Market timing is unnecessary

Quote from mrmarket:



I still understand why you guys focus on the 6 losers vs. the 44 winners that I've had during the same period. Why does that matter so much. It's like a pitcher throwing a two hit shutout and reporters writing about the fact that his performance stunk because he gave up two hits.

Face the facts. Clearly my well documented trading record is much better than any others I've seen on the internet or on TV.

Now can we get back to to original topic?

This is an attempt to get back to the topic you introduced.

You need not reply, your most recent reason should continue to suffice.

Of your recent trades over a few years you knockeddown over 80 15% profitable trades. Occassionally you restart your record keeping. As you did a couple of months ago.

Now you have about 15 streams of money you invest.

Who cares how you got to 15 streams. I don't.

I recommend that people time their investments and keep their hold periods very small. Attached is the list that was made up over the weekend to fill the streams of capital people are trading.

Our objective is to invest for a short time and to time the investment. We bought SCHN and NTAP this am. URBN was rejected because it had not done 5 cycles of profit in the last 6 months.

We hold about half the time (3 to 4) you did for CLSR. That is why we make up a new list of 10 stocks every week. We do not have a strict profit target but 20% is the review standard we set to qualify.

We watch and select stocks as they come to the bottom of their cycle. They are very high quality stocks.

The timing for the buy is determined by a leading indicator of price, volume. Look at the "unusual" column which tabs the % of the 65 day av volume. As it ran up rapidly this morning we had buys on about half the list. Those whose daily % of increase in price drew our attention as the volume bursts started the up half cycle.

You, as you say, cannot understand what I write. the attached chart demonstrates how to get a list that will BO in price right after BO in volume. This is a timing approach.

You run your Bros portfolio not using timing. It looks like it makes 72% this year. This approach is doubling every 1 1/2 quarters in this type of market.

By reviewing that you cannot understand what I post and your statement that what you do is the best you have seen on TV and the intenet, I now understand why yours is best for you.

It looks like I may be an axample that you exclude because of the reason you give. It may be true that many many others are out there like or better than yours. I know mine is and I have seen others that do quite well (better) than yours. They have one thing in common. They use timing as a facet.

The last time your system got filled with holds that didn't make 15%, you started over here with a journal operated by a moderator whose name was phoenetically the same as your spouses. She said you started over for an assortment of reasons and that you would fill the 15 streams with investments as they came along.

In a timing apporach, people have a surplus of stocks at all times to enter as they sell ASAP at profit peaks.

Your example of CLRS doing xxx% a year is what it is like when, by timing, an investor turns over capital every 6 days.

Here is your optimum picture without timing. 15 streams each traded every 4 to 6 weeks for a year. An average of 10 turnovers a year. You have to trade 150 stocks to do this. So far you have done just over 80 or a half a year's requirement. It has taken you about 2 to 3 years to do this.

Your annual success will be about a ROI of 400% per year with the 150 transactions done. You now get 72% for your bro.

Currently the timing ROI is derived from 9 weeks making 39%. this is 9 into 52 to get 5.78. I raised 1.39 to the 5.78 power to get 671% ROI.

I believe you can easily come up with 150 stocks that will do 15% in 4 to 6 weeks. I have a lesser goal to reach. I need to select and trade 150 stocks just as you do, but I only need to hold them a few days and average the gains you see on the attached sheet.

I only need to do about 3 a week from a list of ten as you see. 24 trades did 39% on capital using just 4 streams instead of 15.as you have.

Timing seems to have merit compared to your approach. Our difference is timing to a large extent.

We both traded LEND it looks like. I settled for 13 and 14% on respective trades. Each was a few days because I timed it. you held it once and made 1 to 2% more (15%) after a long hold where you could have done additional trades.

Because of your statement that you can't read this stuff, you can hang onto the notion that you are doing better than anyone you have ever seen. Funny and sad.
 

Attachments

MM,

Consider this. You have 6 losers now. Of your next 10 buys you have one loser (I'm being generous) so now you have 7. You take profits and make 9 more new buys and one, again, is a loser. Now you have 8 losers and you can make 8 more new buys. And so on.

