Birchtree's Account Talk

[MaStA]

So what if the bubble bursts again right before you plan on fully retiring and using the money you thought you have earned? Are you prepared for that? Birch you having zero caution just scares me lol.

 

[Birchtree]

So everyone and their sisters thinks we are at a third cyclical market top - to me that is just plain silly. Let'em cut and run for the hills. 78% of stocks in the S&P 500 have rising long term moving averages with all ten sectors in bullish territory. Emotional traders are never rewarded as a group. With fund flows proving that there were historically high withdrawals during the past several years, the market will continue to punish them in the best way possible: with a powerful rebound. We've already returned a 124% gain from the lows and I suspect there is another 200% waiting in the wings. As usual the fears of another decline are just too strong, and emotion overcomes rationality. By keeping emotions in check and focusing on fundamentals this bull is going to provide me several million dollars to spend as we head higher.

 

[Birchtree]

For those that may be familiar I would like to say that my wife's defined contribution plan has finally broken through the +$500K mark. We will hold the line with her S&P 500 index as the market moves ever higher. The beauty of this plan is that it will continue to grow while she is in retirement earning $27K per point forward. If we are actually in an early mega trend secular bull market that may last several decades - just think of the possible wealth to be acquired. Now I haven't done as well with my tugboat in the last several weeks but that is just a temporary distraction. I have full confidence in my 80% position in the I fund - I just wish I were still making contributions. Anyway, margin accessability is going to be my saving grace providing ample dollars to throw at this stampeding bull.

 

[RealMoneyIssues]

Here is George Lindsey's "A Domed House and Three Peaks". The other version, "Three Peaks and a Domed House", is more commonly referred to, I think. Anyway, if we continue to follow this pattern we will have an excellent buy-in point in a couple of months. Hmmmm...does this coincide with the Fiscal Cliff/Debt Ceiling struggles in DC?

View attachment 21339

Well, that pattern failed...

 

[JimmyJoe]

Alan Greenspan said a few days ago, "Ignore the economy, only the stock market matters".

 

[JimmyJoe]

For those that may be familiar I would like to say that my wife's defined contribution plan has finally broken through the +$500K mark. We will hold the line with her S&P 500 index as the market moves ever higher. The beauty of this plan is that it will continue to grow while she is in retirement earning $27K per point forward. If we are actually in an early mega trend secular bull market that may last several decades - just think of the possible wealth to be acquired. Now I haven't done as well with my tugboat in the last several weeks but that is just a temporary distraction. I have full confidence in my 80% position in the I fund - I just wish I were still making contributions. Anyway, margin accessability is going to be my saving grace providing ample dollars to throw at this stampeding bull.

Compounding gains is like making contributions.

 

[RealMoneyIssues]

Alan Greenspan said a few days ago, "Ignore the economy, only the stock market matters".

Then he too doesn't live in reality... My stock market gains won't be beneficial to me for 15 years+

My take home pay, and what it costs to live effects me now... and I am paying more these last few years to just get the staples (groceries, gas, utilities), let alone the fact that eating out and entertainment have nearly got to the point where it is no longer worth it... THATS inflation, and it does matter...

 

[Birchtree]

RMI wants so badly to be bullish but he's all shoulders and no neck. The last two bear markets have caused many people to leave the market. And once they've done this they may take many years, if ever, to come back. I never left and I'm still here reaping my rewards. I'm like a wet dog, I just shake off turbulence. Remember, foolish is as foolish does, don't be fooled by the fools. I realize we may see some frightening retracements the higher we go - those will provide me with golden prices because I'm on a mercy mission to save as many wall flowers as I possibly can.

 

[Birchtree]

RMI - what you posted in the PM is fine - let'er roll. I'm just using myself as an example of what may be achieved by interested members that want to branch out.

 

[RealMoneyIssues]

RMI - what you posted in the PM is fine - let'er roll. I'm just using myself as an example of what may be achieved by interested members that want to branch out.

Roger

RMI wants so badly to be bullish but he's all shoulders and no neck. The last two bear markets have caused many people to leave the market. And once they've done this they may take many years, if ever, to come back. I never left and I'm still here reaping my rewards. I'm like a wet dog, I just shake off turbulence. Remember, foolish is as foolish does, don't be fooled by the fools. I realize we may see some frightening retracements the higher we go - those will provide me with golden prices because I'm on a mercy mission to save as many wall flowers as I possibly can.

Not the case.

You, my friendly PermaBull, are in a extremely unique situation that doesn't apply to TSP nor the markets in general. Since the mid 70s, you have been building a dividend based portfolio that is the envy of most. And if I understand correctly, you actually don't ever plan to use the money in your multi-million dollar account; but to pass it on to your heirs. A fine goal.

Though you are finely positioned to take the brunt of any bear market, you also tout immense bullishness to the extreme. Your situation my friend, is one that cannot be emulated in the TSP, nor in an account someone is just now starting UNLESS they are willing to take the brunt of a bear market... most are not.

Your wealth amassed over 4 decades, so don't let anyone believe that your situation is a new undertaking. Your wealth is also based on margin, which also is not available in the TSP and is something people can lose their life savings on if done incorrectly. You have protected yourself, good.

I am neither bull nor bear, though because of my cost of living and what I see happening to our beloved country, I am worried. Probably more cautious than I should be... but I am not a long term investor like you. I will have to use my account in about 15 years to live on. want to keep myself from taking a huge hit when the market goes down. I also want to be able to gain while the market is going up, which I believe you call "timing the market" and you also believe it is a fools errand.

