Mike's Account Talk

[Mike]

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Here's a little starter materialregarding my situation and my corresponding approach to the market:

I'm 26 years old and will have reached my 2 year mark in federal service this December. My "horizon" is about 40 years, so I tend to be more aggressive than most - I'll probably be close to fully invested in stocks even when the market deals with extended bouts of weakness / sideways action (like it did this summer). As such I will take my share of losses - but I won't miss any rallies, either.

I pretty much ignore seasonality charts. I prefer to pay attention to interest rates and the overall state of the economy.

Everyone is welcome to laugh at me as I ride the rollercoaster market. :^

For the curious-minded, here are my rates of return for the past four quarters (the only four I have been investing) using Pete's formula posted elsewhere:

2003 Q 3: 1.29% (all G - took months to get my PIN#)
2003 Q 4: 9.69% (got my PIN# in November and dove in)
2003 overall return: 16.04%

2004 Q 1: 2.54%
2004 Q 2: 1.65%
2004 Q 3: I haven't looked at my numbers for this closely yet, but it's looking flat - somewhere between -0.4% / +0.4%.

 

[tsptalk]

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Good luck Mike! For the sake of this forum, pleaseuse your returns beginning today. Like some others have done, you can start with a ficticious balancelike $10,000 or $100,000 for simplicity sake. It might help us follow your progess.

Thanks for participating!
Tom

 

[Mike]

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I just posted the "quarterlies" to demonstrate my limited track record.

But yes, feel free to track me with fictitious $10k (it's not that far from the truth!) split 4-0-32-32-32.

Small gains today - looks like there was some profit-taking on the early upward action.

 

[TheProphet]

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Mike,

I was 26 once... also... I learn the market take and give... that when I paid more deeper attention and now I consider everything as possible... TRENT, CYCLES, SEASONALITIES, RANDOM NEWS... of course cycles and news includes the 11economics indicators more significants... etc...etc... I am feel very comfortable with my strategy... of course everyone has His/Her own that taylor to Him/Herself...

Wish you the best... Good Luck on Your investments...

Leon

 

[Mike]

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Thanks, Leon. I might be the youngest investor on here. Maybe Tom should poll the online audience here and find out where we fall on age, etc.

 

[Mike]

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Now that I *finally* have gotten home and have time to type this, here is why I lightened my load in the I fund:

I spotted a news article early this morning that mentioned rather uninspiring news on the European economy. So, to borrow on Tom's little spiel on the market conditions today, I "sold on the news". I'll use my strengthened holdings in the G fund to look for another buying opportunity - most likely after the inevitable pullback takes place.

 

[tsptalk]

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Mike wrote:

So, to borrow on Tom's little spiel on the market conditions today, I "sold on the news".

lol. The key to that saying is to buy the rumor of good news, then sell when the good news come out. And sell the rumor of bad news and buy when the bad news comes out. That's because the market is smarter than us and has usually moved before the news comes out. Maybe not in your European market situation, but in general.

So if you hear a rumor thatcompany ABC is going to have a good earnings report, buy. But as soon as the good report comes out, sell!

 

[Mike]

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I feel like I've been buying the bad news all year.

Here is some interesting data (or perhaps not so much)for everyone's consumption:

2004 highs: C $12.15 (3-5-04), S $13.51 (4-5-04), I $13.79 (10-8-04; prev high $13.70 on 4-12-04)... so the I-fund has made a new high (take that, bear market people )! C-fund came within $0.03 of its yearly high on the 6th (oh so close!). S-fund came within $0.20 of its high.

2004 lows: C $11.25 (8-12-04), S $11.87 (8-12-04), I $12.39 (5-17-04). For those that care, the I was still $0.41 above its low for the year when C and S hit theirs.

Current prices: C $11.91 - $0.66 above the bottom, $0.24 from the top;S $13.03 - $1.16 from bottom, $0.48 from the top; I $13.79 - at the top, $1.40 from bottom :shock:.

