Dave's Account Talk

[Dave M]

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Today I addedfive points in the I-fund to the menu.I know, not a big move but who knows anything about the I-fund? To most of us it is a mystery. I'm pretty sure the fiver will do better there than in the G-fund, therefore I bought. I am now 70G 5F 10C 10S 5I. I'm everywhere!

I'm gonna make 4185 my stop-loss. Let those who feel differently, do differently.

Dave

 

[Dave M]

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We had lots of news this week that turned out to be mixed and so there were no big moves in any direction. We closed Friday at 4284, +13 for the week. This slight uptick continues a flattening trend that began a couple weeks ago, it is now apparent.

There may not be much further profit to take if this goes on. In other words, can it hurt to take profits now? (The quarter is ending in a couple weeks, too.) And yet...because I am not certain what to do, I shall do nothing for coming week. Maybe some good news will turn up.

My adventure in the I-fund has turned out to be pretty painless so far. Combined with my small holding in the F-fund, 750 shares, I am spread across the board with 70G 5F 10C 10S 5I andI like the feeling this gives. Good Luck!

Dave

Oh, I will advance the stop loss to 4200.

 

[Dave M]

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I did some more figuring over the weekend -- on night shift and the weather is quiet for a change, no hurricanes on the radar. I am able now more closely to estimate the change in my account during the 2nd Quarter, and I think as of today Istill show a small net loss for the year.

With two weeks to go before Q2 ends, now might bea good time to make a play. We have important news coming this week. I expect it to be mixedresulting in a mixed outcome. But it might be interpreted by the market as a whole, aspositive. Therefore I will be paying close attention on a daily basis and looking for the chance to increase my position. If I sense a big day, I might gamble!

Dave

 

[Guest]

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Hope it works out for you.

Enjoy the down time. Read that this hurricane season could be worse then last year if historic patterns hold.

 

[Dave M]

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I'm not too keen on historic data wrt hurricanes.I have a hard time believing that last year affects this year -- each season is distinct. Now, there might be a plausible physical mechanism that makes any two consecutive seasons similar. If so, I want to know that mechanism; the statistical correlation is largely irrelevant to me, down here in the trenches at the operational level.Give me something I can point to on my weather map!

But back to the market. We have had two days of modest gains based on no news (Monday) and mixed news (Tuesday). More news is coming tomorrow. Assuming it will be mixed,what are the chances of a big day Thursday or Friday?

I need to resolve that question before noon Wednesday. It sure would be nice to end Q2 with a coup!

Dave

 

[Guest]

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Triple Witch Monday.

Market is heavily shorted.

When will the shorts squeeze happen to square up prior to trip witch expiration?

Short squeeze today in GM and walmart. You see what they did. I flipped went long and am short WMT again. Because I like pain too and it is real dud of a stock. What went down was the retail sales stank and people got greedy and started to square up and caused a chain reation of short covering. Lots of the hedge fund guys are still underwater for the year and if they can get .3 or .5 here they are going to take it and screw the rest of us cockroaches.

Right now it is like a gun fight we are waiting for the big guys to blink and try to kill them first.

I am chained to my level ii right now waiting.

However, with the TSP restrictions I would not want to try to time the short squeeze. That is just my HO. G fund should pay .01 tomorrow. I am thinking short squeeze will happen on Thursday......not sure since people are quietly exiting the areana now.

Hope that makes sense? This board keeps timing out on me. I wrote this three times and each time it makes less sense. :shock:

This is another poster that here that thinks the Walmart action today was heathy. :shock::shock::shock: I just told you the reality. Buyer beware.


Oh yeah if you take GM and WMT out of the Dow and S&P 500 the market was down pretty big today. He called it a good rally. Short squeeze, low volume bounce. Hardly any shorts on GM and WMT right now. Hmmm. What is going to happen???

 

[Dave M]

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Okay, DMA, now say it again in English. Use subjects and predicates, speak plainly in complete sentences -- with no smiley faces.You seemed to become distracted. Or perhapsEnglish is your secondlanguage?

What should we look for Wednesday morning to tell us Thursday is going up 20+ S&P? My first thought is, if the economic news is nothing major, and the market just sort of meanders, then by Thursday the reality will set in and a climb is possible. On the other hand, if the news isgood and a big rise gets underway Wednesday morning, then it shall be too late to join in, probably.

Dave

 

[Guest]

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Dave - like I stated I was getting timed out. I rewrote that three times.

I am speaking in English that is clear to me. English is not my second language, thanks for asking.

Anyway good luck. Hope ya all the best. I ain't taking the bait this time.

 

[Dave M]

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I checked in at 1100 AM and saw what I did not want to see -- an overnight spike in oil prices. Thishad the usual effect on stocks and the S&Pwas down 3. Had it been up 3 I would have bought some more C&S, on the mixed but generally good economic news which came out this morning.Had it been up 10 I would have held.

