Dr Faustus's Account Talk

[BlueMax]

A very interesting day indeed.

I will remain in the F fund today ... probably tomorrow as well, depends on what the charts tell me.

Dan,

I spent more than 16 hrs this weekend pouring over every financial chart and article that I could find; My conclusion, I want to remain in the "F" for a few more days if not weeks. If you do make a change, will you share what you see to drive that change? Preferably in time for some of the rest of us to analyze and react to the IFT deadline?

 

[presskh]

I was watching CNBC yesterday, I didn't get the economists name but he had some things to say that I found interesting. His basic comments were that recessions happen. They have been happening for years uncontrolled or unchecked until recently. That they are actually good for the economy in the long run. He likened it to a forest fire. That it clears out the underbrush and the dried out, half dead trees to make way for new growth. A recession forces out dying and poorly run companies that drag on the economy and opens the door for new companies to fill the void. Let whatever recession comes along and let it run it's course. We will be better off afterwards with a stronger, revitalized economy rather than fight it and watch the dollar devalue and oil prices skyrocket.

I wholeheartedly agree with his assessment. Also, this "forcing out" of poorly-run entities also applies to homeowners who made either stupid or "gambling" choices with regard to financing their homes. If the government bails out these people, then it only reinforces this behavior by negating any downside risk and punishes people who acted conservatively with their finances.

 

[DrFaustus]

Dan,

I spent more than 16 hrs this weekend pouring over every financial chart and article that I could find; My conclusion, I want to remain in the "F" for a few more days if not weeks. If you do make a change, will you share what you see to drive that change? Preferably in time for some of the rest of us to analyze and react to the IFT deadline?

I try to do that Blue, but sometimes life/work intrudes or worse, I just plain forget. Mostly my decision to get out of a fund and go back to G is based upon a "stop loss" kind of decision. But I don't stick to a single price point for the my stop-loss decision - I like to lock in gains. So as the price of a fund I'm in goes up, my stop-loss point goes up as well.

Then it becomes a guessing game as to whether the fund will hit that price point at the end of the day. I try to see where the markets are going around 11:30 eastern but I am not always able to do it.

Here's an interesting insight into trading psychology I just read in "Getting Started in Chart Patterns" by Thomas Bulkowski.

paraphrasing:
"Suppose you have the choice of selecting one of two doors. Door 1 holds $500, Door 2 holds either $1000 or nothing. Which do you choose? Next, consider another two doors. Door 1 means you owe $500, Door 2 means you owe $1000 or nothing. Which do you choose?

For the first choice, most people will select the $500 gain, but when it comes to losses, most will select Door 2. In the investment world, that means they cut their profits short and let their losses run - exactly the opposite of what they should do"

Hope you find that as interesting as I did.

 

[Hallatauer]

If the government bails out these people, then it only reinforces this behavior by negating any downside risk and punishes people who acted conservatively with their finances.

This is one of my biggest beefs. I am a responsible homeowner. I paid about 15% down on my first house and had a money reserve for emergencies. My second house I was able to put down almost 50% due to the equity built up in the first house. I have never missed a payment, whether mortgage, home equity loan or car loan. NEVER. Now people who were dumb, scammed or the companies that pulled scams are getting away with it and who foots the bill? The responsible homeowners and taxpayers.

One story that gets my goat is this one...
75 year old man, retired, small pension, about $30k a year, bought a $550,000 house, no money down, 110% mortgage. Read that again 110%!
He moved in and never paid a dime. 18 months later he was foreclosed and evicted by the sheriffs dept. Who gets in hot water for this? The company that gave him the loan? Nope, they sold it off to another entity who is now in dire straights with a property that it can't move.
The old man and the originator of the loan walked away scot free. They should both be in prison for perpetuating fraud.

</rant off>

 

[Silverbird]

What upsets me is: 1) The loan brokers could write up anything they want, make money for making any old loan, sell it, no risk. 2) Ratings on "any old mortgage loan" don't matter, the loans were mixed in with others with some computer program and the rating based on that. 3) Loan sold to the next sucker as AAA and those poor sots with their loans packaged by the computer program find their loans are downgraded too.

