Howdy folks,
Took ~ 2 units to 'cash' from equities over the past several sessions. Note that last week we had a 'true selling day' as Gary used to talk about. In addition, the geo-political situation is more and more like staring into a can of worms.
feh. I don't need it. Sell in May and go away? feh. Close enough for gov't work.
BTW, I still have a wee play going in the junior silver miners.
and so it goes,
peace,
rono
Comments
But I really want to get the courage to pull the trigger and take some profits soon.
Market timing is simply impossible. At least that's the general conclusion currently preached by the academic and many professional market wizards.
The truth is likely to be somewhere in the imperfect region rather than at the impossible end point.
Many candidate signals have been proposed, tried, and replaced because of imperfect performance. But one criteria has survived a long time even acknowledging its precision shortcomings. That indicator is the yield curve slope. A positive slope suggests a positive economic growth outlook. Here is a Link to one such yield curve recent analysis:
https://www.bloomberg.com/news/articles/2016-02-01/has-the-most-reliable-u-s-recession-predictor-lost-its-value
That market direction signal is still positive, so the current forecast is market optimistic. So is the consumer confidence indicator which is at an extreme high, much above its long term average.
Agreed that these are imprecise tools, but it's the best we can easily access. At least for now, I'm not worried. Our disparate worry levels is what makes for a vibrant marketplace. In the end, luck rather than skill will determine the outcome. Good luck to all of us.
EDIT: For balance, here is a reference that takes a negative view of our current market:
http://www.msn.com/en-us/money/savingandinvesting/5-signs-the-trump-stock-rally-is-coming-to-an-end/ar-AAm3DOg?fb_comment_id=1234325496660459_1234618013297874#page=1
It's easy to find an assessment that either agrees or disagrees with a viewpoint. All should be considered, especially those that diverge from your own judgement.
The reference includes some work by Jim Stack. He uses a multi-signal composite when making a judgement. But he has been market negative for over a year now. You get to choose your own poison.
Best Wishes
@rono you do what is best for you. not earning money is better than losing money. rock on.
I started building portfolio at TIAA. And I did take some money out from other accounts. So compared to beginning of 2017 I've still put more money into the market, not exactly raising cash.
In my retirement accounts I sold 11% of most of the assets that I manage using my ANALysis. My models tell me to be 66% invested right now, but I never find the tape. If they make lowe lows I will sell another 11% until I reach 66% or targeting whatever my models tell me. So here you can say I raised cash.
I sleep well doing what I do. I'm a genius just because of this reason.
However, market place yields on bonds may provide clues as needed if there is an accompanying twitch in the U.S. broad equity value.
For what it is worth ... I harvest capital gains (from time-to-time) and raise cash as a standard operating procedure. Better to do this rather than to see them get vaporized in a strong market downdraft. Now, it is not to say I go all in and then all out which I think of as market timing rather I throttle my equity allocation through a rebalance proceess and the harvest of capital gains as a by product of the rebalance process. And, with this, I have ample cash so when the market does pull back I've got necessary cash to do some buying and then repeat the rebalance process as the market recovers. Some call this playing the swing. I call it, putting cash in my pocket through a systematic rebalance process.
And, so it goes ...
Trailing note: I like @VintageFreak also take most of my mutual fund distributions to cash. In addition to the above process this helps build my cash allocation in the range of 4% to 6% each year and in some years up to 8%.
I have a few "cash like" mutual funds that do not have 90 day holding periods. Do you try to achieve a return while in the these cash positions?
Have you found any "cash like" funds you like?
The only cash like investments I have are CD's which are a form of time deposits. I use to have some money market funds that had one day settlement; but, due to the issues that now center around them I hold only FDIC insured deposits or securities.
Any short term bond funds that I hold are just that and not cash substitutes. While, from time-to-time I have taken some cash and open spiff positions (special investments) in playing market pullbacks, etc. once the money left the cash area of the portfolio it was no longer considered cash.
So, when I say I have a cash allocation of 20% ... I really do.
The Admiral share is available for $50K minimum, ER 0.12%, SEC yield 1.34%.
