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[2020] A little stock market sense

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RENTER said:
Obviously smarter than you if you do not understand owning everything with equal amounts is not thinking your smarter than everyone else. It is knowing you're not smarter than others so protecting your ass while growing at the same time.

Also, smarter than you if you do not understand matching or beating the market over a bull and bear cycle means. Common sense says that if you trail the market in a bull and beat it in a bear you will match it or beat it in the long run. Knowing that if you drop 50% you need 100% to get back to even makes it work.

What I am is more curious than you. I was curious what happens if you divide the pie into slices and rotate it so you are selling the hot slices and buying the cold slices. Guess what? It works. Then what I was curious if you expand the pie to include treasuries, bears, commodities and foreign. Guess what? It still works over a bull and bear cycle.

It works a lot better than a 60/40 which did not provide the protection many thought they were going to have and it matches an index without the rollercoaster ride.

So, if you cannot understand this simple concept that a 8th grader should understand, I guess I am smarter than you.
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RENTER said:
Except when interest rates rise and they both go down together. Sorry I will stick with my plan with the USA 36 trillion in debt.
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Keep rotating your pizza !
(but don't get burned ;)

fnd_1.jpg

https://www.nytimes.com/2022/12/02/business/stock-market-index-funds.html
 
Brett said:
Keep rotating your pizza !
(but don't get burned ;)

View attachment 105628
https://www.nytimes.com/2022/12/02/business/stock-market-index-funds.html
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Oh by the way, when interest rates rise and those 60/40 and target funds that people thought were safe get crushed, it is time to rotate my pizza as my rising rate interest rate funds and stock bear funds get to hot.

Then I will take the profits and the higher interest rates to buy the normal rate funds and stocks funds that fell and wait for interest rates to fall and have capital gains.
 
jabberwocky said:
Yawn - you’re picking up nickles in front of a steamroller. It works for awhile - until it doesn’t and you’re giving away a big chunk of returns in the form of trading fees.

Either own the index or be prepared to do some deep fundamental analysis and then buy and hold. I bought into PLTR a couple of years ago when it got ridiculously cheap and it looked like the world was getting more dangerous (the technology and military applications are pretty amazing).

My cost basis is $7.63/share. I’ve now sold a bunch in the last week so my position is now down to a measly 350 shares (was 1500 when I bought in). With your method I would have likely missed returns of over 1000%. Problem is I now need to figure out where to put the cash.
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Oh by the way, please tell us about your losers. If you have had none and been perfect, can the rest of us rub your head so your luck runs off on us?
 
ScoopKona said:
Or people who have the crap luck hit the age when they can start pulling equity just after a crash. "Wait for the rebound" only works so often in a lifetime.

During the housing bubble, circa 2003, my friends were pressuring me to join them purchasing multiple houses with stated-income, interest-only loans. "You just have to hold for five years and you'll DOUBLE YOUR MONEY! Just sign your name really, really large!" (The "sign your name really, really large" bit is a direct quote from one of my friends. My wife and I still say that to each other when suggesting something we know is foolhardy.)

Five years later, they lost everything and I was still on track. Same basic premise.
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You are so right. It just amazes me that people have no memory of the bad times they lived thru and think life is a bowl of cherries. I have been saying for years and it has been confirmed by recent studies that excessive pot smoking fries the memory.

I tell young people all the time, each generation repeats the same mistakes as the previous generation. Learn what those mistakes were and how some were able to take advantage. Then recognize those mistakes and stay away and take advantage. It takes courage to stand up against the tide, but tides always retreat.
 
RENTER said:
Oh by the way, please tell us about your losers. If you have had none and been perfect, can the rest of us rub your head so your luck runs off on us?
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Sure. NTR, VZ and VAC have been absolute dogs for me. Worst quarter was 2020 Q1 with about a 20% drawdown. I would love to say my portfolio is exciting, but it’s pretty boring to be honest. Currently have 27 positions (6 are ETFs). There is minimal technology - I unfortunately missed out on Nvidia and the M7). I made a grand total of 18 trades last year.

No leverage and I usually sit between 5-20% cash (currently at 12%). No bonds since I don’t like the risk profile with potential inflation and I have a defined benefit pension which effectively is like a fixed income investment for me. I will occasionally do a covered call position if I’m ready to get out.

If you like to nerd out in the risk statistics my sharpe ratio over the past year has been 3.58 (S&P is 1.6) and the Sortino Ratio (measures the downside risk better) is 15.6 (vs. 2.91 for S&P).

I think you’ll probably understand pictures better, so here are the historical annualized returns for my portfolio (in blue) going back to the inception of this account (when I fired my financial advisor mid-2019). Pretty much dead on with the S&P (green) over this time period with significantly lower risk.