No risk to lender, risk after sale based on some programming fun, bad stuff mixed up with good loans and called AAA. No risk, make money = too easy. And for those of you who say that we should read every loan document, the ones for my house were 3" tall and without my lender explaining them I wouldn't have understood what I was signing. I had an ethical lender. Some of these borrowers got "Don't worry, be happy." And I'm glad I didn't get a home equity loan.

 

[mamikin]

I was watching CNBC yesterday, I didn't get the economists name but he had some things to say that I found interesting. His basic comments were that recessions happen. They have been happening for years uncontrolled or unchecked until recently. That they are actually good for the economy in the long run. He likened it to a forest fire. That it clears out the underbrush and the dried out, half dead trees to make way for new growth. A recession forces out dying and poorly run companies that drag on the economy and opens the door for new companies to fill the void. Let whatever recession comes along and let it run it's course. We will be better off afterwards with a stronger, revitalized economy rather than fight it and watch the dollar devalue and oil prices skyrocket.


I am no economist, but I think this is a very astute observation. A recession would be part of the normal business cycle. What would make it different this time is that it wiould be largely world-wide, with the global economy. Maybe that is another reason for not officially recognizing what so many of us suspect, that the recession is already here?

 

[love-to-bike]

There’s been quite a bit of discussion in various member’s Allocation Account talk threads about the threat of restricting members to mail only changes if a certain number of IFTs are exceeded in a given month. Like most, I scoffed at this – believing, as many did, that this would take too long to implement. Let me tell you what arrived yesterday via certified mail….

I got a letter from the Executive Director (Gregory T. Long) of TSP stating that because I had exceeded the number of trades in February, as of March 31st 2008 I will no longer be able to post trades electronically. All further trading will be done via mail. They were so kind to enclose 3 envelopes to assist me.

So you may want to rethink your strategies – you may be getting something soon if you don’t. I live in the DC area so perhaps I got my letter earlier than others. I’ll be curious to hear what happens to others. BTW, I probably made around 6 trades in February.

I won’t be sitting idly by, calls will be made and I’ll follow up with my local reps (I’ve already sent something to my Senators and Representative last month, we’ll see what happens now.

BTW, I subscribe to several different member threads so I am cross posting this message in those as well – sorry for the duplication but I think you should be aware that the threat was not idle.

 

[Hallatauer]

Yeah, I've read this on someone else's thread. If I get one, I'm aking a copy of it and a copy of Fed Register where it states I can make electronic IFT tranfers once a day and forward it to the Attorney General's Office. They are blatantly violating the regs.

 

[Asylum]

Yeah, I've read this on someone else's thread. If I get one, I'm aking a copy of it and a copy of Fed Register where it states I can make electronic IFT tranfers once a day and forward it to the Attorney General's Office. They are blatantly violating the regs.

i smell lawsuit over this... i dont know if it will be sucessful, but it will slow it down perhaps... just look at NSPS.

 

[DrFaustus]

I got a letter from the Executive Director (Gregory T. Long) of TSP stating that because I had exceeded the number of trades in February, as of March 31st 2008 I will no longer be able to post trades electronically. All further trading will be done via mail. They were so kind to enclose 3 envelopes to assist me.

Thanks for this update, LtB. I saw where FuturesTrader got the same letter. As I didn't get a letter initially, I'm not sure where I stand on that - but I've been trying to operate as if I were under the restriction since the beginning of the year. It hasn't been easy.

 

[crhuss]

Hey Dan, as I looked at my total trades each month since january, i am within the two or three trade limit for Feb and Mar...so far. I'm in the F fund and am just about out of the hole for this year. i am concerned about the 18 March meeting. Are you going to bail on monday am for Tuesday or are you going to tuff it out and see what happens?? What happened on the last rate cut that was not what the market wanted?? Did the F fund drop along with the stocks??

Let me know OK.. I am out of town and only have access to the internet infrequently. I have to go to Burger King or Mcdonalds to get on it thanks,

Craig

 

[DrFaustus]

Hey Dan, as I looked at my total trades each month since january, i am within the two or three trade limit for Feb and Mar...so far. I'm in the F fund and am just about out of the hole for this year. i am concerned about the 18 March meeting. Are you going to bail on monday am for Tuesday or are you going to tuff it out and see what happens?? What happened on the last rate cut that was not what the market wanted?? Did the F fund drop along with the stocks??