Warren Buffet always keep a healthy cash position for good reasons, and the long term record of Berkshire Hathaway vs. S&P500 shows.
http://ericcinnamond.com/do-something-do-nothing/
Not hardly trying to time the market. Silly stuff. We had a true selling day and I had made a few pesos playing the junior silver miners and SQM (lithium play). feh. I believe it was Art many moons ago on Salil's board, 'you can never go broke taking profits'. Oh, and just to do a wee bit of trolling, Max Gunther talked about never hesitating to take profits in The Zurich Axioms. And lastly, at 68, I go where I'm comfortable.
As for my choice? In this case, I'm at Price with a sweep account and using Spectrum Income RPSIX.
From a macro perspective, count the potential black swan events we face right now.
and so it goes,
peace,
rono
To be sure, no one here has trumpeted "market timing." What I hear is some obviously older mature investors saying that when times are good they like to tuck away a little extra cash. And times are very good if you've been invested much of the past decade.
I think of cash as the most highly liquid form of one's investments. It can be stashed away for a rainy day, reinvested again later or even hidden in a safe if you prefer. And, most importantly, cash can be spent ...
To wit - Yogi Berra exclaims in a well known TV Ad: "And they give ya cash - which is just as good as money." Yogi had a way of cutting to the chase.
There's been several threads about the issue of timing lately. Let me say I think younger investors with multiple decades of potential growth ahead shouldn't chance being out of the markets. But if we say categorically "Market timing is simply impossible" we toss out the window a whole lot of sage advice from experienced investors over the ages.
"Buy low. Sell high."
"The time to buy is when there's blood in the streets."
"It's not what you buy. It's what you pay that matters."
"Bulls make money. Bears make money. Pigs get slaughtered."
Talk about timing, eh? I'm wondering who is going to buy all of the vacation properties in Michigan when the majority of we "older" folks are, well; gone to some other place.
With the high pay/benefit union based jobs of yesterday that overwhelming pushed Michigan's economy for many decades being "dust in the wind", many of the boomers kiddos have left the state, too. They may inherit vacation properties, but likely will choose to sell and have the money for their life in another state. The days of Michigan having the highest registrations of "toys" (motorcycles, snowmobiles, boats,etc.) is likely gone forever. I recall the high debt ratios of dual income husband and wife who both worked for Generous Motors with lots of overtime. Many had enough payment books for whatever to fill a normal sized shoe box. This circumstance was noted many times from folks I knew in the real estate business. And demographics (the boomers) will also have an impact when the monies from defined pension benefits stop flowing into the economy with the passing of both boomer parents in particular. Yes, some children of the boomers may inherit an IRA that will be spent into the economy, but the other pension and Social Security money will stop.
Not unlike a few younger folks I know who enjoy the 60's era autos and having noted the same to them; that the boomers will unload these in bulk and prices will trend down. Just knew watching the price trends for your vehicle of choice.
Now the other timing that is subject to discussions here, from time to time.
Folks have their methods to this, yes?
One can find the "re-balance" the portfolio every January. What the hell does the calendar have to do with this, except that the method has been discussed for decades and for some becomes a "habit". So, these folks are not only timing the market by a calendar, but also perhaps using a habit or psychological crutch for the decision. This is still market timing, whatever the personal habit.
Market timing with buys or sells to maintain a portfolio balance that lets one sleep at night. Still a form of timing, eh?
Any "timing" at this house usually comes from a 50/50 mix of technical and intuitive.
I recall many articles continuing to push buy signals through the first several months of 2008. Our portfolio mix at the time found its highest price value, during this period, on October 31, 2007 (yes, Halloween Day). Moving through the end of 2007 and into 2008 found very extreme movements of the major equity sectors, in particular. By the time mid-June of 2008 arrived, are portfolio had become 90% cash (MM) and 10% PTTRX. We watched the market recover for almost two months wondering if technicals and the smell of the markets had been misjudged.
As to the yield curve today. One has to consider the starting points today and how valid or possible change indicators may be obtained. As to yields and the economy, the Fed. could leave the Fed. funds rate alone, if a problem arose with a low/no growth economy; and they and the Treasury could simply buys Treasury issues, in my under-educated opinion, to "fix" rates/yields.
We still do not have any direct investment in "cash"; aside from what may be inside of some funds directed by active management.
