ContrarianJeff's Account Talk

[ContrarianJeff]

Thanks, SB. Yes, I find it extremely helpful hearing what and why other TSPer's are doing with their accounts. I also like to type my thoughts here so I can go back and look at my rationale for making certain moves at various times. Hopefully, we can all learn from one another and grow our accounts together.

 

[Guest2]

Thanks, SB. Yes, I find it extremely helpful hearing what and why other TSPer's are doing with their accounts. I also like to type my thoughts here so I can go back and look at my rationale for making certain moves at various times. Hopefully, we can all learn from one another and grow our accounts together.

I couldn't have said it better !

 

[Steadygain]

Well, this morning's continued rise makes me think that we are due for a significant pullback (and it may begin today). My plan was to stay in equities through the end of March. However, we are so ridiculously overbought right now, that I'm beginning to think that we are going to have a 5% to 7% pullback--maybe more. Perhaps we will continue going straight up, but the S&P is up 15 percent in a little over 5 days. Weeks like this are rare, and we're at least due for a pause. I'm going to 100% G and locking in some gains.

Thanks so much for sharing and offering such outstanding advice.

You're doing GREAT - very well done.

This is, once again, a time when the limit on IFT's is essentially theft from the TSP. It's really disappointing, because I'd love to be out for a few days and get back in. But I'll just watch from the sidelines for the rest of the month. Best of luck everyone.

Boy can I relate to that - would have done anything to have gotten back in on this wave.

Still if we can lock in anything like this in the future - should end the year well over 20%. That would definately be something to tell the kids and grand kids about - as this Recession is bound to come up over the years.

 

[ContrarianJeff]

Congrats to those who had the guts to stay long in this market. S&P is up to 770 as I type--I didn't think we'd see that level today after yesterday's late selloff. This market has some serious strength.

 

[Steadygain]

Congrats to those who had the guts to stay long in this market. S&P is up to 770 as I type--I didn't think we'd see that level today after yesterday's late selloff. This market has some serious strength.

Jeff, you're a really good guy.

Don't ever be afraid to say:

'All of you BOW before me - for I am your KING'

cause none of us would take that wrong - or be offended - or think any less of you or think that's arrogant or anything else

we'd all be on our knees bowing - plain and simple

Enjoy it while it lasts

 

[Corepuncher]

Congrats to those who had the guts to stay long in this market. S&P is up to 770 as I type--I didn't think we'd see that level today after yesterday's late selloff. This market has some serious strength.

All it will take is for someone to say "boo." Then, we will all remember why it was we feared the dark.

We'll run out of reasons to buy very quickly, I think.

 

[mojo]

boo

 

[Corepuncher]

boo

Oh MOJO! Now you've done it!

But thanks..you are making my FAZ go back up

 

[ContrarianJeff]

You guys are crazy! :laugh::laugh:

 

[Eldritch Flatus]

Oh MOJO! Now you've done it!

But thanks..you are making my FAZ go back up

But he forgot to put it in quotes!:Big Grin

 

[ContrarianJeff]

It's been a while since I've posted (because I really have had nothing to offer). I've read many different ideas about investing (here and many other places), and I always enjoy learning. In that spirit, I thought I'd share something that has been helpful to me in this whole investing/market/timing issue. File this under "take it or flush it."

My investing practice starts with identifying a default position, and that is determined by whether we're in a bear market or a bull market. There are many ways to define this, but I simply use the slope of the 200 day moving average. If the 200 dma is up, then we're in a bull market. If it's down, then we're in a bear market. If we're in a bull market, my default position is equities (doesn't really matter whether it's C,S, or I--they all move together). If we're in a bear market, my default position is cash or bonds (G or F, but usually G). The only time I'll move out of the default position is if a lot of indicators that I use (risk/reward ratio) are pointing to a move opposite to the current trend (i.e., bull or bear). I only stay in that countertrending position for a short time, and then I go back to the default position.

For example, right now the 200 dma is still sloping down and it has been for all of 2009, so my default position is G (or F). I have only been in equities for a total of 31 calendar days in 2009 (out of ~207 calendar days). This means that my risk is very low. Of course, I will miss many big up days, like today. But it also means that I will miss many big down days. (My return so far in 2009 is 19.5%.) When the 200 dma begins sloping upward, I will return to C, S, or I as my default.

