The trend seems like a doubling of time required to recover from a market crash and recession even though "experts" say it's would only be a couple of years.

As you said, stocks go up and down which can be a problem when they stay down for a length of time while you're living off your investments or about to retire.

Bill

 

[WaikikiFirst]

I decided to re-acquaint myself with this "close to ATHs, better not to worry about a bear mkt ON AVG". See this chart
https://stockcharts.com/h-sc/ui?s=$SPX&p=D&b=5&g=0&id=p6292824892c
It sets up a Price Channel, meaning it picks off the highest & lowest prices in the last 99 trading days and draws horizontal lines at those prices. See the green lines running across @ 5669 & 4953. That top line is at the ATH. Historical data says "What me worry?" until that ATH line steps down, which it will do 99 days after the ATH.
YMCV.
I also have a big data dump he sent me. TMI for this crowd I'd say

 

[letsgobobby]

R2000 back to multi-yr low vs equally-weighted SP500. Can we get a pep-talk from the small caps? Seems like just last month small-caps were the new fad. Well, I guess it was late July and they have underperformed by about 10% since then.
Multi-yr lows.

10% decline isn't very noteworthy. and while it's gone nowhere in 3 years, it's almost doubled in 10. short term volatility is unimportant to long term investors.

 

[letsgobobby]

You do realize that before a crash the large investors that are in the loop have pulled out but the small investors that aren't in the loop keep buying. Every crash has followed a market up-trend. Stocks also peak before a recession. The 2008 recession took about 6 years for stocks to recover. The early 2000's recession took about 3 years for stocks to recover. The late 80's took about 1.5 years for stocks to recover. The trend seems like a doubling of time required to recover from a market crash and recession even though "experts" say it's would only be a couple of years.

As you said, stocks go up and down which can be a problem when they stay down for a length of time while you're living off your investments or about to retire.

Bill

this is sequence of return risk and easily handled by understanding the Trinity data and modern portfolio theory. Or using an annuity for a portion of your assets. Failure to understand investing basics definitely leads to suboptimal performance, usually behaviorally. But it doesn't mean investing in broad low coat tax efficient index funds is a bad idea. For most investors it is the best option.

 

[Brett]

You do realize that before a crash the large investors that are in the loop have pulled out but the small investors that aren't in the loop keep buying. Every crash has followed a market up-trend. Stocks also peak before a recession. The 2008 recession took about 6 years for stocks to recover. The early 2000's recession took about 3 years for stocks to recover. The late 80's took about 1.5 years for stocks to recover. The trend seems like a doubling of time required to recover from a market crash and recession even though "experts" say it's would only be a couple of years.

As you said, stocks go up and down which can be a problem when they stay down for a length of time while you're living off your investments or about to retire.

Bill

The key is finding those mysterious investors that are "in the loop" before the stock market jumps 800 points or "crashes".
If those genius stock market investors could be identified or if they managed a mutual fund ..... watch out!

.

https://www.nytimes.com/2022/12/02/business/stock-market-index-funds.html

 

[WaikikiFirst]

it's almost doubled in 10 (which is almost pathetic for the risk you take)

Well, I expected better from the guy who knows that RISK-ADJUSTED return is what matters. Without looking up todays, data ...
10 yr CAGR for R2000, incl divs, is about 7.5% or less.
10 yr CAGR for SP500, incl divs, is about 12%, prob higher.
10 yr volatility (that "risk" part) of R2000 is 10 - 20% greater than that of the SP500.
a way to sum it up is that IWM has an Alpha of roughly -5 over the last 10 yrs (note: that "-" in front of an Alpha is Not Good & -5 is double-plus Not Good)
But if someone wants to own stocks that don't earn a profit and wants to underperform the SP500, we recommend the R2000.

if you want to bet the AI bubble will pop soon, you can probably expect to outperform the SP500, which is now heavily over-weight in that. Or, you could own the SPY and short an AI ETF

 

[easyrider]

The key is finding those mysterious investors that are "in the loop" before the stock market jumps 800 points or "crashes".
If those genius stock market investors could be identified or if they managed a mutual fund ..... watch out!

.

View attachment 99180
https://www.nytimes.com/2022/12/02/business/stock-market-index-funds.html

Indeed. Finding out who is making the real money in stocks is the trick. There's an app for that.

