Dave's Account Talk

[The_Technician]

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No Dave I'm not....H.....whoever......but I'm an electrical engineer......I have a minor in math....some math I wish I hadn't seen.....gees.....:?

But in the mid 80's I theorized you could control the economy with control system theory and differential equations.......it turns out years later (1990)in a discussion with one of my professors that the Sec of Treasury was implementing such a system.....since I understood it by my nature.....I predictedGreenspans moves while he toned down interest rates.....through the 90's...now he is looking for modest growth.....stability is key....

The thing that bothers me the most is the instability that Congress created by dropping our economy to go worldwide in an unstable manner in the later 90's (NAFTA).....just to make moneyfor a few....now we have this unstable economy..........that's what control systems is all about....controlling stable output.....pending on mixing inputs to the black box....and they screwed it up......too much tooo soon.....

We will muddle through it....but math and control systems is where economy control isat....not some whim of a Congressman.......

Heck you can even predict Iraqi civil activity for the next 50 years with it....giving certain factors to play with....like our influence, price of oil, Iraqi participation, insurgent restrictions...etc....etc....etc....you just line them up based on the most influence...and adjust equationsssssss......

:dude:

 

[Dave M]

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Tech, I had a little trouble with your notation but I think I see more clearly now what you meant. Note the small size of the coefficients on the higher-order terms. If I was doing the Taylor's Series I would discard them by assuming X<<1. Principal Component analysis (http://www.cis.hut.fi/~jhollmen/dippa/node30.html) would reveal the improvement in R-squared resulting from retaining them, versus the reduction in the number of degrees of freedom (and consequent predictive ability). They tighten the fit but increase the chance of the curve flying off to infinity in uncontrolled fashion.

Regression analysis is fun. You can throw in anything you believe might be helpful, like the win-loss record of the Dallas Cowboys, if you want to. For example, consider

http://online.redwoods.cc.ca.us/instruct/darnold/laproj/Fall2001/Iris/lapaper.pdf

Dave

 

[The_Technician]

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Dave,

You should try to overlay the different curves......some give you more sensitivity, while others give you steady direction.....works real well.....its not so important as to the R squared (since you have some general idea) as it is to the current direction trend.....

Of course you also must know where the curve you are analyzing comes from......for that data tells you alot about the future....say like interest rates, energy costs, productivity etc etc...on the S&P curve...

Its all very interesting....but the weather is much harder...unless you start classifying/sorting your data like in El Nino conditions....and so forth....of course some people who have experience have seen it before and they assimilate the conditions automatically....to derive what is coming next.....sort of like a RISK computer....

:dude:

 

[mlk_man]

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You guys might find this interesting: http://www.fool.com/news/commentary/2005/commentary05051108.htm?source=eptyholnk303100&logvisit=y&npu=y&bounce=y&bounce2=y

 

[Dave M]

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Hey MM, I'll check it out later today.

Jusy now I put some more money on the table and went 80G 20C for tomorrow. Every week we have one good day and we haven't had one yet, so now I'm ready. Oil is down, corporate earnings are decent overall, Ford and GM are now old news -- we are ready for something.

If we do get a bounce tomorrow, I may retract this additional 10% immediately. Venturing cautiously again, heh.

Dave

 

[Dave M]

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I went back to 90G 10C this morning, will be in effect Monday.

I think this will be my basic allocation for a while, andfrom time to time I will vary from this. I started the year 60/40 and took some hefty losses which I am still making up so I have to be careful. Tuesday's 1% drop did not help! Now today I need 1/2% just make up for that since I am 20C until the close. So a rise above ~7 points in the S&P is what we want to see today. Good luck everybody.

Dave

 

[Dave M]

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I mis-spoke above. I started the year 40G 30C 30S, went to that in October '04. That's why I did so well in the 4th quarter, made over $10K in earnings. So I guess I am still ahead, even considering recent events...

...such as this week just ending. We closed last Friday at 4197 and closed yesterday at 4112 for a loss of 85 basis points in the C+S+I all-funds index. This means we are absolutely flat overthe last four weeks, and about where we were in late November last year. Yuck.

