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Market Timing With Decision Moose ... New Signal

Old_Skeet
edited April 2014 in Fund Discussions
On 4/11 Decision Moose's new signal is EDU ... Long Term Tresuries.

The signal is linked below ...

http://decisionmoose.com/Moosignal.html

Moose History is linked below ...

http://decisionmoose.com/Moosistory.html

I don't follow the Moose, per say, as this is a single position strategy, but I do like to check in and to see what his signals are. Sometimes I find them insightful and other times ... well, I wonder what he is seeing that I might have missed. Although long term treasuries have had a good run of late ... This call could be arriving late to the party. We shall see.

Old_Skeet

Comments

  • beebee
    edited April 2014
    Thanks Old Skeet,

    The main criticism I've fallen victim to for referencing this site is the fact that it's "play money". "Show me the money...where are the receipts".

    O.K, fair enough.

    Call me clueless, but to me this site is no different than any other data point to consider and personally I like the small investor feel the site has. I naturally take it with a grain of skeptism, but I hope everyone does this throughout Internet Investing Land.

    Judging by the bold text in the Moosistory section of the site these "calls" are profitable about 50% of the time. To me, Long Term Treasuries (EDV or BTTRX) in a portfolio serve three purposes:

    - They provide a coupon return better than cash so long a interest rates remain unchanged.
    - They have the potential to be "bid up" as a result of a market correction when other market participants seek a "flight to safety" investment.
    - They provide a coupon plus capital appreciation when interest rates fall. Remember Japan...rates could fall further here in the US if deflationary pressures reemerge.

    EDV seem like a counter intuitive place to park money right now from a rising interest rate standoint, but as I mentioned above that is not the only scenario to consider. I don't subscribe to The Moose so I can't help paraphase the Moose's decisionmaking process for this switch.

    Recently I posted a 5 year chart of BTTRX (Zero Coupon Long Duration Treasuries) and VTSMX (Total Stock Market Index). It appeared to me that a significant divergance exists between these two positions right now. It could go on for awhile, but for no other reason than to rebalance a portfoio I would be selling some of my equity winners (your outperforming equities funds) and buying some fix income (your underperforming fixed income funds).

    Nothing wrong with employing basic periodic rebalancing.

    Here the chart I was referring to that I created:

    image
  • MOZART325
    The Moose switched to EDV on April 11 and stood pat this week. He missed last weeks rally in SPY. One good thing about the Moose's picks is that they are highly liquid and easy to trade without moving the market.
  • jstr
    You might also find our value in our approach : http://stockmarketmap.wordpress.com/
  • cman
    Relative strength indicator based algorithms depend on short term persistence of performance. But they do have a failure point.

    When there is a lot of sector rotation going on, one uninvolved lower but steady sector may actually look good in relative terms compared to everything else. That is a false signal which may highlight it at its top (when other more volatile sectors recede below it) or get you into it while some of the higher beta sectors eventually take off.

    So, you always need a sanity check rather than a completely mechanical decision but then that can be influenced by emotion, biases, etc.

    There is no easy solution that always does the right thing.
  • TedTed
    Zero Treasuries Please !
    Regards,
    Ted
  • beebee
    edited April 2014
    Since you said please, here's your video. Enjoy!
    wealthtrack.com/recent-programs-ROBERT KESSLER – IN DEFENSE OF BONDS

    EDV (Zero Treasuries) vs. IBB (Biotech) over the last 5 years:

    image
  • MOZART325
    So far the Moose is up 2% since April 11 with his EDV
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