By the numbers, I fund is bullish while C and S are bearish - however, if seasonality means anything this year, C and S could both break through to new highs for the year after posting yearly lows just two months ago. Of course, people want to know which funds will do the best for the remainder of the year, and as far as that goes, I think C and S will outperform I (the dollar is incredibly weak and is bound to gain strength at some point). And just in case they don't, I'll continue holdingsome I fund shares.

 

[Mike]

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Ha, how things change... I'm not holding anything in the I-fund at this time - waiting for the next buying opportunity. After moving that chunk of money to G, nothing much happened to the I fund price (except for yesterday's gain). C and S have both dropped back a bit - about $0.20 lower than my last post here. I view this is a nice time to buy - but I'm still hedging with a split between C and S.

I won't seriously consider buying back into the I-fund until I see at least a modest retreat off the high.

 

[Mike]

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After a painful two weeks on the sideline in G, I'm back into the market. I will likely ride this move into January... 20 C 50 S 30 I... heh.

Hopefully I'll finish the year with a 10% gain or more. If I do that annually, I might need an accountant to keep track of the $$$.

 

[Mike]

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Shares were bought at the following prices (for ease of tracking heh):

20% C at $12.44
50% S at $13.82
30% I at $14.63

 

[vectorman]

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Mike have you always had that much patience to waitout the market? Does that come from years of experience? In a Bull market, how were you able tostay the course and wait that long? I'm always learning, and would appreciate your comment. Thanks

 

[tsptalk]

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I'll jump in here if you don't mind Mike...

Patience is a great quality in an investor and trader. I have found that you can make good gains or protect from biglosses if you correct a wrong decison quickly. Of course you have to recognize the mistake which isn't easy. If you don't act quickly then you need to wait it out as Mike did, because the market will eventuallycome back.The market rarely goes strainght up, or straight down.

In Mike's case, and I've been there many times, he could have jumped in earlier and made some money before pulling out. But since he didn't catch muchof the move up since Veteran's Day, he did a great job in waiting for that inevitablepullback, rather than chasing.

:^

 

[vectorman]

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Thanks Tom , this is such a great site.Always trying to learn.

 

[Mike]

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I have only been in thrift since June of last year (just under 2 yrs experience as a federal employee), so I don't owe this to any sort of investing experience, really. I've just paid much closer attention to the markets this year as well as economic news and so forth. I saw my error on the 2nd pretty quickly, but was worrying about the pullback hitting right after I went in - had I gone in within that first week. So, I just waited... and waited... and waited. Last Friday, I just said the heck with it and went in all the way - and when I came home from work and saw all the red - and down big - I knew I had done the right thing. So it was partly luck, partly patience. :^

 

[Mike]

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Today's move is 75 G, 25 I (meaning I'm selling the 20% C, 50% S, and 1/6 of the I-fund amount).

Originally, I was going to go 100 G, but I decided with the dollar continuing to perform poorly, I wanted to maintain most of my I-fund position. Looking to the future though, I believe that the S fund will outperform the I fund, which is why I didn't do something like move 50% into I (proof is in the pudding: most of my gains on my latest move came from the S fund).

C fund continues to lag behind the other two. It looks like we'll need another rate hike or two before that one starts to lead the S again.

Whatever happens, I can't be disappointed with this last move... it *finally* gave me a piece of this latest bull market. Those two weeks on the sidelines were very difficult! :^

 

[Mike]

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Moving to 75 S, 25 I today (I remains the same).

 

[Mike]

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Moving to 25 G / 50 S / 25 I... want something set aside just in case there is a pullback.

 

[Guest]

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Posted: Tue Dec 7th, 2004 11:34 am






Effective at the end of today:

25 G
50 S
25 I



Change of heart there youngin'?.............

 

[Mike]

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Yeah, I got a bad feeling after hearing the productivity numbers... unfortunately, that bad feeling hit 24 hours late. :shock:

I'm not locking in anymore losses and will simply ride out whatever else happens... though with the I-fund dropping a couple days in a row, I might take advantage and move something more in there.