It seemsthis coming week will be very important for our long-term health. We have not had two down weeks in a row since 3/18 to 4/1; since then it has been one up one down, one up one down, one up one down.If this next week is down it will look on my graph like a continuation of a slide which began 3/7 and just make that trend more dominant.

Finally, this week I jumped in with 20% when I ought not to have. That erases my recent good luck. I have learned the same bitter lesson learned by all who attempt to time the market, heh. Luckily my good sense kept me at 20% and not 100% like some. (Although my20%is a pretty hefty dollar-total. I've been putting in for 20 years, remember.)

This week I am still in for 10% and still plan on staying there for a while. If this weekgets going positively, I may increase my allocation. Good luck!

Dave

 

[Dave M]

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We had the best week in a long time, didn't we. We closed today at 4217, up 105 from last Friday's 4112 in the C+S+I all-funds index, a gain of 2.5%.

A number of things came together this week -- drop in oil, decent earnings, decent consumer and producer price indexes, stronger dollar -- maybe justpent-up demand for stocks coming from money that has been sitting on the sidelines.

I did not put in any more, rode it all with just 10% invested. Nervous Nellie I guess. Still it was a nice gain and I'll take it. Here's to another good week, good luck!

Dave

 

[Dave M]

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Investing is once again an enjoyable pasttime. This week we closed at 4261, up 44 basis points from last Friday's close in the C+S+I all-funds index.

This makes three weeks out of the last four that have been positive, and today we stand very close to where we were on Jan3 (4272). It means thatwe have erased most of the losses for the First Quarter and are readyto resume amassing wealth.

This week I entered the market 25% and my intention is to remain invested to this extent. I placed 10% each in the C- and S-funds, and put 5% in the F-fund just for kicks. So many of us have gained little or nothing in the I-fund, I have decided to leave it strictly alone. In fact, the I-fund has been a drag on the index; I haven't calculated it but I bet the C- and S-funds combined areshowing a profit for the year.

Now what we need is for oil to remain under control, inflation to stay chilled, andproduction/consumption to hold steady. These would sustain positive sentiment all will agree. We can expect bumps and surprises, but I see little to keep us from realizing some nice gains over the next six months. Good luck everybody!

Dave

 

[Spaf]

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Dave....Nice to hear your optimism. Them bears were getting to much! Rgds! Spaf

 

[Guest]

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Dave M wrote:

Investing is once again an enjoyable pasttime. This week we closed at 4261, up 44 basis points from last Friday's close in the C+S+I all-funds index.

This makes three weeks out of the last four that have been positive, and today we stand very close to where we were on Jan3 (4272). It means thatwe have erased most of the losses for the First Quarter and are readyto resume amassing wealth.

This week I entered the market 25% and my intention is to remain invested to this extent. I placed 10% each in the C- and S-funds, and put 5% in the F-fund just for kicks. So many of us have gained little or nothing in the I-fund, I have decided to leave it strictly alone. In fact, the I-fund has been a drag on the index; I haven't calculated it but I bet the C- and S-funds combined areshowing a profit for the year.

Now what we need is for oil to remain under control, inflation to stay chilled, andproduction/consumption to hold steady. These would sustain positive sentiment all will agree. We can expect bumps and surprises, but I see little to keep us from realizing some nice gains over the next six months. Good luck everybody!

Dave

Hi Dave,
Wish I had you as an advisor during the last 4 months. I haven't been able to make up any of my losses since the beginning of January.

Question to you Dave and anyone else who would like to chime in >
Is Oil the most significant factorfor determining the performance of the I Fund as we move forward into 2005?
Thank you....

 

[Spaf]

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Wonder Woman wrote:

Question to you Dave and anyone else who would like to chime in >
Is Oil the most significant factorfor determining the performance of the I Fund as we move forward into 2005?
Thank you....

WW...Oil/Energy has been a bad horseman for the past year. It plays on the economy like a disease! Krude is very vengeful and can rip the market apart!

 

[mayday]

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WW The I Fund tricky little devil. I was looking at some of the history and saw that most of the time this I Fund went up after a holiday when the market was closed on Monday. Why would this happen? Gas makes me belch.