I do not "knock" anyone's method of determining what and when to balance their portfolio's holdings and what may be the contents. All comfort zones are different, yes?
Our desire and time to continue to monitor what we choose to be actionable items for investments will determine when a "full balance" of our portfolio will have to occur and where to put the money on a slow burner. The time will arrive, to lose the desire to dabble with all best intentions, among the humongous global players.
Those who develop or have very good intuition and the ability to understand some of the most basic technical related to the investment world should survive most of the turmoil.
Enough of my mental wanderings.
Lastly.........hey, the snow in Michigan is gone for a few months; yes?
Take care,
Catch
Hope you're doing well. Here in Michigan, the legislature has pretty much turned us into a 3rd world country due to their insane cutting taxes on business while refusing to cut spending or raise other revenues. Our schools are now some of the worst in the nation (er, this is coming to all of you now with The Betsy incharge). They roads and bridges are crumbling, we're poisoning people in Flint with bad water pipes and etc.
Now they're talking eliminating the income tax. cretins. Hell, the gov is talking about reinstating the ability to give huge tax breaks to businesses moving to or expanding. Idiot. Horse and buggy thinking.
The current land use policy tact is to 'place make' by making your location a great place to live and raise a family. The people will move there and in this day and age, the jobs will follow them.
At the state level, they should focus all their efforts on providing affordable education at all levels, protecting the environment and providing infrastructure. If the did this, everything else would factor out of the equation.
cretins,
and so it goes,
peace,
rono
In other news, I'm feeling much better on the new meds and they gave me a pass out of the home for a whole month this time! They say my grasp of reality is a little shaky, but the criminal tendencies seem to be under control.
OJ
We're all probably old enough to remember the 70s & 80s when a married couple with a HS education working the line in Flint or Pontiac could take home $100K a year with a little overtime - more money than most teachers were making back than. That money went into 4-wheel drive pickups, off-road vehicles, and often a second home near Mullet Lake or some other spot 3-4 hours to the north. Times were good.
Alas - the state's economy is but a shadow of its former self. Many causes for sure. Also many repercussions - including a deep sense of disenfranchisement by those so affected.
(Catch - I think I addressed your comment on real estate values in a roundabout way.)
Prof Ballard has stated that the auto industry peaked in 1973. Bring back mfg jobs?!? Oh really.
And in all fairness to both sides of the aisle, Lansing and most every other state capital and Washington have been ignoring the issue - the transition from Industrial Age to Information Age. They've thrown most Americans under the bus and those folks are not happy. They wanted change and action starting with Bubba (no luck), then Jr. (no luck), then Obama (no luck) and now Trump (jury still out).
There were two paths to the middle class - mfg jobs or education. The former has basically disappeared and the latter has been priced out of the reach of most Americans (w/o incurring a hideous debt). You want to see an Albatross around the neck of our economy - look at student debt. Instead of graduating and getting a job and buying a car and saving for a house down payment, they spend 10+ years paying off their debt.
All the trade deals didn't cost jobs - they created different jobs and Washington ignored the displaced workers. Why can they make solar panels and windmills in West Virginia? Or Benton Harbor or Flint? I'll bet you serious $ that every coal miner, if given the choice and the training, would leap at the chance of making solar panels or windmill blades.
Immigration problem? Nonsense. Require a green card of everyone or else 5 years hard time plus deportation. Issue them readily. This mandates all immigrants paying taxes and SS and all AND being able to be tracked. HOWEVER, you must also fine any employer at any time $10K per head for employing someone without a green card. Ah, there's the rub. Keep the citizenship requirements high where they are and should be. You want capitalism? You need competition and the includes the labor market.
[rono takes a deep breath]
and so it goes,
peace,
rono
It's all about "marketing" to the "fears" of people.
Not sure if anyone watches series "American Crime". I suggest everyone watch it from beginning. You will see the kind of jobs we are having illegals do are sometimes those Americans don't want to do and/or it is keeping prices of the the food you eat lower than they would be otherwise.
