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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (68644)	9/25/2005 7:57:01 AM
From: shades	Read Replies (1) \| Respond to of 74559

We ain't at October yet. BWAHAHA! Yes John Henry - we aint there yet - HAHA! I love you MOO - you make me laugh - that means a lot to me. So 225 and about 30 days to go - we better back up the SHORT truck james cramer style then - 315 to 225 in 30 days is not a bad short. I don't pretend I can predict any actual value or time frame, but turning points are a bit easier and it is all a matter of probabilities. I am with you on the probabilities - mr. phil grandie says you have to play them to your advantage - like counting cards and black jack. It's not fun and doesn't get your emotions excited - but it will make you money long term. I watched some world poker thing the other day, and this guy had a pair of 9's, he went all in like 3.5 million because the other guy only had a pair of 2's - well the guy with the pair of 2's won - blew everyone away - the first guy played the probablities but put all his money on one bet - I don't think that was smart. Diversification is important. On gold, I have consistently been sending savings to Australia whose dollar is closely gold linked since I got here in 2002 on the basis that it was cheap and so was gold and it should go up. That was till this year when the USD started to rise and Igold go straight. Now waiting for Aussie to fall a bit... Well I thought you were in the USA now and investing in our country now no? Is soros and buffet still predicting a strong dollar collapse soon? In my gut I hate going against the old guys sometimes because later on you say - wow that old fart really knew what he was talking about. I still dont believe a dollar fall necessarily means a gold rise though. I've told you the model before and you paid no attention, I do pay attention MOO - your words do not fall on deaf ears - I don't remember you specifically telling me the model - perhaps my memory is failing - too much saki. so I didn't think you really wanted to know. But you think wrong if you believe that, gerrymander is probably the only one I think that comes here with zero interest in wealth - I think pretty much everyone else has at least some slight money related reason for being here. I think you just want to criticize. Moo I do criticize when I think it is justified, I feel your model made a bad call, I ask you what tweaks could be made to the model so that it would have more closely predicted GOOG'S actual move. Don't get me wrong MOO, I love your john henry spirit, I always like cheering for the little guy even if I dont think he can win - sometimes I have a little fun but don't ever think I just want to hurt people - in your past what has been the best constructive criticisms you have received? But here it is again: Great MOO - as you say - the more tools in the toolbox - the better mechanic you have the chance to become. You just estimate the following regression on the logs of stock prices: y(t) = a + by(t-1) + u(t) You do this for a variety of time frames (usually I use 8,13, 21,34 etc. days the Fibbonacci series). And you continually move the window. Excel does all this simply and easily. The parameter b varies over time. For very long samples it is close to the expected value of 1 (random walk). But for shorter samples it varies a lot. Ok fundamentally what makes the market in general go up - market participants being added right? With world population growth levels smoothing out and baby boomers retiring - what effect do you see this having on the long term trend of the market? The pyramid scheme falls when you dont have an ever growing supply of new suckers right? It doesn't go down, it totally collapses right? In the shorter sample when it gets to one it is often a turning point. There are false signals so confirmation with another method helps. Ok, we know what GOOG did from jan 1st to sept 23 - what "tools" in combination most closely matched the reality - that is what you would seem to be uniquely qualified to know - do any mix and match of models predict what happened with GOOG? If not - why do you think so? I am thinking you probably have lots of models on your computer you can mix and match to see which best mesh predicted what happened with GOOG up to this point. You have the ability to make better and better refinements. There is at this stage a lot of art to using the method.... There is a lot of art to computer programming for many programmers, but its like this, there are certain reasons you do certain things, the theory is taught to some of us, not to others, 98% of the time you probably don't need to know that theory or comprehend - a code monkey will do the job cheaper - but those 2% of the time - well you know how it goes. When people start talking about "ART" and I wanted good code at IBM, I didn't like that. Usually that was the guys that didn't want to follow the rules so they could ensure job security with thier ARTwork - hehe. No good programming practices - no good documentation - they just slung thier art up and boy did that cause havoc for the people trying to follow in thier shoes. I also look at both daily and weekly data... Using multiple methods certainly helps. I also use Bollinger Bands with Fibbonacci periods. Checking the way different moving averages (with Fibbonacci periods) stack up is a method I discovered this summer. When they are all stacked up in the right order you are likely at a major bottom or top. Then MACD, stochs and those methods are helpful for confirmation and determining E-Waves. For the major indices I use the McClellan Summation, and the Bullish percentage. Highly useful. And I try to compare across markets and asset classes to get a consistent picture. What benchmarks and timeframes are you going to use to say wether your method was a success or failure over just sticking all the money in a big total stock market mutual fund as Mr. Bogle recommends? I had a friend MOO - he was a real ladies man - he used to get a lot of them when he was young - well as he got into his late 20's he was spending lots more money and time on clothes and perfumes and clubs and drinks and that lifestyle and getting no women - when he was young and in shape he didn't need to spend all that time and money and got lots of women - he used to chastise me for sitting at home programming games or playing chess while he went to the clubs and spent a lot of time and money. I said friend, you go to get sex, its not working for you - what benchmarks are you going to set and what time frame that what you are doing is or is not working - he said I will keep going till I get some - they wont beat me down or break my spirit - well several years later he has spent much money on nice cars, expensive new trendy clothes, 300 dollars in drinks some nights, and still no sex - he came and visited me - I took him to the local strip club - my friend got a nice bang in the private room - I told him life is too short to live in fantasyland - he doesn't waste money on cars or clubs or drinks anymore with women who steal him dry selling him a fantasy that never becomes reality - when he wants sex he goes and gets a hooker or dancer now - why lie to yourself? hehe But he didn't have any stated goals or timeframes or benchmarks - this was highly inefficient I thought. When does Jay COVER his short - when do we say its a LOSS and move on - he does not have an answer - that makes his investing style highly inefficient and risky to me. This is one area where I very much agree with that crazy high school drop out nut mr. phil grandie - he has a stated goal and time frame with stops. A fool with one good goal perhaps can accomplish more than a genius with no defined goals eh? None of these methods can predict when something will reach a price target or what level. Now don;t go off like greenspan saying we cant know the world has ended until we see big mushroom clouds all over - certainly some mix and match of all the data and info and models you have can get close on GOOG no? If not why do you think so? If you mix and match all your data and tools and none of them even come close to modelling with happened with GOOG I will be very dissapointed. All that I think is guess work, though there are often strong hints it is still just guessing. Well my brain guesses things too - it guessed SIRI should go lower - it went higher - my stop saved me from my emotions and guesses - I am for removing guessing and ART as much as possible - so no mix and match of your models and data closely predicted what actually happened with GOOG? The methods above have a consistent basis to them and tend to coincide. What they do is break a series into a stochastic trend and stationary noise around the trend in different ways. It makes sense from a time series perspective. E-Wave is about fractals that's all. The basic insight to distinguish corrective and impulsive waves is valid. You know I had to take a lot of math in college, and like I said before, there is a reason you need to have the fundamentals and theory of many things - but if I couldn't see a practical use for it in my life, I really lost interest fast. This asian math teacher (seems most of the better math professors were asian) told me about this weather making butterfly with madelbrot wings here : powells.com I found it very funny - that an asian math professor actually liked reading british humor - that was very rare I thought. Wave counts sometimes though really need to be stretched to fit the theory.... Well we start getting back into ART again, and MOO I want to bring as much science into our investing as possible and get away from as much art as possible - doesn't the academic in you yearn for the same goal? When you have to start "STRETCHING" things doesn't your faith start to wane? There are plenty of TA methods out there that don't make sense and plenty that make sense but aren't useful. Well it made sense to me to short SIRI and buy VDC. I am all for seemingly stupid ideas if they make money. In my storefront this fellow wanted me to put up a display for pink cell phone covers - it didn't make sense to me - but it sure made a lot of money on those chicks that came in and got excited by that stuff. So all this modeling is just time series analysis, of a strange kind, but nothing more or less. When exogenous shocks hit the series there is a limit to what they can do and that varies depending on the past history. Past history is no gaurantee that tomorrow you will wake up - the bible said something like just because you have all those days you did good in your past - does not mean tomorrow is promised you eh? People are bad judges of Risk I think. See I won't fly planes anymore, but I love to take buses - but in stop and go traffic with oxygen tanks that was a bad idea recently. So it doesn't matter what market makers or rednecks do. Moo, I just am gonna have to disagree with you there - over on the real estate thread I posted how this smart MSFT guy and smart portland oregon guy thought they could be successful anywhere - but it indeed did matter what the rednecks did - and the rednecks made them broke with thier backward business thieving ways. I feel without wallstreet and gubbment manipulation - the markets would be a very different thing then what you and I play now. I remember there was no silver back when we were making the first atom bombs - all of it was used in the bomb projects - but the price never changed because the general of the day went to the market makers and told them to fib - they made a HUGE difference - the sold a fantasy to the people and the people bought it - proving once again - REALITY does not matter - peoples PERCEPTION is what mattered - phil often plays a quote from donald trump - wallstreet is in the business of selling FANTASY and they are very good at it. For example - imagine if BUSH and the boys in power actually believed or cared to listen to all the global warming scientists - do you think it would make a difference then what market makers and rednecks did? Bush has to be one of the ultimate market making rednecks - hehe. It is all in the time series. Just like I can apply similar methods to the climate or the macro-economy. BWAHAHA - you can apply all the series you want to the climate - but redneck market making bush seems to have a greater effect than your science. powells.com When a carrier albatross arrives with an urgent request for a "Great Wizard," Rincewind finds himself summoned to the endangered Empire of Hong, Sung, Fang, Tang and McSweeney, where a new Emperor is about to be chosen. Accompanying Rincewind is Cohen the Barbarian, as well as an ant farm-powered computer named Hex, a fractal weather-making butterfly with mandelbrot wings, and a ferocious, if slow-moving army of six old men, the Silver horde.Their mission is to either defend or destroy the Forbidden City of Hunghung.The problem is, the instructions are not entirely clear...