The argument for trying to pick a bottom

The dangers of trying to pick a bottom are obvious in a bear market - but here's the problem with not trying to pick a bottom. Remember this time last year? Market pops on Sep 1 and the boat left without the bears. It wasn't until November that there was any real opportunity... unless you chased.

 

[Birchtree]

I prefer to always be buying through the potential bottoms and I'm humble enough to chase on the potential upside. I just want to own wall flowers no matter the price - because a year from now when I look back I'll congratulate myself for staying disciplined to my accumulation strategy. Let the train roll.

 

[Happy_Trails]

Maybe the train will leave the station today. That would be nice.

 

[RealMoneyIssues]

Um, I hate to be the Bear in a room full of Bulls, but aren't we in the May-June 2010 timeframe (beginning of the downturn) vice August 2010 (end/turn-around)???

Shouldn't we expect a month or 2 of choppiness (June-July 2010) before we start heading up?

 

[Birchtree]

Never expect anything - always go with the flow. You never really know what's around the corner. The business cycle is only half over.

 

[tsptalk]

Um, I hate to be the Bear in a room full of Bulls, but aren't we in the May-June 2010 timeframe (beginning of the downturn) vice August 2010 (end/turn-around)???

Shouldn't we expect a month or 2 of choppiness (June-July 2010) before we start heading up?

I think we can (expect more choppiness), but I also think stocks will be higher by the end of the year even if we see another new low. The question is whether you want to trade it, or buy it now.

I will be posting this in Wed's commentary:

Yes, we could see another shake-out. In 2008 we did move to lower lows not bottoming until March of '09, but I believe what is different this time is that 2008 is on the brains of the bears causing high pessimism, and the current situation is not 2008.

Of course the beauty of being a timer as opposed to buy and hold is that we can change our minds and go with the flow as Birthtree said. The difference is he will go down with the ship if we're wrong where I'd hope to trade out if we do get a real breakdown. Easier said than done, but at least we have a choice. The buy and holders don't.

On the other hand, if he's right, he'll make every penny of the gain where timers probably won't.

 

[RealMoneyIssues]

BT advantage is the ability to DCA. I cannot take advantage of these low prices...
Maybe next correction...

 

[dpmp]

Not many people can pick the bottom correctly. Me neither, but I picked the top "sorta" correctly. Twice. And now I'm just grazing for the right opportunity to get back in.