Market Talk / June 18 - 24

[Birchtree]

DaveM,

You ask what's next? How about some nice pearls for the lady that sets out your tie every morning to insure that your are coordinated. It will be fun to watch you ease back into a 100% position - be ready. I can hear the hoofs of the bulls approaching.

Dennis

 

[robo]

Ocean Wrote:

I do believe the size of the account is the factor. The bigger the account, the more conservative and careful you are in investing. Look at those mutual fund managers, they make million of dollars a year in salary plus bonus just by beating the S&P 500 returns in their portfolio for their clients. Well, I believe that most of you here have been beating S&P 500 for years in your TSP. The reason they earn millions and we earn our wages is that the size of the portfolio. My point is that the same percentage point of returns in reality is not quite the same when dealing with different size of portfolios.

Some thoughts on investing! These are my personal opinions only and understand many here will disagree. So, In advance I respect your opinion and here is mine.

Ocean,

I agree with some of what you said and want to point out two other important factors. I also have a very large account. However, two very important factors must be considered when investing.

1. Risk Tolerance.

2. Age.

I'm in my 50's and conservative in nature. When I go to Las Vegas I take pockets full of Money. I can afford to gamble Big, but I play it conservative. It’s just my nature.


For my second point is my age. It has taken me many years to acquire the gains in my retirement accounts. If you are close to retirement you should have a balanced portfolio. Risking it all is something board members getting close to retirement should think about. The L Funds say it all.

Anyway, I agree with you on many points, but it’s not the size of the account that should be the most important..

Think about risk and age before putting years of savings at risk. Are you young enough to recover big loses. In the crash in 2000 many folks could not retire due to big loses in the stock market. They had to continue working.

Think about it before you let it ride. I would think most folks on this board have stops in place to prevent big loses.. Does everyone remember the old TSP rules. You were stuck in the market for weeks.

A co-worker has been in the G Fund for many many years. He thought to himself, look at all this easy money being made, "Man let me make some of this easy money before I retire next year." Into the I Fund, BAM! 7k down and back in the G Fund. It happens more than you think.

Age and risk are what should determine your market exposure not the size of your account. Also, be diversified!!! I know the L Funds are not for most on this board , but it's easy to see how good they really are if you want to sleep at night and not worry about your retirement account.

I think the stock market will rally from her. But what if it doesn’t and heads to 1100’s.

How far are you willing to ride it down with no stops!!!

ONE MORE IMPORTANT POINT HERE MY FRIENDS. BIGGER REALLY IS BETTER!!!!!


FundSurfer,

I was typing slowly and didn't read your post before sending mine. We agree! Sorry folks I type very slow! Same points twice.

 

[Rod]

Now that I've read and understand your concerns I will no longer edit out dollar amounts of accounts unless it becomes a board rule.

It was more of all judgement call at the time. We (mods) thought it was in your best interest.

With everything said, I'm sure Tom and the other mods would simply agree that if you want to post your account balances, you simply do so at your own risk. If Tom doesn't agree, expect a new rule... one that perhaps was never thought of before. I'm sure Tom will reply and give the final say.

God Bless

 

[robo]

After todays Market action it looks like more pain coming to investors. No problem as long as the old support level holds. We will start coiling the spring again.

 

[Birchtree]

Robo,

That's why we earn and learn from each other. I have confidence the markets are undervalued with a P/E ratio going forward of 14 on the SPX. The world is getting better - the trick now seems to be to think ahead of the Hedge funds and when they arrive give them what they want. It's really all for sale. I love my wall flowers dearly, but loyalty is only worth a quarter point. Henry won't be the only one looking for big dogs and the bigger the more expensive. The funds have so much cash - recently being pulled out of emerging markets and looking for a home in the SPX and OEX. There is absolutely no way I can be negative - not until we cross Dow 17,000 or SPX 1700. Then I'll be like the milk-man on a hot tin roof. I'm going to read your e-mail.

Dennis

 

[ocean]

When I said size is the factor which I meant it would affect an individual’s investing strategy and style. It’s either aggressive, conservative or somewhere in between. No way would I disrespect folks in this board because of their size of portfolios. They all have my respect by just showing they are willing to share information here and take responsibility of managing their own funds. After all we are one big family.

Well, the size of my account is important to me personally since it took me years to build up this account. I would pay attention to the balance dearly since this is my only retirement funds plus some FERS pension when I retire. My original thought was to share this information to the members here because I don’t have other information to share. One reason is that I don’t know any of those market indictors and I don't want to pretend I know what I am talking about.

Agree with you FundSurfer, you can be somewhat aggressive while you are still in your mid-career point. BTW, I enjoy following your moves because of your track record.

Robo, you are correct by pointing out two other factors which are Risk Tolerance and Age and then I add “Size”. Hope we all continue to build up the size of our accounts and retire happily.