Bill

Autopilot - The Investment App

Invest like a Politician, directly in your broker. $500M+ invested. 10M+ trades. 100K+ investors.

www.joinautopilot.com

 

[Brett]

Indeed. Finding out who is making the real money in stocks is the trick. There's an app for that.

Bill

Autopilot - The Investment App

Invest like a Politician, directly in your broker. $500M+ invested. 10M+ trades. 100K+ investors.

www.joinautopilot.com

LOL
Anyone can buy Silicon Valley tech stocks, don't need an app. But go ahead and run that app Bill .... be the billionaire !


Remember, we're talking predictions Bill

Stock market predictions​

https://en.wikipedia.org/wiki/Stock_market_prediction

 

[TolmiePeak]

LOL
Anyone can buy Silicon Valley tech stocks, don't need an app. But go ahead and run that app Bill .... be the billionaire !


Remember, we're talking predictions Bill

Stock market predictions​

https://en.wikipedia.org/wiki/Stock_market_prediction

Common man. You just need the right system. Are Wade Cook's books still on sale?

Look 6 5 star reviews on Amazon. Must be a lock for success...

 

[letsgobobby]

i'm not arguing it was a good investment, or a bad one. i am personally more a believer in the value factor than the small and look how that has done over the last generation - a long period of risk adjusted underperformance!

i was simply pointing out that a recent 10% pullback isn't very meaningful.

Well, I expected better from the guy who knows that RISK-ADJUSTED return is what matters. Without looking up todays, data ...
10 yr CAGR for R2000, incl divs, is about 7.5% or less.
10 yr CAGR for SP500, incl divs, is about 12%, prob higher.
10 yr volatility (that "risk" part) of R2000 is 10 - 20% greater than that of the SP500.
a way to sum it up is that IWM has an Alpha of roughly -5 over the last 10 yrs (note: that "-" in front of an Alpha is Not Good & -5 is double-plus Not Good)
But if someone wants to own stocks that don't earn a profit and wants to underperform the SP500, we recommend the R2000.

if you want to bet the AI bubble will pop soon, you can probably expect to outperform the SP500, which is now heavily over-weight in that. Or, you could own the SPY and short an AI ETF

 

[easyrider]

LOL
Anyone can buy Silicon Valley tech stocks, don't need an app. But go ahead and run that app Bill .... be the billionaire !


Remember, we're talking predictions Bill

Stock market predictions​

https://en.wikipedia.org/wiki/Stock_market_prediction

How do you decide on what to invest in if you aren't using a broker ? I've tried brokers and other means of market investing and did make an average gain of between 7% to 12% a year minus the downturns. I think our best was a no load Vangaurd mutual fund that tanked in 2008 which really turned me off.

Bill

 

[TolmiePeak]

How do you decide on what to invest in if you aren't using a broker ? I've tried brokers and other means of market investing and did make an average gain of between 7% to 12% a year minus the downturns. I think our best was a no load Vangaurd mutual fund that tanked in 2008 which really turned me off.

Bill

Often the throwing the darts at the stock tables in the Wall St. Journal back in the day did better than the expert stock pickers.

 

[easyrider]

Common man. You just need the right system. Are Wade Cook's books still on sale?

Look 6 5 star reviews on Amazon. Must be a lock for success...

View attachment 99186

The one thing rental properties have that stocks don't is monthly cash flow. While stocks beat real estate in value over time they don't create as large of a monthly income stream from what I see. Comparing $1,000,000 of stocks @ 10% or $100,000 earnings in a year and $1,000,000 worth of real estate making about 22% in rent or $220,000 a year then adding the inflation driven values of real estate of late, the rental properties seem to be a better choice for those who know about real estate.

I haven't even added in the tax benefits which are below zero regarding stocks. Every time I sold stocks I paid taxes. With real estate there is very little tax when doing a 1031 trade up. I haven't sold anything but some flips in which I did pay capital gains tax, but even with the taxes the profit was pretty good.

Bill

 

[easyrider]

Often the throwing the darts at the stock tables in the Wall St. Journal back in the day did better than the expert stock pickers.

So how do you decide what to buy ?

Bill