Ah, Leelanau. Yes. Stayed in Traverse City last summer for 10 days and journeyed the highway M-22 route that we have visited numerous times over the years. From TC and going north along the lake shore all the way to Harbor Springs....my, what a lovely summer drive and stay(s) along this area. I worked through many parts of this area in the way back days. I live in the wrong state for the winter months, as the only time I really enjoyed the winter was before age 16; As enchanting as this part of Michigan is in the whole, I don't know that I would have lived in the area; although if the outside temp is 10 degrees; one may as well have pleasant surroundings, eh? Being normally curious about what exists where I might have my butt parked at a given time, part of my local checking always includes what is happening in a local real estate market and trying to find the small and most popular with the locals diner/restaurant to gather a bit of the local gossip. My thoughts about vacation home/cottage real estate prices going forward would have to become compartmentalized by area, for Michigan. My original thought was more of a generalized view. Regarding the area you mentioned and west coast waterfront likely has more implications. There will likely remain the very expensive areas from Traverse City (area) and north along Lake Michigan to Harbor Springs. I can't speak for today, but looking back 30 years and more, much of the expensive/sweet location waterfront was held by generational/old money from Chicago and the greater Detroit area; being monies from the great industrial era 50-100 years ago relative to the wealthy of the time. Among the most desirable areas of true waterfront properties, it was not uncommon during the beautiful summer months to find 3 expensive cars in a driveway with license plates from Florida, Illinois and Michigan. At the time, this observation told a story of generational continuation of property ownership. There is new and current wealth in these areas today; being Madonna (don't know if she stills owns a house in the area), Tim Allen (Michiganer) and others with the monetary means.
This property appears to be a very attractively priced at an estimated $110/sq. ft. which also includes 5 acres of land and out buildings. But, is is really not waterfront (although listed as such). The beach is 900 feet away through someone else's property, although all Michigan shoreline is now public access for walking and such. Winter months at this house would be a royal pain in the butt and a full time cleaning nightmare, or pay a lot of money for the winter access service. Scroll down this listing page to review the price history from this listing from 2 years ago. This listing was posted 8 days ago to get ready for the summer sale, eh?
https://www.zillow.com/homes/for_sale/Leelanau-County-MI/pmf,pf_pt/house_type/106444768_zpid/2390_rid/waterfront_att/globalrelevanceex_sort/45.640927,-85.128937,44.717465,-87.062531_rect/8_zm/
We continue to be renters of desirable lakefront properties, as needed; for we do not choose to have mortgage debt.
As to my original comment about vacation property in Michigan and its future value; I was more directed to the many 1,000's of summer cottages/homes in the forest areas that may be near or at the 1,000's of inland lakes, rivers and steams. There is no doubt that some of these will be inherited into families if they can afford the maintenance, insurance (unoccupied for periods) and non-primary home property taxes, etc.
If I took a choice today for the greater area in discussion; I would park my butt in or near Petoskey.
Okay, this jabber box person needs to back off the coffee for this morning.
Take care,
Catch
Michigan has problems for sure, not unlike many other states. I surely don't intend to paint Michigan as some sort of turd pile of a state. There remain many wonderful aspects and tourism draws a lot of money into the state through all of the four seasons. A saving grace for money inflow into the state.
Related to what was and what is, I sniffed around a bit to access manufacturing info for the non-Detroit metro area. General Motors in Genesee County, which surrounds Flint, Michigan (the birthplace of GM) had an employee level of 77,000 in 1978 from numerous related facilities; and today this employment number is 3,200.
If one assumes data studies about ancillary employment which supports all of these workers at a 1:4 or 5 ratio, tis very easy to discover the enormous impact of change into a community. My old, stuck in my head number was 90,000 employees during the late 1970's, but 77,000 is a serious enough number for math purposes.
As we have discussed here many times, technology will continue to impact so many areas. Ford announced a few days ago about investing $1.2 billion in Michigan facilities which will create 130 new jobs. These numbers state the situation for employment and technology.
@rono My apologies for perverting your original thread topic. We have discussed cash and investments in the "indirect" path, eh? I really don't like to misdirect threads.
Regards,
Catch
Regards,
Ted
Michael Holland Says Times Like This Need Some Cash: Video: (He was a frequent on the old Wall Street Week with Louis Rukeyser.
https://www.bloomberg.com/news/videos/2017-03-30/michael-holland-says-times-like-this-need-some-cash-video
Skeet
People go to Ann Arbor, then get out. Really sad.