The "buy and hold" and the "dollar cost averaging" methods just don't produce meaningful gains unless we happen to be in a strong bull market. And in that case, everybody looks like a genius. (See here: http://globaleconomicanalysis.blogspot.com/2009/07/another-nail-in-buy-and-holds-coffin.html )
Anyway, I've found that this simple "default" method eliminates a lot of risk, a lot of stress, and my tendency to "fight against the trend." It has helped me tremendously. As I said--food for thought, and take it, leave it or flush it.

 

[Bullitt]

If the 200 dma is up, then we're in a bull market. If it's down, then we're in a bear market.

For example, right now the 200 dma is still sloping down and it has been for all of 2009, so my default position is G (or F).

200 DMA is now sloping upwards in the Nasdaq and S&P 500.

 

[tsptalk]

Has anyone noticed C-Jeff's return for this quarter? (http://www.tsptalk.com/tracker/tsp_admin_balance_returns.php)

Since July 1 (2.5 months), Jeff is up 22.54%. That's more than 6% better than the next person on the list, tataberto, who is up 16.3% in the 3rd quarter.

Nice job Jeff!

 

[Birchtree]

He could be #1 by the end of the week.

 

[msunner]

Interesting post, and your returns are impressive. Has anyone ever pushed the TSP to allow a return to day trading our accounts? They could charge us a fee for so many interfund transfers after the 3 we're allowed. Seems silly to have so much of our wealth tied up in a portfolio that allows very little room to manuever. Ever discussed this on your message board?

 

[Intrepid_Timer]

Has anyone noticed C-Jeff's return for this quarter? (http://www.tsptalk.com/tracker/tsp_admin_balance_returns.php)

Since July 1 (2.5 months), Jeff is up 22.54%. That's more than 6% better than the next person on the list, tataberto, who is up 16.3% in the 3rd quarter.

Nice job Jeff!

How would we know since you don't give prizes for quarterly returns? :toung:

 

[tsptalk]

Interesting post, and your returns are impressive. Has anyone ever pushed the TSP to allow a return to day trading our accounts? They could charge us a fee for so many interfund transfers after the 3 we're allowed. Seems silly to have so much of our wealth tied up in a portfolio that allows very little room to manuever. Ever discussed this on your message board?

Welcome msunner! They don't seem to want to hear us.

 

[coolhand]

Not to take anything away from many other good TSPers, but I've found that ContrarianJeff is one of the few "consistent" players on our MB. I think he understands sentiment very well and uses it quite effectively in managing his TSP.

 

[ContrarianJeff]

Hey guys--Thanks for the kind comments! (I don't post much on the MB, but I read a lot, so I was surprised to see my thread active.) I've had a nice run lately, but those are very rare. As coolhand said, I rely mostly on sentiment to make decisions, but I also use technical analysis and try to get a feel for patterns. (I don't care at all about economic data.) If you're interested, here's a post I found that does a nice job explaining essentially what I believe about trading:
http://carlfutia.blogspot.com/2009/08/here-is-first-of-two-post-by-fellow.html

 

[ContrarianJeff]

The current market situation is a good example of how I make trading decisions, and how ambiguous and difficult it is. I find it much easier to pick out market bottoms than tops, and it looks like we're in a short-term top right now. That's why I'm in a quandary. I'm expecting a pullback immediately for technical and sentiment reasons. Technically, we're overbought, and sentiment-wise, we're kind of neutral (not doom and gloom like we were the first of July or mid to late Aug).

Here is what gives me pause, though. Not only am I expecting a pullback, but everyone I read predicts a pullback or even a crash. Bears are still confident that we're headed for a crash--they see head and shoulders patterns and gaps and "dojis" and Hindenburg Omens, etc.--and they are cocky and happy to be short. Bulls, likewise, think that a pullback is needed for this market to be healthy. A Marketwatch article written by a bullish trader recently talked about the "inevitable" pullback. On the tracker, most folks are bailing to F and G. And I "feel" I should do the same.

But given the fact that everyone I can find thinks we are headed for lower prices (including me), I've decided to stay in stocks and see what happens. Nothing is certain. It wouldn't surprise me if we drop. But given the sentiment out there and the confidence that everyone has in a drop, it also wouldn't surprise me if the market just keeps going up for a while, or moves sideways for a time and then shoots up. I learned that lesson last year after the market bottomed in March. The market "should" have pulled back significantly in April, and that's what everybody I read was saying. It didn't, and I got left out of a huge rally.