FireWeatherMet Account Talk

[Boghie]

Here is the basis for changing my investment strategy this year (below).

In 4 of past 5 years the C or S fund (or combo of both) gets you into the top 10% of the tracker, with the S fund nearly winning outright once.

In the Bear year of 2011 you still would've finished in the top 3rd with the C fund, but more importantly if you recognized the Bear Market, then the F fund would put you near the top 10%.

View attachment 31882

So my NEW strategy is NOT to make a ton of IFT's. Its NOT just buy and hold, but hold for MUCH LONGER.

Of the several "tops" every year, 1 or 2 clearly telegraph themselves as crowns before dropping several percent. Catching just one and gaining at least 2-3% on the S or C funds then buying back in and sitting still for the rest of the year would allow you to to finish 2 to 3 percent ahead of the S or C funds. In 1 of the past 5 years you would finish number 1 and win the Tracker and in 3 other years you would finish in the top 3%

Ideally nailing the top 2 tops of the year could enable one to gain 4-8% on the stock funds and put you near the top every year of a Bull Market.
Question is...is this going to be a Bull Market?:notrust:

I'm having the same fault. Too much time in G/F... And, I always hold I - but, I always will...

Anyway, another way of thinking is not to bother trying to time tops and making quick trades to catch 5% or less moves but instead to avoid the obvious market dumps. That way you are in for a bull but bail on corrections. I am going for a bit more risk in my normal allocations and will just watch for moves <7%.

 

[pmaloney]

Really nice thinking! I agree and have fought hard to stop hurting myself by fleeing to safety after losses.

You can't win if your not in and you can't get all the winnings if your on the sidelines most of the time.

A Bull market is the wrong time to be too conservative.

Now we just need to make it happen.

 

[Cactus]

The problem is that when a bunch of us start thinking like this, the market tanks into a bear market and we ride it all the way down expecting it to turn around. I know -- I've done too much of that.

 

[pmaloney]

I agree but I have not ridden things all the way down very often. I have definitely fled too quickly and need to be in more. That's what I like about this site. We get a lot of good advise and a better glimpse of what may happen and then we can decide how long that condition will last and the risk we are willing to take.

 

[Birchtree]

I like to buy all the way down and then continue to buy all the way back up - seems to work well for me.

 

[FireWeatherMet]

I like to buy all the way down and then continue to buy all the way back up - seems to work well for me.

Thats called "Buy and Hold"

But that has worked well the past 3 years, better than most on the Tracker. Congrats.

But let me ask you this Birch...if the Fed announces its raising rates and the market starts cratering, followed by Greece default/Euro exit and continued China slowdown along with Oil continuing to fall and the market goes into a prolonged tailspin, would that be enough for you to ditch stocks for a few weeks/months in the TSP and grab the -F- fund for awhile, like in 2011 when the -F- outperformed all other funds?

 

[WorkFE]

Birchtree, F fund. :laugh: now that's funny.

 

[Boghie]

Thats called "Buy and Hold"

But that has worked well the past 3 years, better than most on the Tracker. Congrats.

But let me ask you this Birch...if the Fed announces its raising rates and the market starts cratering, followed by Greece default/Euro exit and continued China slowdown along with Oil continuing to fall and the market goes into a prolonged tailspin, would that be enough for you to ditch stocks for a few weeks/months in the TSP and grab the -F- fund for awhile, like in 2011 when the -F- outperformed all other funds?

FWM,

Birch right now is market timing the 'I Fund'. He has ridden it down and will ride it up. More of a contrarian view right now than a buy and holder. He just looks like a buy and holder because he makes so few trades.

I worry about the Fed increasing interest rates but they have to do so. The 'F Fund' under QE and 0.25 interest rates is actually acting like an equities fund. The 'Total Return' of the 'F Fund' is very dependent on capital gains - that is not normal. People are speculating. The yield on the thing is 2.31% while the return is 6%. Thus, market activity accounts for 62% of its return. The FED is going to have to get bonds behaving like bonds and that WILL be a lurch - but why will it hurt equities (especially foreign) in the mid to long term. Even the short term. I bet on a week long crash of 5% and then a steady uptrend. So, who cares if you are not largely in the 'F Fund'. The same would be true if we get a Black Swan event where investors stop buying bonds with crappy interest rates - actually that would be much worse, eh...