IMG_3201.jpeg


Now I’ve showed you mine - care to share yours? :)
 
I forgot to mention there is another game I play besides creating a pizza pie and rotating it and catching a falling knife. That is the Muhammed Ali Rope A Dope strategy which helps me beat the market over a BULL AND BEAR cycle.

I put that in large letters because it seems that people who think they are smarter than the rest of us for some reason do not understand what that means.

Like Ali who used the Rope A Dope against Foreman, I use it against the bears and take the best punches the bears can land. Like Ali who was still standing as Foreman exhausted himself, I will be still standing as the bear's tire.

Like Ali who pounced as Foreman tired, I will pounce as the bear's tire and take advantage of the fire sale as others who do not plan for bad days are on their knees crying.

Obliviously some people will laugh at this. These are the people so well off, that they can sur survive a market crash even as the homes are destroyed by fire, hurricanes and tornadoes. They can survive losing their jobs or suffering a major medical event.

If they are in such a position and mock those who are not and who try to protect themselves, that tells you what type of person they are. So, you can assume they can also survive costly divorce lawyer fees during a market crash.
 
RENTER said:
I forgot to mention there is another game I play besides creating a pizza pie and rotating it and catching a falling knife. That is the Muhammed Ali Rope A Dope strategy which helps me beat the market over a BULL AND BEAR cycle.

I put that in large letters because it seems that people who think they are smarter than the rest of us for some reason do not understand what that means.

Like Ali who used the Rope A Dope against Foreman, I use it against the bears and take the best punches the bears can land. Like Ali who was still standing as Foreman exhausted himself, I will be still standing as the bear's tire.

Like Ali who pounced as Foreman tired, I will pounce as the bear's tire and take advantage of the fire sale as others who do not plan for bad days are on their knees crying.

Obliviously some people will laugh at this. These are the people so well off, that they can sur survive a market crash even as the homes are destroyed by fire, hurricanes and tornadoes. They can survive losing their jobs or suffering a major medical event.

If they are in such a position and mock those who are not and who try to protect themselves, that tells you what type of person they are. .
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i think we know what kind of person you are, but in case anyone is in doubt will you please keep telling us?

my life is truly empty without you telling us six times every day.
 
There is a story out there today about another delusional person who was on top of the world, and it came crashing down when her husband lost her job. Except they did not have to worry about a stock market crash. Sounds like they saved nothing. But it sounds like she is lucky. She is an influencer and has people who will pay her for her opinions. Katie Bunton who now says don't be afraid to look poor.
 
letsgobobby said:
i think we know what kind of person you are, but in case anyone is in doubt will you please keep telling us?

my life is truly empty without you telling us six times every day.
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then why whine and just put me on ignore? Some people like what I have to say and love the way I fight back against the know it all's who think they are smarter than the rest of us.
 
RENTER said:
then why whine and just put me on ignore? Some people like what I have to say and love the way I fight back against the know it all's who think they are smarter than the rest of us.
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why would I put you on ignore?

everyone needs some levity in their life and you are mine. so: thank you 🤙🏽
 
RENTER said:
then why whine and just put me on ignore? Some people like what I have to say and love the way I fight back against the know it all's who think they are smarter than the rest of us.
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I think if you're comfortable with what you're doing, that's great. Those that think that their way is the only way are incredibly myopic.
 
I also bought PLTR when cheap a few years ago. Sold 3/4 of my shares earlier this week and moved the winnings to safe investments.

There is heavy sentiment that the market is overdue for a correcton. Why risk more when I can get safe 4 - 5% for doing no work in bonds and CDs?
 
RENTER said:
I forgot to mention there is another game I play besides creating a pizza pie and rotating it and catching a falling knife. That is the Muhammed Ali Rope A Dope strategy which helps me beat the market over a BULL AND BEAR cycle.

I put that in large letters because it seems that people who think they are smarter than the rest of us for some reason do not understand what that means.

Like Ali who used the Rope A Dope against Foreman, I use it against the bears and take the best punches the bears can land. Like Ali who was still standing as Foreman exhausted himself, I will be still standing as the bear's tire.

Like Ali who pounced as Foreman tired, I will pounce as the bear's tire and take advantage of the fire sale as others who do not plan for bad days are on their knees crying.

Obliviously some people will laugh at this. These are the people so well off, that they can sur survive a market crash even as the homes are destroyed by fire, hurricanes and tornadoes. They can survive losing their jobs or suffering a major medical event.

If they are in such a position and mock those who are not and who try to protect themselves, that tells you what type of person they are. So, you can assume they can also survive costly divorce lawyer fees during a market crash.
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The problem is that your method PICKs bulls and bears, which makes it way harder to get the gains than buying straight S&P 500 index funds. Since 99.99% of people or institutions that stock pick perform alot worse than S&P 500, you just won't get the long term gains of S&P 500 index.
 
Elan said:
I think if you're comfortable with what you're doing, that's great. Those that think that their way is the only way are incredibly myopic.
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Thank you. I never say their way is wrong and they are giving bad advice. Just that they think their way is the only way and I fight back when they mock those who have other ways that work for them.
 