 

[biggdog1]

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Wonder Woman, I must apologize for mayday's problem. I work with him and he really is a nice guy although it's true he is a little gassy. As far as Krude, yes I think OPEC has us by the camel hairs and it's going to go :}and:{until we take up bikes like the rest of the 3rd world.

 

[Dave M]

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WW, I'm surprised at you. From your previous remarks I came to believe you have a substantial sum in your account. You could never have gotten there without being agressive for years.Now you seem to besaying you have mostly missedout on the rises of the last month or so (otherwise you would be healthier). Have you come todoubt yourself?

If anyone lacks aggression in their allocations, it is I. I am working hard at putting money INTO my account, maxed-out all the way including over-50 catch-up -- the total contributionwill be somewhere around $20k by year's end.I just hate it when they take that money AWAY from me.

For this reason I have been very trepidatious lately; my usual investment has been 10%, sometimes 20%. I cringe when others say "going 100% C" or whatever. The point is that even though I have taken it slow, the profits are adding up, 500 here, 150 there. Yesterday I made $5 on a 1-point rise in the F-fund, hooray! Our next quarterly statement will give us the bottom line, but as I said, I think the fiver I lost Q1 has been about recouped.

Unfortunately I am on duty this holiday and cannot participate in any Memorial Day activities, parades and cookouts and such. So here I saluteall those who serve today andhave served in the past. (A sloppy salute; I was not a very goodsoldier.) BTW, I have purchased my military time for retirement purposes, a very good investment which I recommend for you if you are eligible.

Dave

 

[Show-me]

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Dave,

Excellent point about the buying back military time. I think it’s the first time I’ve seen it posted on this board.

The sooner you buy back you military time the better. After three year they charge interest on the balance. At least that was the case for the USPS. Simplest thing one can do if you are a new Fed employee is to figure up the number of pay periods until they start charging interest. Then divide that into what you owe for the buy back and set up a allotment. That way it doesn't hurt a new employee’s pocket to much and you can pay it back slower and interest free.

My advise is do this as quick as possible. I know of many vet’s that have 10 years, 20 years, or are ready to retire that have not started to buy back their “time”. “I’ll worry about it later.” Later comes quicker than you may think.


[align=center]1% of your high-3 average pay
times
years of creditable service[/align]

[align=left]Four years military time equals 4% more retirement money and in some cases a sooner retirement.[/align]

Have a good weekend!

 

[Guest]

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Dave M wrote:

WW, I'm surprised at you. From your previous remarks I came to believe you have a substantial sum in your account................ Dave

[suP]Not from my remarks, Dave. A couple of peeps inappropriately, I thought, 'guesstimated' how much $$ I might have after that difficult period I had on this board. I took a lot of heat by stating how much I lost. Lessons learned: I will never do that again![/suP]

[suP]Back to my original question restated > Is oil the most significant factor in determining how the I Fund performs?
Thank you....

[/suP]

 

[Guest]

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biggdog1 wrote:

Wonder Woman, I must apologize for mayday's problem. I work with him and he really is a nice guy although it's true he is a little gassy.......

[suP]mayday, biggdog1, Looks like we have a new set of comedians on the board. Welcome and I appreciate both your humor and your response.
Spaf, thanks to you also.........

[/suP]

 

[Birchtree]

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Wonder Woman,

Why do you have to ask such difficult questions? Yes it is a complex question but I will try and give you an understanding of the oil and I fund connection. There really isn't one - that was simple enough.

Please use a larger font when you post - I can hardly see what you wrote.

To the oil question in a moment - but first let me say that in my account talk I mentioned to participants I gave up $138,000 in my private account from 3/7 to 4/20 and no one has yet decided to try and put my feet to the fire. Perhaps they just feel sorry for me leaving the wounded bull alone to his own demise. But heck I'm already on the come back trail - and alot of my recent gains have been due to the price of oil increasing. The hedge funds are buying commodity stocks again. The sp500 has only a 7% position in energy - I certainly wish for .

 

[pyriel]

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Birchtree wrote:

Please use a larger font when you post - I can hardly see what you wrote.

I agree. It is hard to read.