Now I feel I must protect recent gains. Remember I am still making up for Q1 losses which were severe, and that has been tough in this market. Now I want to see just a smallmovement today -- up or down --then I will wait and see a while, a short while.

100G cob today.

Dave

 

[Dave M]

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We got our small movement today. Mon-Wed totals up to about 8 points overall. Now to watch tomorrow's action, from the sidelines. If it looks safe to do so, I will buy back inFriday.

Now I am toying with the idea of buying an equal number of shares in each fund. Onethousandshares each wouldgive me 67G 7F 8C 9S 9I, roughly. With a nice even number such as 1000, it would be easy to see where I stand -- $10 for every penny change. And this allocation is right about at my risk level.

Dave

 

[Dave M]

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We bounced right back, didn't we. I may have managed to avoid the best day of the week (today), my usual result. TodayI rebalanced to 67G 7F 8C 9S 9I.

This should work out to right around 1000 shares of each. Percentage-wise, it looks a little heavy in the I-fund, that will bear watching. Good luck everybody!

Dave

 

[Birchtree]

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DaveM,

I'll have to figure that amount up - still looks like ample powder to light a good fuse with. Blow yourself out of that shelter - you watching the courage our guy Mlk-man is displaying. Awesome - it looks like commodities are back - another consolidation day with good A/D line. We will break one way or the other - my choice is up. The big question is when - you'll have to hustle and light that fuse. I don't mean to badger or promote - it's only I'm lonely.

Dennis

 

[Dave M]

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What I am going to do is go through my records and see just how much money I have contributed over the years, how much is matching, and how much is growth on the whole kitty. This will show, I believe, that the portion of the total balance in my account which actually came out of my pocket, is about 1/3 of the total.

Then I am going to take that number and work up a rate such that, had my money been placed in a passbook account bearing x-percent interest, the balance would match the actual.This will show, I believe, that I am getting something like a 20% per year compounded return on my investment. The govt matchwould be accounted for in that percentage.

The point is to show just how much of my capital is my own, and hence worthy of preservation absolutely;how much of it ismatching-money, what would be called "found money" in my family, and hencepreferred for use in the riskiest investments;and finally how much of it is pure earnings, foruse in ordinary investments.

I will have a better idea of what exactly I am risking by beingin the market. I could put "my" money in the G&F-funds, govt matching money in the I-fund, and the rest in the C&S-funds.

I'll probably never do as you and MM do -- put 100% into any one fund unless it is the G-fund.

Dave

 

[Dave M]

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This was a week to remember. Multiple batches of important news were released; the oil market was volatile;options were expiring;it was all in near-equilibriumand resulted in a smooth five-day climb. We closed at 4374 today, up 90 points from last Friday's close of 4284.

It was a very good week therefore. Unfortunately I dropped out Thursday and missed 17 of the 90 points.I only did that because of uncertainty, and the feeling that a down-day was due. Look back at Wednesday's allocation changes in the various account threads -- a lot of uswere going to the G-fund including our host, Tom. It made sense with the way the year has been, real choppy, remember?

But I lost that feeling quickly with Friday's result, up 47, half of the 90 points for the week. And the G-fund paid a penny, too! How sweet it is!

This weekend is time to ponder the YTD situation, and evaluate the question: does the market represent reality at this time? I think the stop should be brought forward to 4300 but that might be high. I stand 67G 7F 8S 9C 9I. Good Luck!

Dave

 

[Dave M]

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Funny the way it works out -- this was a week to forget. A spike in oil to $60 upset the fine balance. In the absence of countervailing good news, or good enough news, our index slid 73 points to 4301 at theclose.

So the answer to last week's question was yes, but the reality shifted during the week which resulted ina sharply downward market reaction.We reached the stop of 4300andtoday I sold.Istill show a profit for the period starting May 26 when I boughtin, but about a third less thanon Wednesday, heh. I had fun in the I-fundand sometimes it showed large upward moves, something to keep in mind.

I will probably stay in cash until the quarter's end unlessa sea-change occurs. Many on our board think this unlikely; all we can do iswait and see. I remainoptimistic for the year butfor now I am 100G. Good luck everybody!

Dave

 

[Dave M]

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This was a difficult week to judge in advance. The markethad important news from the Fed, volatility in oil, and other economic news to digest. The result was a narrow gain. We closed Friday at 4321, up 20 from the previous week's close of 4301. I had voted neutral in our weekly poll.

