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Strategies & Market Trends : Value Investing
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To: Shane M who wrote (56529)1/2/2016 12:56:12 PM
From: Graham Osborn1 Recommendation

Recommended By
Shane M

  Read Replies (1) of 78768
 
Re: back testing methods
IMO these often seem to ensure one buys atop bubbles.

Re: oil prices in 2015
I think the mistake some made (myself included) was thinking we knew more fundamentally than we did, or thinking our fundamental knowledge was more tradable than it was. I had a view (based on non-marginal production cost) that 45 was a floor "over the 1-3 year" time frame. Not only do I no longer believe that is true (the marginal costs are much lower) but I realized in the Great Death Slide #2 this year that I wasn't willing to sit there and keep buying as my stocks (TGA and BNKJF) eroded support. I reversed course/ put my faith in technicals/ sold everything at 8-10% loss and bought back lower with a plan to repeat as needed. I have searched in the meantime for a new and more actionable fundamental view, which I have yet to find. It seemed to me based on Burry's letters in the early 2000s that he had formed a strong view for a rebound in prices at the macro level. While I have yet to think I understand his thinking, the best I can do is think he believed that a continued flight from financial assets would produce a rally in physical ones. This is my current view and also while I am waiting for a true bear market in stocks before I start looking for a bottom in commodities (preferably a mature bear market). I continue to trade in energy, but like Soros I will trade out of it based on technicals and not wed myself to a fundamental view for ABSOLUTE oil prices.
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