Ocean

 

[robo]

Monday, June 19, 2006

Investors Get an Options Expiration Hangover Monday
Stocks slid back down the greased pole Monday as Friday's Quad Witching options and futures expiration rally unwound very quickly after a brief spurt to the upside to catch the last buy stop orders which were poised above the market. Once the weak shorts were cleaned out, the Dow fell 150 points intraday, closing down 72 points from Friday's Quad Witching close. These are called "expiration games" and they can lead some players to nice short term profits, but do not disturb any longer term trends and should be ignored by investors as market "noise". Oh sure, the media will do their best to "explain away" the action by quoting news and events as the cause, but it's just a mechanical process like program buying and selling. Very predictable, just like the options expiration rally which usually tacks about 300-400 points onto the Dow. Nice for day-traders, but not so nice for longer term investors.

The QQQQ option traders stayed bullish during the slide, but were neutral at the close. But, the OEX option traders were extremely bearish all day, which argues that the market is coming into a significant low soon. Still, the trend has been and is still down and it's always your friend.

There are some bargains out there right down, both in the stock market and in the commodity markets. The damage the Japanese central bankers have done to world markets over the last few weeks is likely to be just a temporary blip in economic history -- an intermission which forces the old hedge fund players to cash in some of their chips and new players to add to positions at much more favorable pricing. With the air cleared of long term positions, the markets are gyrating with virtually no short term trend. That leaves the long term uptrend intact and many bargains for the latecomers to buy. And, we suspect that the US Federal Reserve officials have had some serious words (a "dressing down") to say to their Japanese comrades who contributed to the volatility. We suspect the Japanese will be on their best behavior now that their "superiors" in Washington are watching them. That kind of oversight is necessary when the children have been playing with the financial equivalent of matches.

Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).

http://marketclues.blogspot.com/

 

[mlk_man]

Building permits down, housing starts up?

 

[Dave M]

That'll Be The Day

I used to wear a tie. Nowadays this is more my speed.

http://www.lebowskifest.com/achiever_babydoll.asp

I am easing in some more today.

Dave

 

[sugarandspice]

It all matters! The size of my balance, the % I make (or lose), how much I contribute, riding it out(which I will never do) bailing out. It matters big! It just doesn't matter to any of you. And no one should have to apologize for putting their balance here. Yeah security is an issue, but it seems a little paranoia is in play here.

 

[sugarandspice]

Yeah security is an issue, but it seems a little paranoia is in play here.

Another quote Sugar hears pertaining to her as she goes throughout her day.

 

[Birchtree]

sugarandspice,

When you say you would never ride it out - never is a long time. Monitoring investments can be time consuming ordeal. This bull is a cycle rider type and usually with out helmet. When the C fund bottomed out I got hammered to the tune of $35K. That sum is certainly unpleasant but tolerable. And now I'm back on the come back trail once again.My tendency is to dollar cost average all the way down and then all the way back up - cycle rider habits. I do wish I wasn't so lazy, but old patterns are hard to break - but there will come a time to seek the G fund - only several years from now.

Dennis - permabull#1

 

[sugarandspice]

Birchbull,

At what point would you have made a move? -50,000, 80,000? Never? What were you deeming as "tolerable"? I dont view losses as tolerable. They are unavoidable but minimal if monitored.

 

[Birchtree]

sugarandspice,

No sense moving when it's a simple correction - ride on through. There really is no loss until an IFT is made. And since I can't spend the money yet I ignore the temporary corrections and wait for the next new all-time high. Someday there will be another bear market and I presume I'll be prepared - until then my energy expenditure is used to find the top prior to the bear market. These bumps in the road are just a nuisance to a long term investor. The top is the critical factor - not a temporary correction bottom. But while one is at the bottom of the well keep on buying - that's the hard part for most people. Dollar cost averaging makes it automatic. Lazy me.

Dennis

 

[sugarandspice]

There is no "top." There are only corrections. Some last longer than others. It never tops out. The market gets to a high level then starts a correction and there is always a explanation why it got so high. But never is it said that it was at the top. It will always come back. Why go down with it. Get of half way down so you don't have as far to climb.

 

[sugarandspice]

Sugar,

PLEASE SHUT UP! You don't have any idea about what you are talking about. Just the idea that you are exchanging info with one of the most respected members here seems surreal.

Get back in the bathroom and introduce yourself to a bar of soap.

 

[Show-me]

S&s

Your starting to freak me out.:worried:

 

[Show-me]

Get off half way down so you don't have as far to climb.

Ditto!

 

[Spaf]

 

[Spaf]

Daily Yak

The Kingdom of TSP
Daily Edition
June 20, 2006 Closing​

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Pro-Yak...................................Bulls in the morning.
Con-Yak..................................Bears in the afternoon.

Doodles:
Socks [$SPX] Closed at..............1240.12, dn -0.02
Volume (CMF) (money flow).........+0.021, decreasing.
Averages (MACD) (trend)............-12.443, flat.
Momentum (S-STO) (signal).........34.52, decreasing.
Strength (RSI) Overbought/sold....[70] 40.53 [30]

Lube (NYM) Closed at..................69.34, dn -0.21
Oil Markers................................<70= ok, 70-75= worry, >75= panic.

Tea Leaves:
Charts & Stuff............................?? / Green [doodles ?, Lube < 70]

Tin Box:
Position.....................................100% socks
Stops [$SPX]..............................Alert: 1243 [broken]. Trail: 1230.