Do you see where I'm going with this if you continue to hold on to your losers? Certainly some prof. at Worton taught you this basic concept of holding losers sometime in your four years there! Or maybe Worton doesn't understand Investing 101 either. Someone has to be holding the bad stocks too. Maybe it is you and your classmates?

Wally
 
Quote from pspr:

MM,

Consider this. You have 6 losers now. Of your next 10 buys you have one loser (I'm being generous) so now you have 7. You take profits and make 9 more new buys and one, again, is a loser. Now you have 8 losers and you can make 8 more new buys. And so on.

Do you see where I'm going with this if you continue to hold on to your losers? Certainly some prof. at Worton taught you this basic concept of holding losers sometime in your four years there! Or maybe Worton doesn't understand Investing 101 either. Someone has to be holding the bad stocks too. Maybe it is you and your classmates?

Wally


It seems like the ET clan seems to think that once a stock becomes a loser, it never ever becomes a winner again. As if it gets a Scarlet Letter or something. Many of my winners were once down and occupying the spots of which you speak. But guess what, they rallied into winners because they were great companies. Please someone in this community acknowledge that you can fathom this possibility.

By the way, as of today, of my last 51 trades, 47 were winners and only 4 are losers. (Yep, my 6 losers became 4 losers). I continue to hold onto my losers because they are great companies that WILL outperform the market.

Now you SEE how this works????
 
Quote from Grob109:




Because of your statement that you can't read this stuff, you can hang onto the notion that you are doing better than anyone you have ever seen. Funny and sad.

Dude...I have no clue what you are talking about.
 
Quote from mrmarket:




It seems like the ET clan seems to think that once a stock becomes a loser, it never ever becomes a winner again. As if it gets a Scarlet Letter or something. Many of my winners were once down and occupying the spots of which you speak. But guess what, they rallied into winners because they were great companies. Please someone in this community acknowledge that you can fathom this possibility.

By the way, as of today, of my last 51 trades, 47 were winners and only 4 are losers. (Yep, my 6 losers became 4 losers). I continue to hold onto my losers because they are great companies that WILL outperform the market.

Now you SEE how this works????

Too bad it doesn't work that way all the time or the eventual return on your money is nill when they do come back. Good luck with your losers.

Wally
 
Quote from pspr:



Too bad it doesn't work that way all the time or the eventual return on your money is nill when they do come back. Good luck with your losers.

Wally

I've documented my record since January 2002. Why are you focusing on the 4 losers in my portfolio while you ignore my 47 winners??? This system has been extremely profitable for me yet you people in ET stamp your feet and cry because I hold my losers (which eventually become winners). You must face the facts. I know how to pick great stocks in great companies. What other conclusion can you possible draw from my well documunted record??
 
Quote from mrmarket:



Dude...I have no clue what you are talking about.

That's what the paragraph you clipped says. It says that you do not understand what I am talking about.

I understand what you are saying and you do not understand what many ET'ers are saying and I am part of that group.

You say you hold a stock for up to a year and a half and then it makes 15%. You say you hold a stock that makes 14% and when it goes back down again you hold it several months until it makes 15% and then you sell it.

You have 15 streams of capital. 51 trades means that you have turned over your capital 3.40 times. Compounding it is a capital advance of 61 % the amount you made for your brother in 10 months. Cheers.

OTOH The last time you started over, you had 13 inactive streams and you were only trading one or two. The 13 streams cancelled were losing more than the active streams were making.

Your model has a life expectancy determined by how often you have to restart your model.

The key ingrediant of your methodology, from the beginning, was to add streams as required to keep it going. 2 then 3 then 5 then 8 then 10 then 13 then 15 then cancel and start over with 15 as posted.


Someone else illustrated the pattern here. You beg to differ and say that after a while all good stocks do give you a belated profit at your target of 15%. This is one of your key points for not using timing. I think after a while the losers you hold can't pass your test for selection. Then after a year or so they may get back into the selection process successfully and then do their thing. You have never shown that as a reason your longest holds finally are sold. People get the impression that once they are chosen, they stay fresh for up to a year and 1/2 as viable holds.

Starting over every so often sort of counters what you are advocating.

