amoeba's Account Talk

[Boghie]

Amoeba,

I moved from 17% out to 40% out of the market right after the Healthcare vote. Caught some of the winnings before, slapped myself on the back, then watched as others made more than I...

Oh well. The same lesson 'learned' - yuk, yuk...

I always seem to have to ‘learn’ the same lesson. You know the one. The one where you allow the market to decide, rather than preempting the market because of politics or something…

BT's chortling at me

 

[amoeba]

well ok fine:

boghie/birch win on the over/under 1,150 call. Now - expectations for the 4/2 jobs report are lowered based on the ADP, so I'm figuring +250K will be considered a huge surprise, when it should be considered noise in the data.

On the other hand, anything above 150K will not produce much of a reaction; anyway - I am not making a prediction on this number - and will have a hard time believing the economy is in better shape than it was 6 months ago. Its not.

More home foreclosures coming this summer in a big way....or another government bailout at huge taxpayer risk/expense. It's starting to become an expectation....which may factor into market conditions once it stops.

 

[Birchtree]

A good article for you from Morningstar and a few others if you have time.

http://pragcap.com/evening-reading-97

 

[amoeba]

jobs number comes in low, now what?

As the subject implies, that was one mediocre jobs report, the total came in lower than anyone had forecast; and well below concensus. And then obama and the ppt go all over the news claiming credit.

hmmmm. so what's the reaction going to be? my last call is that anything above 150 would hold the line. But 162 is about as close to a disappointment as you could get without calling it lousy. Certainly not enough to keep unemployment from rising. And, continuing claims rose, with an upward revision to the prior month - as if anyone wants to mention that at the white house (they didn't).

As there seems to have been a whole slew of suckers out there buying into any dip or bidding up anything short of terrible news; I think we are do for more sideways action next week.

 

[Boghie]

Amoeba,

The S&P 500 is still down 24.2% from the high point. The market was frothy at the top - but a frothy markup of 24.2% from here? We still have room to grow till we hit the 'Obama Economic Miracle' Plateau.

A normal large correction would have been 20%. As soon as news hit that our Presidential choice was economic moron one or economic moron two the frothy market tanked well past the correction point. Absolutely no confidence that either of the goobers would be good for the economy. But, it went too far.

You have to ride the weak horse when it is the only horse you got. When it croaks you will have to walk the rest of the way:nuts:

 

[Birchtree]

"It's fear that has kept many on the wrong side of stocks stealth bull market for the past 12 months and highly likely will continue to do so for the next 12 months. Projecting the Dow to 12,000 by mid May 2010. Knowledge has marked the difference between those that take informed risks and make money and those that remain petrified by fear in a perpetual state of inaction."

http://www.marketoracle.co.uk/Article18234.html

 

[amoeba]

well I dunno what employment report everyone else is reading, but if today's move is any indication, news has to be REALLY BAD, or else the market is going to make a move up. We get a new claims number this week

I made a hedged move today based on the sharp drop in bonds, I know, AGG has fallen off a cliff in the last 7 sessions, but if you don't trade, you end up like birchtree, have negative years, then boast that you have millions on the up years when you really haven't made a dime.

My goal this month, again, is in the range of 0.75-1.00%.

One must be very careful here, as credit has been cheap but that may change as banks tighten. Swap spreads have moved up in the last week from very low levels - give the last 3 months a look:

http://www.bloomberg.com/apps/cbuilder?ticker1=USSP2:IND

 

[Boghie]

well I dunno what employment report everyone else is reading, but if today's move is any indication, news has to be REALLY BAD, or else the market is going to make a move up. We get a new claims number this week

I made a hedged move today based on the sharp drop in bonds, I know, AGG has fallen off a cliff in the last 7 sessions, but if you don't trade, you end up like birchtree, have negative years, then boast that you have millions on the up years when you really haven't made a dime.

My goal this month, again, is in the range of 0.75-1.00%.

One must be very careful here, as credit has been cheap but that may change as banks tighten. Swap spreads have moved up in the last week from very low levels - give the last 3 months a look:

http://www.bloomberg.com/apps/cbuilder?ticker1=USSP2:IND

Amoeba,

A monthly gain of 0.75% - 1.00% factors out to an annual gain of 9.00% - 12.00%. That range is in the normal growth range for the 'C Fund' plus some exposure to the 'S Fund' and the 'I Fund'. To get there you need a normal bullish market and no exposure in the 'G Fund' and 'F Fund'.

Unless, of course, you are an expert at picking both the tops and the bottoms of the various indexes we can invest in. :worried:

 

[Birchtree]

Check these false numbers. My gross proceeds in sales for 2008 was $252,686 and my gross proceeds in sales for 2009 was $317,620 - these are reported to the IRS on a 1099 and refer to my oceanic account. I don't want to be braggadocio so I won't divulge my profits - but they were substantial. Already this year my gross proceeds in sales is $223,867 and I actually prefer not to make any more money. These numbers do not include the payment of reinvested dividends. So money is being made and taxes are being paid. My tugboat (TSP) returned to previos highs more than several months ago as a result of disciplined dollar cost averaging. Nothing like eating those $8, $9, $10, $11, $12 C fund prices to fill the basket - you can think what you please. But I'm currently working on my second $1M off the March bottom. No fear here as I rack the dollars in this one way ramp up bullish market. Currently my oceanic is up $43K today thanks to the small caps - this might be a $100K week. How many of those $100K weeks does it take to make $1M?

