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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (26621)	3/31/2005 12:57:41 AM
From: shades	Read Replies (1) \| Respond to of 116555

I am on the battleground holding my SHORT sword to fight evil GOOG's and beat them down General Chen - lead the charge!! United we stand! Today is a good day to die! I have my GOLDen shield to deflect their blows and my LONGbow of TIMBER to battle them at distance! Only buy something that you would be happy to hold if the market shut down for 10 years - Warren Buffet Far more money has been lost by preparing for corrections or the anticipation of them that has been lost in the actual corrections - Peter Lynch The inevitable never happens, it is the unexpected always - Keynes When we are living on this much borrowed money, we have little borrowed time - Volcker socialize.morningstar.com 15. 50 best months and 50 worst months sudhi\| 03-30-05 \| 08:06 PM (Reference to Shilling's 1992 paper in Financial Analysts Journal titled : 'Market-timing : Better than a Buy and Hold strategy') : Table : DJIA Average Simulation (Jan 1946- December 1991) 50 strongest-50 weakest---All-other---Ave annual return months-------months-------months Long---------Long---------Long-------------11.2% 0------------0------------Long-------------10.8% 0------------Short--------Long-------------18.2% Shilling adds, 'The moral of this exercise is clear. It's profitable to be in stocks during bull-markets, but it's even more profitable to be short stocks, or at least out of the market, during bear-markets -- even if many of the major bull market months are missed completely' socialize.morningstar.com Alec, (username ats59) and I did a bit of research to see exactly how a portfolio of just two Vanguard funds, Total Stock Market Index Fund (VTSMX) and Total Bond Market Index Fund (VBMFX), actually performed during the last severe three year (2000-2002) bear market. Here are cumulative returns: VTSMX..100%.....80%.......60%......40%.....20%......0% VBMFX.....0%.....20%.......40%......60%.....80%....100% ------------------------------------------------------- 2000...-10.57%..-6.18%..-1.79%.. 2.61%.. 7.00%.. 11.39% 2001...-10.97%..-7.09%..-3.21%.. 0.67%.. 4.55%... 8.43% 2002...-20.96%.-15.12%..-9.27%..-3.43%.. 2.42%... 8.26% ------------------------------------------------------- Return.-37.07%.-26.01%.-13.75%..-0.25%. 14.57%.. 30.76% For cumulative returns from two other bear markets [73-74 & 30-32]. S&P 500 100% 80% 60% 40% 20% 0% 5 Yr Tr 0% 20% 40% 60% 80% 100% 1973 -14.70% -10.84% -6.98% -3.12% 0.74% 4.60% 1974 -26.50% -20.06% -13.62% -7.18% -0.74% 5.70% Cumul Return -37.30% -28.73% -19.65% -10.08% -0.01% 10.56% S&P 500 100% 80% 60% 40% 20% 0% 5 Yr Tr 0% 20% 40% 60% 80% 100% 1930 -24.90% -18.58% -12.26% -5.94% 0.38% 6.70% 1931 -43.40% -35.18% -26.96% -18.74% -10.52% -2.30% 1932 -8.20% -4.80% -1.40% 2.00% 5.40% 8.80% Cumul Return -60.98% -49.76% -36.81% -22.04% -5.33% 13.42% Buffett reflects wistfully on the writings of David Ricardo, the 19th-century trade theorist: 'In those days the trade imbalances got settled in gold--and when they ran out of gold, people stopped doing business with you.' Warren Buffet, Berkshire Hathaway, January 11, 2005