"As for the 1974 to 2002 period, a market time like Mr. Womack would have outperformed a buy and hold investor (even if the latter was in the right stocks) by far.
That's what I have become - a market time - to some extend"
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Mr. Womack did make a "market time" in that he believed stocks were cheap enough at a point in time such that he entered the market. And again he made a "market time" when he sold those stocks because he believed they were fully/fairly valued.
Was he a "market timer" though? Was he buying stocks when they were going up, or just because they were going up, or selling stocks--- esp. value stocks, just because they were going down? No. So he wasn't a market timer, in my view.
He apparently held cash as part of an investing strategy. Is that market timing? Maybe. I say no though because it's not inconsistent with value investing.
In my view, selling out of value stocks now, when the market is low, and just going to cash, is market timing, if you believe the markets are going lower. It's making a call on the direction of the market, thus market timing. Is this wrong?
I am trying to watch my pejoratives about market timing/market timers. People will do what they need to do and what works for them. If somebody's makeup is that they do well as a market timer, good for them. Being a market timer's okay if that's your thing. (Don't do it on this thread though -g-)
Value investing or not/market timing or not -- regardless -- it's a very scary time out there.
If somebody says they are a value investor and sells now and goes to cash from fear -- fear they've already lost too much money, or fear they are about to lose money (making a call that the market/their stocks might be going lower), that's certainly understandable. Otoh, value investors often buy when stocks are down or something's wrong with a particular company - and where things might get worse for a while. Imo, being a value investor means part of the deal is that you get the pain and the fear. It has to be endured until the stocks rise or else the stocks are sold for relief. |