Let me know OK.. I am out of town and only have access to the internet infrequently. I have to go to Burger King or Mcdonalds to get on it thanks,

Craig

Hi Craig,

As of today (Sunday), I am looking to get out on Monday. But am not completely sure yet. If I go to G (which is what I usually do), this would complete my trades for the month under the new "rebalancing" rules. But I'm not sure what Ben is going to say or what impact it will have on stocks. ( I think I'm talking myself into going to the G fund ).

Have had a good run in the F-fund so far, made 12 cents and am hoping for more on Monday. We're above the +1 sigma line, which makes me want to stay in ... but I just can't say today what I am going to do.

I'll try to opine more tomorrow after having a look at the futures and which way the morning markets are heading.

Dan

 

[crhuss]

Dan, Thanks for getting back with me on a Sunday. I am getting a little anxious about Tuesday and just wanted to know what you were thinking. I am again in a Mc Donalds on Sunday night checking in to see if you had responded. I am not sure what my situation will be tomorrow and am not sure if I can get on line early enough to make the IFT move, so I really appreciate you getting back with me tonight. I am kinda leaning toward the G fund as well. But, like you said...this will be our last move for the month...so we have to be very careful and sure if that is what we are going to do. I don't have access to the futures, so I can't see what is going on for tuesday...ahead of time. My thought now is that the market will flip reguardless of the futures if Ben doesn't give them what they want. Anyway, I will look for your input tomorrow morning as early as I can...if i can.
Take care, and thanks again for getting back with me.

Craig

 

[DrFaustus]

I am going to 100% G.

The main reason is ... I just don't know what is going to happen this week. Could be a good day Tuesday if Uncle Ben gives the market what it wants. On the other hand, there could be a lot more bad credit news on the horizon. However, I do think we'll see a bottom to the market soon.

But I've made 1.00% in the F-fund as of today and, in this market, that isn't half bad. It isn't going to take me to 15% by the end of the year, but I don't want to get greedy ... and since I don't have a good feel for what is going to happen tomorrow, I am going to G.

This is the F-fund chart:

View attachment 3557

As you can see, we are above the +1 sigma line. Ordinarily, this would indicate that we should stay in the F fund until it looks like it going to cross back over the +1 line again. But, these are not normal times. Given what is scheduled this week ... I am going to go to the sidelines until I see how things shake out.

 

[crhuss]

Thanks Dan
I was able to get in to TSP.gov before noon and made my change to G fund also. Looks like we made money today, also...almost a half of a percent. The market is expecting 100 base points tomorrow and I don't think it will happen....but if it does, I don't think the market will react in a big positive way to it, anyway. who know...the market is not reacting normally right now.
I think we handled this last two week run in the F fund just about perfect. Thanks for your help.
Now we can rest easy no matter what happens tomorrow!!! Good deal.

Take Care,

Craig

 

[Guest2]

Boy Oh Boy, Does 5 days make a difference or what ?
From Bear Stearns to Uncle Ben, hold onto your seats
for tomarrow. This could get ugly (LoL).

 

[nnuut]

Boy Oh Boy, Does 5 days make a difference or what ?
From Bear Stearns to Uncle Ben, hold onto your seats
for tomarrow. This could get ugly (LoL).

Could disappoint or be an up day. Afraid of the earnings reports tomorrow but the FED will do good!

 

[Hallatauer]

Checked back for February.. I didn't get the latest letter baring electronic trades. I made just three trades. Into the C/S, to the F to the G.. just three trades... guess that made the FTRIB happy. And I didn't knowingly do it. Just have been transferring conservatively to avoid the volatility as I have been off the mark from Nov thru the beginning of January. I should make 4 transfers this month and see if they react. Then 5 if they don't. heh

 

[Wrngway]

I also only made 3 trades in February. They were all trades between FCSI. The 3rd trade was into F. I haven't received a letter and I live in the D.C. area.

I've done 3 trades in March now, but I don't plan on making any further trades.

I agree that this is very confusing.

 

[sdouglas3]

I traded using EBB's strategy during the times the board was referring to and I never have received a letter. In fact I was one of the 293 on that day in Oct that went all in the I fund and made a bus load of money. I still trade when I see an opportunity. Recently, I bought small percentages of funds while the market was going down and even again yesterday. No one has stopped my account yet.

So, I really don't know how they are determining who is in violation or not. Seems random to me.