Being constantly bullish is a fine goal, as you have proven over the years. You also make all your recent gains claims (about 109% I think) from the bottom of the market in 2009. Would you dare compare that gain to what the gain would have been based on your account value Oct 2007? or say Mar 2000? Peak to peak to peak your gains are only those from dividends (and any possible unrealized gains from stock value - which you don't plan to sell), which I am sure are mighty. I am sure your gains from the mid 70s to 2000 were great since the S&P 500 started in the high 60s (I think around 68) and peaked in Mar 2000 at 1550 or so; a 2180% gain.

Any value of a portfolio is from start to finish. You had a great start and have no finish. Mine started in 2006, so I just got back to where I was in 2011 (was a buy and holder until then) and have made modest gains since then. I am sure there are many with stories very similar to mine.

I am convinced the only reason the market (don't confuse this with the economy) is this high is because of Fed intervention. I know, don't fight the fed, but are you ready with your beloved equity bubble pops (2016 maybe 2017)? Will your sacrificial lamb account cover you if you had a margin call throughout a 1-2 year bear market?

I also believe that we are victims of the large institutions. The retail investor cannot manipulate the market with their measly purchases and sells. Conspiracy theory or not, it is hard not to see the manipulation of the market.

Well, I guess I needed to get that off my chest... Almost sounds like a manifesto :nuts:

I mean no disrespect, I just wanted to clarify some things. I think you and I have this conversation about every 6 months...

 

[Birchtree]

In defense of myself, I'm just an ordinary guy. Years ago I decided to start buying a portfolio instead of a house and simply saved as much money as I could. I've had my successes and many failures over the years - and now I'm prepared to spend several million dollars if the market gives it to me. Yes, I take risks because that's how I function as a renegade contrarian - there's nothing special about what I do. I don't run from fear but rather try and take opportunity when everyone else runs away. I've waited years to be in my enviable position but I am not complacent by any means - playing with millions of dollars is going to be fun but not necessarily easy. Thanx for all comments though.

 

[Birchtree]

A few encouraging words from my WSJ. "In the constant battle between fear and greed for U.S. investor sentiment, fear appears finally to be losing ground. Individual investors are doing more stock trading. Mutual-fund companies are seeing money being put to work in both stocks and bonds. Advisors say they are hearing from investors who had been hunkered down for years but now are feeling more comfortable that another big meltdown isn't lurking around the corner. That doeasn't mean greed has completely replaced fear. But as the worries that have dogged investors since the financial crisis finally begin to ease, a greater engagement in the markets could help stocks continue their grind higher. I think we are seeing fear fatigue. And last week, Bel Air heard from another client who had been invested completely in bonds for the past five years. He is now moving 25% of that money into stocks. It is still very early in the shift away from fear. With individual investors' allocation to stocks at 30-year lows, and stocks having been liquidated in favor of bonds for the last five years, there could be a long runway for money to return to stocks and drive prices higher. One of the most visible signs of investor' greater confidence in stocks is how subdued the CBOE Volatility Index, known as the VIX, has been."

I think I'm going to cash in my HNZ today to raise cash for some sweet buying opportunities. There won't be any competing bids so I'll take my money now along with my profit.

 

[Birchtree]

Mindylou says c'mon boss let's spread a little bull manure around today. "As in the 1970's, the next cyclical bear is not likely to be as severe as the last two, (2012), and usher in the next secular bull market. How can we be sure that once this secular bear ends and the next secular bull market begins the Dow will soar to 50,000 and above. Because in each of the secular bull markets of the last 110 years, the Dow has gained 500% to 1000%." The important thing is that we're starting to see money move into the financials which is an indication of a real bull to the upside.

 

[Birchtree]

The HNZ has been liquidated to cash for +28K and if I can see a little give up on the VIX I'll get to spend money real soon. So many wall flowers to save I feel like an evangelist - but the word is bullish.

 

[MrBowl]

Well, that pattern failed...

I forgot about that one. It was interesting at the time, but I mostly make my IFTs these days based on the news-driven-market. I'm glad I'm humble enough to not get married to a pattern or strategy.

I bought in on the second day of the year (missing out on the best day, Jan 2, but I felt the risk on the previous Friday was a bit high so I shouldn't beat myself up too much over it).

At this point I plan on riding out the sequestration, but I might change my mind on that, too ;-)

 

[MrBowl]

The HNZ has been liquidated to cash for +28K and if I can see a little give up on the VIX I'll get to spend money real soon. So many wall flowers to save I feel like an evangelist - but the word is bullish.

Birch, I hope your acquisition of HNZ wasn't one of the pre-announcement deals from last week that the SEC is looking into ;-) J/k, I bet you've owned it long-term.

 

[Birchtree]

I have owned HNZ back into 2010. Now is the time to nibble and graze for a buying bull - diversify rather than feast. Cash may seem like the greatest refuge but when a market abounds with bargains, it represents the sirens' lure. I have 11 dividends rolling in today. The SPX has doled out an uninterrupted advance of 8.0% since late December. If there is extreme positive liquidity to accompany a technical buy signal, history shows that on average there's a 6 month price rally of 18.5%. So we got more to go.

 

[Birchtree]

The Ticker Sense bloggers sentiment poll - bearish at 48.86% and bullish at 21.43%. No rip currents here. It's safe to wade.

 

[Birchtree]

I'm doing some nibbling on intraday weakness: HNR, CTL, CLF, MAS, BAC, PHM. But the wall flower list is long and unending - I'll be back.

 

[hotwings]

I'm nibbling on BAC too...and will hold until it reaches at least $30.