VacationForever said:
The problem is that your method PICKs bulls and bears, which makes it way harder to get the gains than buying straight S&P 500 index funds. Since 99.99% of people or institutions that stock pick perform alot worse than S&P 500, you just won't get the long term gains of S&P 500 index.
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you missed the point of a BULL AND BEAR cycle. I do get the gains of the 500 index without the rollercoaster ride and all it costs me is 5 minutes a day.

If you take the 500 index and slice it up into the 11 sector indexes you will get the same gain but one sector will be hotter than the others. Like technology vs consumer staples. In a bull market the tech will clobber the staples. In a bear both will fall but the staples will fall far less and deliver dividends that you can use to buy the beaten down techs.

In a correction, people will run to the staples. So that is a simple way of playing both off against each other. I just expand the pie to the subsectors of the 11 sectors and playing treasuries off against each other and individual stocks that have bear ETF's.
 
VacationForever said:
The problem is that your method PICKs bulls and bears, which makes it way harder to get the gains than buying straight S&P 500 index funds. Since 99.99% of people or institutions that stock pick perform alot worse than S&P 500, you just won't get the long term gains of S&P 500 index.
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Also now because of the magnificent 7, the index 500 is to tech every. If you slice it up into the 11 indexes, utilities, staples and real estate will help protect you in a crash. They will fall but not as much and their dividends will give you cash to buy the tech and communication services indexes that are getting clobbered.

However there is a equal weight 500 index that treats all 500 stocks the same. So that is not as tech every but trailed the market cap 500 index.
 
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RENTER said:
you missed the point of a BULL AND BEAR cycle. I do get the gains of the 500 index without the rollercoaster ride and all it costs me is 5 minutes a day.

If you take the 500 index and slice it up into the 11 sector indexes you will get the same gain but one sector will be hotter than the others. Like technology vs consumer staples. In a bull market the tech will clobber the staples. In a bear both will fall but the staples will fall far less and deliver dividends that you can use to buy the beaten down techs.

In a correction, people will run to the staples. So that is a simple way of playing both off against each other. I just expand the pie to the subsectors of the 11 sectors and playing treasuries off against each other and individual stocks that have bear ETF's.
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You are timing the market, which is very bad.
 
RENTER said:
I forgot to mention there is another game I play besides creating a pizza pie and rotating it and catching a falling knife. That is the Muhammed Ali Rope A Dope strategy which helps me beat the market over a BULL AND BEAR cycle.

I put that in large letters because it seems that people who think they are smarter than the rest of us for some reason do not understand what that means.

Like Ali who used the Rope A Dope against Foreman, I use it against the bears and take the best punches the bears can land. Like Ali who was still standing as Foreman exhausted himself, I will be still standing as the bear's tire.

Like Ali who pounced as Foreman tired, I will pounce as the bear's tire and take advantage of the fire sale as others who do not plan for bad days are on their knees crying.

Obliviously some people will laugh at this. These are the people so well off, that they can sur survive a market crash even as the homes are destroyed by fire, hurricanes and tornadoes. They can survive losing their jobs or suffering a major medical event.

If they are in such a position and mock those who are not and who try to protect themselves, that tells you what type of person they are. So, you can assume they can also survive costly divorce lawyer fees during a market crash.
Click to expand...


Whether you realize it or not, that's stock market timing

tim.jpg
 
I posted about owning all 11 sector indexes rather then just the 500. if you go to CNBC, click on market movers and then on sectors, you will see that all 11 sectors were down today. I had mentioned that owning each of the sectors would not protect you in a crash, the damage is much less.

If you are curious enough to look and not insult me and telling me I do not know the basic investment tenets, you will see that 7 of those 11 did better than the 500. Energy had a slight loss and utilities did the next best.

So, if life falls apart for you and you need money quickly, you can cherry pick from those who did better.

Now I did even better posting a 0.12% gain today. That is because 3 of those sectors have a bear ETF or mutual fund. Energy, Real Estate and Financials. So, using $1,000 as an example I have $1,000 in each bull and bear. Total $6,000.

That leaves me the 8 sectors without a bear. So, if I have $1,000 in each, I have $8,000 not hedged. So I hedge it with $8,000 in a S&P 500 bear.

Now here is an example why 60/40 does not always work. I have treasuries ranging from floating rate to 30 year. Today most bonds fell. Today only the floating rate, 1 month, 3 month, 6 month and 1 year went up and they barely went up. The 2, 3, 5, 7, 10, 20 and 30 year went down. But I have rising rate treasury funds that went up that balanced it out.

I use the interest from these bonds to buy those investments that went down which is REBALACING AND NOT TIMING.

But don't listen to me, I am just a moron who insults those who insults me who does not know the investment tenets.
 
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