Greece. Who cares. It is a vacation spot for lily white Brits and fat Germans. Your Ouzo will get less expensive, tourism cheaper, and they will pay their gubmint salaries with funny money, but... Some banks will take a haircut on their crappy investment but Greece is a gigantic who cares - if the 'I Fund' drops because of it I will move more money into it. Anyway, have you ever bought anything made in Greece...

China growing slowly. Again, who cares. How much stuff do they buy from Amerika, Europe, and Japan. I'm sure they buy some but they don't use it well. Their '5 Year Planners' build cities without people, build coal power plants, build factories that produce crap (I bought sweat pants from Champion for a present to me that had an inseam 1.5" longer than documented - which they later noted below the item). Again, who cares.

Oil dropping to a normal price. Who cares. Why was it over $100 buck. It was because there was no production margin. There is now and there will be for the foreseeable future. I saw the development of Saudi Amerika years ago and have been waiting for this. Oil producers went around our '5 Year Planners'. I would bet most of the big money has been expensed and now the oil is cheaply yanked out of Mother Gaia. The only entities that are being seriously hurt will be those nations that fund their gubmint fat with nationalized oil revenues. The Venezuelans will feel the pain but how much pain will you feel if Exxon loses money? Is Exxon stocking your grocery store with toilet paper? Actually, your toilet paper will likely get cheaper. Ah, the wonders of capitalism!!!

 

[FireWeatherMet]

Here is the basis for changing my investment strategy this year (below).

In 4 of past 5 years the C or S fund (or combo of both) gets you into the top 10% of the tracker, with the S fund nearly winning outright once.

In the Bear year of 2011 you still would've finished in the top 3rd with the C fund, but more importantly if you recognized the Bear Market, then the F fund would put you near the top 10%.

View attachment 31882

So my NEW strategy is NOT to make a ton of IFT's. Its NOT just buy and hold, but hold for MUCH LONGER.

Of the several "tops" every year, 1 or 2 clearly telegraph themselves as crowns before dropping several percent. Catching just one and gaining at least 2-3% on the S or C funds then buying back in and sitting still for the rest of the year would allow you to to finish 2 to 3 percent ahead of the S or C funds. In 1 of the past 5 years you would finish number 1 and win the Tracker and in 3 other years you would finish in the top 3%

Ideally nailing the top 2 tops of the year could enable one to gain 4-8% on the stock funds and put you near the top every year of a Bull Market.
Question is...is this going to be a Bull Market?:notrust:

I'm having the same fault. Too much time in G/F... And, I always hold I - but, I always will...

Anyway, another way of thinking is not to bother trying to time tops and making quick trades to catch 5% or less moves but instead to avoid the obvious market dumps. That way you are in for a bull but bail on corrections. I am going for a bit more risk in my normal allocations and will just watch for moves <7%.

Yes Bogie, that's pretty much what I meant, namely the biggest 1 or 2 drops of the year. They tend to telegraph themselves the best.

​

 

[GUCHI]

Bobbie your comments are enlightening and on point. I enjoy your comments especially the buying things made in Greece. Now that had me laughing out loud, glad I was home and by myself to really enjoy. Thanks john

 

[Boghie]

If Exxon and Shell (the two highest weighted stocks in the 'C Fund') get taken over by America's '5 Year Planning' Federal Gubmint and that gubmint zeros out all the stock holders than 3.3% of the S&P500 will vanish in an instant. I know that the 'uncertainty' factor of having the Federal Gubmint nationalize a company or sector will dump the market more than 3.3%, but what I am trying to state is that problems in the oil industry are not really our problems because we are not dependent on the oil industry. So, the corpulent capitalist pigs take a 10% haircut and drop the S&P500 by a point or two (after the victims panic and sell at a loss and I buy and dream of a full time driver in my retirement Winnebago and a captain on my yacht.). Trust me, Exxon will make it back!!!

 

[craigerv]

Yes Bogie, that's pretty much what I meant, namely the biggest 1 or 2 drops of the year. They tend to telegraph themselves the best.

View attachment 31899
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I'm not sure that Obvious Topping Pattern is so obvious when you don't have the context of the future 6 months to help you. If it was so easy to pick those then I think more people would. From this chart alone I can see several tops that could cause you to exit prematurely: Nov 2009 when it flattened out - stay in or risk the drop? If you exit and you're wrong, do you chase when the S&P runs up early in 2010? In 2010 you did have a developing H&S pattern, but when do you buy back in? I see two decent sized bounces before the bottom was in.

