True Selling Days

rono

Hi folks,

Gary Smith (not the Fox guy) that used to post on the earlier board and who wrote, 'How I Trade for a Living', described True Selling Days as when all the major indices are down more than 1%. We had one on Jan 14 and another one on the 2nd. These were metrics that he used to start selling. I noted the first, but only started buying some Inflation Protected bonds. Ever since I have been further easing back on equity exposure.

I am not suggesting that anyone do as I am doing, we're in difference spaces with different goals and objectives. That said, I don't like anything about this market at this time.

and so it goes,

peace,

rono

Junkster

rono said:

Hi folks,

Gary Smith (not the Fox guy) that used to post on the earlier board and who wrote, 'How I Trade for a Living', described True Selling Days as when all the major indices are down more than 1%. We had one on Jan 14 and another one on the 2nd. These were metrics that he used to start selling. I noted the first, but only started buying some Inflation Protected bonds. Ever since I have been further easing back on equity exposure.

I am not suggesting that anyone do as I am doing, we're in difference spaces with different goals and objectives. That said, I don't like anything about this market at this time.

and so it goes,

peace,

rono

Hi Ron. Hope all is well. Unfortunately an outdated indicator from a market from days gone by from an outdated book written almost 23 years ago.

DavidF

I'm with you rono. Began lightening up mid-December. I'd rather miss a bit of upside than lose a big chunk. Miss those days. Some names I recall:

Salil
Art Johnson
escott
Gary Smith
Pat-Ster
Kaspa
Ed
Carl

Stay safe,

David F.

LewisBraham

One needs to ask one simple question with every market indicator--why? Why does this work? If you can't explain why it works, I would recommend ignoring it. There may in fact be no reason the indicator worked in the past and its success could be purely coincidental. If you can explain why an indicator works, that provokes a second question: Do the market/economic conditions that made this indicator work in the past still exist today? Only if those conditions still exist could the indicator make sense, and even then, that's no guarantee. But you need to know why the indicator works first to answer that second question.

davidrmoran

yeah

except for some modest interest rate increases ahead, what is fundamentally different now from the week before LD or before thanksgiving?

larryB

Hi David,,,, you and I think the interest rate increases will be modest and historically I am sure they will be. This may be a leap of logic but I bet millions of investors will come unglued,,,, just like millions of “citizens” won’t get vaccinated. Not the same millions but the same lack of common sense or perspective.

rono

Howdy folks,

@junkster. Good to hear from you. Hope this finds you safe and well. Not sure what his rationale for TSD as a 'metric' and not sure that it works. That said, I learned about Momentum Investing from Gary and that is hardly out of date. When I actively invest, I use MI. Hell, I progressive bet at blackjack in the casinos. Pretty much the same.

@DavidF, and so good to hear from you Sir. So many memories. Remember Maureen? Very knowledgeable investor on Salil's board. She stopped posting after 9/11. We assumed she died. But ALL of these peeps taught me a lot just like so many participants do today. This, Sir, is how a discussion board should be run. I always make moves in December to reflect taxes and yearly rebalancing. I added some more natural resources and whatnot. A wee bit of junior silver miners. And, for the record, I didn't react to the first TSD but noted it. TSD or not, there is so much that can go wrong with this market and at 73, I'm really don't wish to play. I saw what the dot.com meltdown did to my wife's 401K from which she had to take withdrawals. Long expired. And as a disclosure, this is all 'on the margin'. We still own equities.

@LewisBraham, You are correct. I'm sure that your market decisions are based on many factors and so are mine. I was curious about the board's reaction. I'm a fundamentalist, a professional long range planner, and been reading Dalios. My decision to lighten up was based many things that might go wrong and many things that are going wrong. Sorry, but I really don't like the looks of things and decided to take some money off the table.

@davidmoran, two wars, civil war, $30T debt, same shit - different day. The natives are growing restless. I was no longer comfortable enough to be as exposed to the market.

@larryB, "Extraordinary Popular Delusions and the Madness of Crowds."

Everyone stay safe,

rono

hank

Thinking gets a bit muddled with advancing years. Caution looms. 2007-2009 was a “hoot” for many of us. Those under 60 or 65 at the time made out very well in the end, buying in at lower prices or (in my own case) converting a substantial sum to a Roth. Alas, “Father Time …. You can’t buy down like you did 10-15 years ago. Losses sting more.

Good thread. Thanks for all who contribute.

The markets? Hell … I don’t know. My guess is there are both bargains and trap-doors out there. Spread it around. Don’t buy what’s been hot. Consider foreign markets. Maintain a buffer in cash or short duration fixed income. Personally, I’m wary enough to maintain a small counter-position in TAIL - lending some credence to @rono’s concerns.

davidrmoran

@larryB, roger re lack of sense and perspective

@rono, this might help; doubt it, but might:

https://www.bu.edu/eci/files/2019/10/Principles_2e_Ch31.pdf

Most economists use the rule of thumb that as long as the rate of increase in government’s debt is not significantly greater than that of GDP for several years in a row it does not represent a severe problem for the economy.

etc.