Market timing is unnecessary

[jem]

Mr. Market, I read your first page and the last two. Grobs points seem to be 100% correct if you really do keep adding streams and starting over.

However, more importantly, I question the validity of your initail assumption.

You said the market goes up. I say what is your proof. Grant Noble goes over some of this stuff in his book.
Are you talking after inflation. I say how many stocks are still in the Dow that were there 80 years ago. What about all the stocks that disappeared?

I think liquidity moves the market and the baby boom generation has inflated every stat there is. What happens when they need their money for old age?

No one really knows that the market goes up. What happened to the russian market before communism?

 

[mrmarket]

Quote from jem:

Mr. Market, I read your first page and the last two. Grobs points seem to be 100% correct if you really do keep adding streams and starting over.

However, more importantly, I question the validity of your initail assumption.

You said the market goes up. I say what is your proof. Grant Noble goes over some of this stuff in his book.
Are you talking after inflation. I say how many stocks are still in the Dow that were there 80 years ago. What about all the stocks that disappeared?

I think liquidity moves the market and the baby boom generation has inflated every stat there is. What happens when they need their money for old age?

No one really knows that the market goes up. What happened to the russian market before communism?

People who fear the unknown probably should not invest. When I go to Vegas, I have a pretty good idea that Oklahoma will win, though I'm not certain. To a large extent, the result is unknown. However, I weigh the possibilities and, if I sense the market has priced incorrectly, I will take advantage of this inefficiency.

 

[mrmarket]

$$$MR. MARKET$$$ once again displays his market dominance.

I sold CLSR today at 35.14 . Remember I bought it at 30.45 on Oct 31? That's a 15% gain in only 3 weeks!! Can you do that?? You? You? You? See how HUGE I am. I use a computer model that I perfected in graduate school. Picking stocks for me is about as difficult as turning on my TV.

But only $$$MR. MARKET$$$ knows how to use it. You cannot bench press 385 lbs or hit a golf ball 300 yds right down the fairway. You cannot drink a case of beer at one sitting. That's ok, we all have our individual talents.

What this all means is that we can have Thanksgiving for the fact that $$$MM$$$ will be generating another fantastic winner in the next few days.

I am HUGE!!!

Bring me your finest meats and cheeses!!

$$$MR. MARKET$$$

 

[jem]

Mr. Market, with my new huge driver I hit everything straight and I can he hit them 300. I am not huge but my driver is. 300 and straight is not that big of a deal anymore. Just like betting stocks will go up during a bull market. You should never confuse brains with a bull.

 

[mrmarket]

Quote from jem:

Mr. Market, with my new huge driver I hit everything straight and I can he hit them 300. I am not huge but my driver is. 300 and straight is not that big of a deal anymore. Just like betting stocks will go up during a bull market. You should never confuse brains with a bull.

Excuse me, but it looks like during the period I held CLSR (Oct 31 to Nov 24), the market indices were down around 4% while CLSR was up 15.4%.

What say you now?

 

[gms]

Quote from mrmarket:

Excuse me, but it looks like during the period I held CLSR (Oct 31 to Nov 24), the market indices were down around 4% while CLSR was up 15.4%.

What say you now?

I'd say that during the same period you've been holding stocks losing value such as CBK, PTSI and WSB. What explains that?

Your exuberance over a gain makes my heart chuckle. No offense or comparison meant, yet it reminds me of my son when he was three and how excited he got when we took him to see Sesame Street Live and he got to meet Big Bird (You understand how seeing your children's joy can gladden a parent's heart).

 

[jem]

Mr. Market while I hope your claims are all in good fun and you are not going to get defensive. You do not really think that buying and holding and then claiming see I made money is a system do you. After a certain period of time you have to admit the signal that causes your entry no longer becomes significant and after that you are are the whim of the overall market direction. Yes?

So one of your recent calls was up in a choppy market. Would you say that is statistically significant. Now come on lets admit this is all fun and games and you are not serious.

For lack of more time I refer you to that Taleb book fooled by randomness (or some similar title). There Taleb explains what is wrong with your claims.

I see you as very similar to his neighbor who traded at a big firm with some success for a few years. That is why I assume you have been jesting.

 

[mrmarket]

Quote from jem:

Mr. Market while I hope your claims are all in good fun and you are not going to get defensive. You do not really think that buying and holding and then claiming see I made money is a system do you. After a certain period of time you have to admit the signal that causes your entry no longer becomes significant and after that you are are the whim of the overall market direction. Yes?

So one of your recent calls was up in a choppy market. Would you say that is statistically significant. Now come on lets admit this is all fun and games and you are not serious.

For lack of more time I refer you to that Taleb book fooled by randomness (or some similar title). There Taleb explains what is wrong with your claims.

I see you as very similar to his neighbor who traded at a big firm with some success for a few years. That is why I assume you have been jesting.

Please explain to me how 43 consecutive profitable trades of 15% or better is statistically insignificant. I'm listening....

 

[gms]

Quote from mrmarket:

Please explain to me how 43 consecutive profitable trades of 15% or better is statistically insignificant. I'm listening....

More accurately, as of 11/10 it was a 12.6% average per trade for all holdings, with holding periods varied from a few months to almost two years. Whether such an average return is worth a two year's hold, or even a hold of a few month's, I'll leave individual readers to decide for themselves. But no matter, very significant is the constant need for new capital infusion for the plan to continue, which you haven't addressed. I asked several specific questions pertaining to that in one of my previous posts as I was curious as to how you handled that aspect.

I'll pass a quote along from someone who has observed many traders (although you may not actually qualify in the strictest sense as a "trader") as part of his career that I know you will disagree with, but here it is nonetheless:

"Many traders think they can stay out of trouble without using stops, thanks to their superior market analysis. Trading is a high wire act. You may walk that wire a hundred times without a safety net, but the very first fall can cripple you. You cannot afford to take that chance. No amount of brains will help you if you abandon stops." - Dr. Alexander Elder, "Come Into My Trading Room", pgs. 169-170.

 

[mrmarket]

Quote from gms:

I'd say that during the same period you've been holding stocks losing value such as CBK, PTSI and WSB. What explains that?

PTSI is up 5.4% today. Thank you...thank you very much.