 

[Birchtree]

If Exxon and Shell (the two highest weighted stocks in the 'C Fund') get taken over by America's '5 Year Planning' Federal Gubmint and that gubmint zeros out all the stock holders than 3.3% of the S&P500 will vanish in an instant. I know that the 'uncertainty' factor of having the Federal Gubmint nationalize a company or sector will dump the market more than 3.3%, but what I am trying to state is that problems in the oil industry are not really our problems because we are not dependent on the oil industry. So, the corpulent capitalist pigs take a 10% haircut and drop the S&P500 by a point or two (after the victims panic and sell at a loss and I buy and dream of a full time driver in my retirement Winnebago and a captain on my yacht.). Trust me, Exxon will make it back!!!

I happen to own a sizeable stock position in WGO and making a nice capital gain when I'm ready to take it.

 

[FireWeatherMet]

Large Caps outperformed Small Caps in 2014, and continue to do so into early January 2015.
I was a little surprised to see the C Fund have more "pop" than the S fund on a day like today.

So the question for 2015...IF Bull Market continues...should we go "S" or "C" ? (or perhaps "I" if one feels it's finished plunging & has the most upside potential)

Myself, I've been hedging the bet and am 50/50 C & S.
Found some interesting articles on the topic:

2015 Investment Playbook: Small Caps Versus Large Caps

By Iryna Neskoromna
Published December 23, 2014FOXBusiness

2015 Investment Playbook: Small Caps Versus Large Caps | Fox Business

Will Small Cap Stocks Bounce Back In 2015?

Will Small Cap Stocks Bounce Back In 2015?

 

[sniper]

ey mon i like the C fund right now

 

[Boghie]

I would probably be 50/25/25 C/S/I if I were all equities. I think the 'I Fund' has much more room to grow so I would want to have a decent chunk in it. Same - but less obvious - regarding the S. I think the C could buffer an investor from the negative potential of the I.

 

[pmaloney]

I would like to be in the I too but I think it is risky. I think that Draghi has to institute some QE on the 22nd this month but I'm not sure what the outcome will be and then there are Japan's problems to work about. C & S is safer but the I could rise a long way. Tempting but risky?

 

[FireWeatherMet]

Newsfeeder had a really good article on recent V-bottom patterns.

http://www.tsptalk.com/mb/business-news/21829-v-bottom-playbook.html#post485302

From it, I think the most common one (before the Big One hits) is probably a 5-7 day drop duration of 4-6%.
Tactics for the next one possibly.

 

[FireWeatherMet]

Didn't have time to post advance notice but made my 1st IFT in 9 weeks (mid Dec)...exiting from 50/50 mix C & S into 100% G COB today.
Actually confirmed the IFT with 1 min to spare.:worried:

There were several reasons. My new strategy is to stay with the market (C, S or I) 90% of the time. Only exiting at market tops at new highs.
Have been eying our new highs the past few days, and have also noticed what is either a flattish/rounded top or what some think is consolidation.



What really had me on edge this week is Greece. The new far left party in Greece won on a pledge to end austerity, which is why they have been firmly trying to renegotiate the austerity part of their bailout deal. The Germans are saying no...firmly. They are meeting now as I post this. My concern is that it seems Greece has till Feb 28th to really have something in hand, so they might try to stall a little more, to save some face with the voters who put them in there. That would give many a reason to take profits while we are at new market highs. Another scenario is that a deal is reached, the market shoots up today, putting us in a slightly oversold position and produce a day or 2 of profit-taking on Monday.

Also, there seems like a lot of greed and complacency out there. I smell Dumb Money starting to pour in. VIX has been steadily falling past few weeks and is now near both 1 month and 3 month lows.

We'll see...being up just under 6% for the month, with another IFT left is not a bad place to exit. If I'm wrong, worst case scenario, is I miss one up day Monday but get back in COB that day. Depending on how Greece news shapes up, it could be more of an I Fund mix.

 

[WorkFE]

Didn't have time to post advance notice but made my 1st IFT in 9 weeks (mid Dec)

Dang it. I was stalking your moves. :notrust: