Marc; RE:" on the sidelines ? "
Thank you for your kind words, Marc. But you should be advised that I am certainly the worst-performing trader and investor of this dude-group. Writing off my July OSX 110, Dec 22.5 ASYT and Sep 55 DE CALLs, which I made in May (when I was pretty disoriented) will make a $100K loss to my portfolio. OTOH, I have made about $30K in trades & investments, so my $70K YTD loss is about -20% of my portfolio kapital - and that's the way it is, dude.
Obviously I feel that the statement "market timing is useless" is not true. If one is investing in the stock market, then there are three possibilities: (1) you buy at the worst times, market tops, when stocks are over-bought; (2) you buy at the average time, randomly but periodically; and (3) you buy at the best times, when the market is over-sold.
That caveat being made...
If you have MSFT/INTC/TXN/AMAT/DELL/CPQ/AAPL/CSCO/LU/UIS/EMC/BBY/AOL TechStox in your portfolio, just hold on to them long-term - check in when they report earnings - for any surprises - and keep weekly or even monthly charts, IMHO. They go up and down a lot, but they appear to grow well (as a group) year-to-year.
Non-TechStox...
Retailers, like bellwether WMT have their day in the sun; But by and large periods of high employment / lotsa cash in workers' hands / consumer goods price deflation: are the exception, not the rule. Retail appears to be insanely great only recently; it used to be somewhat cyclical, and was actually down-trending until 1996. I'm willing to accumulate some WMT at 1x59/2x57/3x54/4x49, where these are escalating dollar amounts; ie., "1" = 10% of what I am willing to put into WMT, 1+2+3+4 = 100% of what I am willing to buy, FWIW.
What looks good to me long-term, Marc, is Brokers and Drugs. One could buy funds - FSLBX and FSPHX, respectively. Brokers/Banks/Insurance companies move as one group (all groups move in sympathy with the S&P) but I like the brokers best. In the HealthCare sector, the big pharmas are doing a lot better than the health services. I have posted my own accumulation levels for banks/brokers/insurance as well as BigDrugz, and will continue to do so.
Europe is undergoing profound, structural changes. I am bullish on the EU vision. Germany is the bellwether. There is a EuroTop-100 index which, IMHO, will out-perform the OEX-100 for the next 5 years, as it has been doing this year. I'm willing to put some of my kapital into the EU.
Bonds are moving with the dollar/yen: weak yen = stronger bonds. As most folks believe the yen will become even weaker, bonds can still grow, even at these levels. They look like they want to go to 5.45% next. Right now, my buy level for bonds is when TYX.X is > 5.7% But, when Japan does bottom out, bonds will top out, so IMHO bondholders are now holding trading instruments that have to be watched, with an eye on Asia.
And then there is "the market" itself; the S&P-500, or SPY. Whenever I lose my way, I turn to the S&P-500: it beats 80% of the mutual funds; requires no rotation (like sector funds); and, you can buy and sell it for $10-$20 in commissions as 'SPY'. If you're not willing to buy the S&P, there's not much reason to buy the stocks in it. When it grows, you can LEAP it. SPY is sitting at its 200d MA, 104~108. This is the first "buy" signal, if you were going to accumulate by averaging down. If the market doesn't just plain tank again, I expect the S&P-500 to move in 8-9 week /\ waves, with a downward bias for awhile. Obviously, everything is over-sold on a short-term basis.
Obviously I feel that the statement "market timing is useless" is not true. If one is investing in the stock market, then there are three possibilities: (1) you buy at the worst times, market tops, when stocks are over-bought; (2) you buy at the average time, randomly but periodically; and (3) you buy at the best times, when the market is over-sold.
If you've done your homework on the F/A, past performance to begin with, it makes sense, to me at least, that buying on dips is better than a random - periodic buying strategy ( but not by that much, in the long run ;-)
Buying is not the key, IMHO; rather, it is knowing what/when/how much to sell that separates the good investors from the S&P-500 standard.
-Steve |