I look forward to how you deal with he questions of others. I am not asking any questions because I do not want to step in front of all those who asked before.
 
Quote from mrmarket:




Did you ever get in a fight when you were all hammer head sharked and some guy who you thought you could handle easily did a tap dance on your face? Well that never happened to $$$MR. MARKET$$$. Usually when some guy’s girlfriend was drooling all over me and he got all faceful, he’d take her to another joint. However, I have seen some guys come in on Monday morning after a rough weekend with Band-Aids all over their face. I bet they would be happy if there was a way for them to get the crap beat out of them but not have to wear Band-Aids. Well… there is!

Today I bought CLSR (Closure Medical) at 30.45. I will sell it in 4 to 6 weeks at 35.14. Here’s why I like CLSR:

CLSR’s stock is up 279% off of its 52 week low. The R^2 for this price climb is 0.84 which illustrates very strong and sustained price momentum.

Liquiderm is applied by squeezing drops from a small plastic bottle onto a sponge-tipped swab and rolling the sponge over scrapes or cuts. Within seconds, the liquid turns into a plastic film. Instant Band-aid. Another big advantage is that it's really good at stopping bleeding much faster than a bandage. Since the Liquiderm eventually wears off by itself, you never have to worry about kids crying after you rip the Bandaid off with the hair and scab still firmly attached.

Closure has a history of signing deals with big names. A unit of Colgate Palmolive Co. partners with Closure on Soothe-N-Seal, its canker sore sealant. Now they have J&J in their pocket. Big names for big buckaroos.

Closure’s lead product, a surgical glue called Dermabond is designed to replace up to 30% of all operating room sutures. Not every physician has the ability to turn a sow's ear into a silk purse. Now instead of Babar the clumsy suturing your beloved first born after they slip in the tub and split their chin, Babar can use a ProPen to strategically deliver the space-age surgical glue Dermabond to fix up little Johnny. Better yet nurses can also use the product freeing the doctor to better spend his time checking the sports page, playing golf or getting a S & T. Dermabond can be applied in one-third the time it takes doctors to stitch an incision closed. You basically just paint it on so it doesn’t hurt to be applied or removed. No more crying patients. Dermabond sloughs off naturally in about five to 10 days. That eliminates the need for a return trip to the doctor to have sutures removed.

All of this stuff sounds great in theory but will the customer buy it? They sure will. Sales have been growing by 25% per year for the last 4 years. $$$MR. MARKET$$$ believe sales will pass $35 million for 2003 which should get earnings of $0.55 share. Even the wimps at First Call think CLSR will make $0.65 in 2004. This modest prediction will get the stock price to 38.

While the P/E for CLSR is kind of pricey, you have to remember you are looking at a brand new product which is just starting to get acceptance. How many people do you know had a DVD player 3 years ago? CLSR has been solidly profitable for over 3 years now. They have moved their company into the realm of self-fueled growth capability.

Feeling a little nervous? Here’s what the boss had to say about their most recent quarterly performance: “Obviously we are pleased with the momentum in our business and the growth realized for the quarter as well as year-to-date. CLOSURE's unprecedented performance derives not only from our own internal initiatives, but also from those of our partners at Johnson & Johnson. By the beginning of next year, we plan to introduce new line extensions to complement current products which we believe will drive future growth." Wow! More fun products to make more monies. As CLSR increases their sales, they improve their gross margins via volume efficiencies.

Investors looking for a value play really shouldn’t be looking at CLSR. Anyone buying this stock is buying this idea. The good news is that this idea is being accepted.

So go ahead and drink 1000 beers and go pinch some chick’s butt this weekend. No matter what happens, you won’t have to go to work Monday with Band-Aids on your face.
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I am HUGE! Bring me your finest meats and cheeses.

- $$$MR. MARKET$$$



Wow....looks like I did it again. It's not my fault, but I'm easily the best stock picker on the planet.
 
You are correct...and the point of my post is exactly as I said. Yes, the overall market was in the doldrums, yet I was still able to uncover a winning pick with the use of my quantitative momentum model AND fundamentals.

It's so easy to make money. I'm laughing laughing laughing!
 
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