 

[Boghie]

Check these false numbers. My gross proceeds in sales for 2008 was $252,686 and my gross proceeds in sales for 2009 was $317,620 - these are reported to the IRS on a 1099 and refer to my oceanic account. I don't want to be braggadocio so I won't divulge my profits - but they were substantial. Already this year my gross proceeds in sales is $223,867 and I actually prefer not to make any more money. These numbers do not include the payment of reinvested dividends. So money is being made and taxes are being paid. My tugboat (TSP) returned to previos highs more than several months ago as a result of disciplined dollar cost averaging. Nothing like eating those $8, $9, $10, $11, $12 C fund prices to fill the basket - you can think what you please. But I'm currently working on my second $1M off the March bottom. No fear here as I rack the dollars in this one way ramp up bullish market. Currently my oceanic is up $43K today thanks to the small caps - this might be a $100K week. How many of those $100K weeks does it take to make $1M?

BT, it must be nice to be able to invest $21,000 annually into TSP. That 55+ catchup gave you an aweful lot of share growth. I, too, upped my contributions. Yummy.

However, as a growth percentage you are most likely still negative in the tugboat account since you rode it down in 2008 and the first quarter of 2009. Nothing a year of standard growth won't fix - and those new shares will make that so much sweeter. And, who is looking at a retirement account over a two/three year span. Bet you have lots of gain over the past ten or twenty (remember Amoeba - he invests in the S/I as well).

Now, Amoeba, how are you going to gain 1% sitting in low return Social Security bonds so much of the time? My guess is we're talking about a 3% - 5% gain annualized. If you sit in Social Security Bonds (G Fund) you will get a Social Security Bond return - that is, your 15% contributions and holdings are making 3%. Fine if you are nearing retirement (hopefully with a nest egg), but a guaranteed 'Alpo Meal Deal' if accumulating for retirement.

 

[Birchtree]

I did make three profitable round trip tickets on the I fund in the last two years - it all adds up. I'm trying to do the same strategy again. Amoeba was brave enough to recommend to me awhile back that I sell everything - so now I have to ask if I should finally sell my CLF at $75 which puts me up 30 points. Nah, I'm greedy and will wait for more.

 

[Boghie]

Greed is Good, BirchTree
Greed is Good.

Fear is bad.
Fear is really bad.

 

[Birchtree]

Fear is actually the new paradigm where fear of missing any further gains will force money into this low volume bull market. Our friend amoeba is a good example - he'll finally start making some money. I have to write a cheque to the IRS and then after that I'm back to buying all the way to the next top. Folks need to remember that the IRS will now get a copy of every purchase made as well as gross proceed sales - it all has to line up or they will be knocking on doors. I got dragged downtown in the mid 1970s by the IRS. I told the female agent that I thought she could benefit from a good dose of sensitivity training - that only made her diurese and almost made her micturate in her pants. So I cut her a cheque on the spot.

 

[amoeba]

This is the TSP website:

Birchtree keeps talking about stuff involving sales, and "CLF", which have nothing to do with the TSP. As far as the TSP goes, he's never been out more than 10%, and that only recently.

So riddle me this - how is it that birchtree has made a dime since the dot-com boom? I bailed at 1,249 in the S&P almost a decade ago, my return of ~4% annually since puts me at the S&P equivalent of about 1,900.

Birchtree, on the other hand, is all in through that whole period. He isn't even there yet. Now, the market may go to 1,600 in a month, and he still won't be - in the TSP - where I am.

Pigs get slaughtered - and it takes them a long time to get back what they lost.

 

[amoeba]

What's "normal"?

Amoeba,

A monthly gain of 0.75% - 1.00% factors out to an annual gain of 9.00% - 12.00%. That range is in the normal growth range for the 'C Fund' plus some exposure to the 'S Fund' and the 'I Fund'. To get there you need a normal bullish market and no exposure in the 'G Fund' and 'F Fund'.

Unless, of course, you are an expert at picking both the tops and the bottoms of the various indexes we can invest in. :worried:

No C-fund that I know of has gotten 9-12%. Not the last 3 years, and not the last 10. More like 0%.

Anything is better than the last decade. I rode the dot-com boom all the way up to the top, and then rode it down to 1035, and bailed at 1249. That number wasn't seen FOR YEARS to follow, and then it collapsed under the weight of the CDO (collateralized debt obligation)mess.

The 60% move today was just my first IFT. I have one more. I typically move in two increments; just thought the bond move down was too sharp to resist. I'll know soon - if the double bet was worth it.

If bonds bounce I'll have that opportunity to either hedge further or move all into equities later. So while I'm not claiming to be an expert, I am a player, I try.

I have an annual target, but it's not big (8%), and it isn't necessarily divided equally into months. It surely isn't negative, but we will have such negative periods - which can go for months.

 

[Birchtree]

"Bear market in bonds could trigger 'melt up' in stocks," says Sonders.

 

[FAB1]

Fear is Folks need to remember that the IRS will now get a copy of every purchase made as well as gross proceed sales - it all has to line up or they will be knocking on doors. .

Every purchase of what, BT? Stocks? Give details please.

 

[Birchtree]

FAB1,

They will get a copy from your broker of every purchase you make that is not inside a Roth IRA. This would include stocks, mutual funds, bonds - anything that would generate a capital gain. They have been very quiet about this change. My masseuse warned me early about this change and the potential problems it could create.

 

[Boghie]

Amoeba,

Here is a great article demonstrating your point regarding returns by generation (or age).

Basically, the GenXers have been screwed - as always...

 

[amoeba]

I'm not an expert, but starfox is.....

my 25% bet on F-fund is working, but starfox's 66% is doing even better; he's the only other member out of the last 60 or so IFT's posed that put any money in the F-fund besides me.

just wish I had more guts to make bigger moves on stuff which had been looking ugly for the last month (F-fund)

and here's another one....I think we may be looking at more sideways action until the end of this month (second consecutive positive jobs report(?), if revisions hold).....which is one of several reasons I'm overweighting equities.

Keep any eye on everything for right now. It's usually calm before a storm.