Since the final two days of last week were so dreary, on Friday the 24th I sold out to G in order to preserve the Q2 gains I had managed. Then by Monday it seemed that the F-fund was the best place to be, as it had registered the best performance of all the funds since Jan 1. So onMonday the 27th I bought a couple thousand shares at 10.70. Then on Friday the 1st with the end of the quarter I felt it was time to re-balance for Q3 and went 10F 9C 11S 3I 67G.

This is a slight change from my last 1/3-2/3rds allocation. I decreased the I-fund and increased the F- and S-funds. Note that today the S-fund is within 15 basis points of the I-fund and is looking like it will overtake it soon. Evidently small-cap companies are liking the current interest rate environment, while the dollar isdoing too well lately.

Here is my estimate of my performance in Q2 -- plus 1.5% on the total balance, afteraccounting for my cash contributions.I never had more than 1/3 of mytotal invested, so the performance on what I actually had instockswas more like 4-5%, not bad. I think that for the year I am still slightly negative.

These last six months have been enlightening for me. For the first time I took over active management of my portfolio, for which I thank you, Tom. Until now I had just let things ride. Yet I made many poor trade decisions in Q1. I can seethat I was deeply ignorant and had much to learn. I thank everybody here for helping me albeit all unkowingly, including you DMA! Myimprovement in Q2 shows that I am now better in-tune with events, but of course the market was much better wasn't it.

I have pretty much established my risk tolerance at 1/3rd. Now I have also worked out a decent mix of the funds. Diversity is best, I think. I am mostly in the two big gainers on the year, F and S, withC and Ithere to round things out. My intention is let it ride unless disaster looms. (There are plenty here who think it will, too.)

At this stage I think I will continue to pay attention daily, but post here monthly rather than weekly. Like a garden, it must be left alone to grow. You can kill it with "kindness" (= too many ill-timed trades). Good luck everybody!

Dave

 

[Dave M]

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Thank you everybody for your expressions of sentiment. Hurricane Dennis passed about 70-80 miles to ourwest but still raked the islands. Our peak wind was 74 mph at the airport weather office wherewe had salt water on the runway. Thepower was out at my home for 24 hours -- got a chance to fire up the brand-new portable generator.I toured the city this evening and saw a few trees down, lots of limbs down, debris everywhere. She looks a little bedraggled.If this is a near-miss, I don't want to have anything to do with a direct hit.

"If we sell, the terrorists win." I am content to leave it at that.If such acts arethe result of ignorance, as has been said elsewhere, then I'm pretty sure that education would be a better antidote than further violence. On Friday I said a short prayer for London, kept my mind on my radar, and was gratified to see the market's positive response. A tax-deductible charitable contribution to the International Red Cross is brewing.

On the first of the month I put exactly 1/3 of my kitty in the market with the intention of letting it ride for a month.Today the percentage in G is down to 66.92 AND there has been another contribution, which all goes to G in my case. Therefore my gains for July sofar,have essentially doubled my rate of contribution,a useful yardstick. Think back to January; they were taking money away from us...ugh!

Good luck everybody.

Dave

 

[Dave M]

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Q2 statements have come in. I had a nice turn around from Q1, which was a disaster for me.

I had Q2 earnings of 1.7% on mytotal balance. During the quarterI usually kept most of my $$ in the G-fund and had only10% or 20% invested in the the stock funds -- had to be careful --so my return on the amount invested was more like12%.

Over the last four quarters I have have increased my total balance by 15% with earnings comprising 5% and contributions 10%. That stinky Q1/05 is going to be a drag on the numbers for quite a while.

July is shaping up to be very profitable. Even with the headwind ofhigh oil, advances have been very regular so far. I may increase my exposure on Monday, taking what I can get whileI can get it. Currently I am 2/3G 1/3FCSI. The next step would be 1/2G 1/2FCSI; I'll have to think about it, may wait another week.

Good luck everybody.

Dave

 

[Dave M]

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An error crept in to my calculations above. I should not count my earnings from the G-fund as part of my investment earnings, should I. That takes away 3/5ths of the total and I recomputethe Q2 earnings fromthe stock funds asabout 5% to 5.5% on the amount invested.I was having trouble figuring out how the heck I earned 12%!

At present I have all my contributions going into the G-fund. I think that rather than re-allocating more money into the stock funds, I will re-directmy contributions into the stock funds. This will enable me to increase my exposure ever so gradually:I will not have to sell in order to buy, as would be the case were I to change my existingallocationpercentages. In other words, my basis remains mostly intact this way.

The question is, how should I direct my contributions? Into which funds should they go?To start with, since I have at least some money in each fund, I incline toward25% each into FCSI. The more I think about it, the more I like that idea. Monday morning, that is what I shall do.

Dave

 

[Birchtree]

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DaveM,

If I were the reckless type I recommend 75% C fund and 25% I fund and not look back until the end of 2006. That way you don't worry so much - leave your destiny to fate.