*Investors Blog*

[ArrestMeRedZ]

The last time I tried to time the market was about 3 or 4 administrations ago. I was convinced the economic stats put out were manufactured and the market was about to tank so I went to cash. I was half right. Lost out on a 20%+ upside in a short period of time.

I'm not saying it can't be done, but all past data indicates 99% of people who think they can time the market are wrong. This is the sole reason most investors underperform basic market index funds and the example above proves I fall within that 99% group.

In my market investment lifetime, I've been through 3 major downturns - Y2K, The Great Recession, and C19. None have had near the negative impact on retirees that inflation has had. IMO, the 70s and early to mid 80s inflation turned more retirees into paupers than all the market crashes combined. Even the relatively lower inflation we've experienced lately has been painful, although real estate and stock market gains have mitigated its effects on my personal budget.

I've been retired for just short of 10 years now. While my basic needs are met by SS, retirement pay and rental income, I draw on my accounts for discretionary spending. I keep 5 years worth of draws in a cash bucket to avoid sequence of return risk. The remaining ~80% stays invested.

I really want to pull funds from the market now. I just have to keep reminding myself I'm not as smart about market timing as I think I am.

 

[Pablo]

The last time I tried to time the market was about 3 or 4 administrations ago. I was convinced the economic stats put out were manufactured and the market was about to tank so I went to cash. I was half right. Lost out on a 20%+ upside in a short period of time.

I'm not saying it can't be done, but all past data indicates 99% of people who think they can time the market are wrong. This is the sole reason most investors underperform basic market index funds and the example above proves I fall within that 99% group.

In my market investment lifetime, I've been through 3 major downturns - Y2K, The Great Recession, and C19. None have had near the negative impact on retirees that inflation has had. IMO, the 70s and early to mid 80s inflation turned more retirees into paupers than all the market crashes combined. Even the relatively lower inflation we've experienced lately has been painful, although real estate and stock market gains have mitigated its effects on my personal budget.

I've been retired for just short of 10 years now. While my basic needs are met by SS, retirement pay and rental income, I draw on my accounts for discretionary spending. I keep 5 years worth of draws in a cash bucket to avoid sequence of return risk. The remaining ~80% stays invested.

I really want to pull funds from the market now. I just have to keep reminding myself I'm not as smart about market timing as I think I am.

Everyone is the same on market timing. Not good.

I’m in a similar situation as you. Just very recently I started to contemplate and work on calling it capital preservation. Basically I de-risked by greatly paring down any equity positions and some overbought bond funds. Fully realizing I am trading off potential future gains as well.

I still participate in the market by 100s not 1000s of shares

I am holding no open options currently

 

[JeffKeryk]

10% tariff on Canada announced.

Very short term maybe. The market has learned to ignore this stuff.

 

[SC Maintenance]

Most trying to "time" the market are looking at some business or political thing. The market cares not. Markets care about liquidity and flows.

I think whenever this bull run ends - which has lasted 25 years and counting, it will be spectacular. The 2000 Nasdaq bubble took 15 years to get back to even not counting inflation. I believe the fact that we are in a 25 years bull run simply means everyone is too complacent.

So having said all that, even in bull markets there are ebbs and flows you can play , and given the latest tweet, I think I will raise a little cash monday pre-market and buy some MSFT and Meta before there wednesday earnings report (already own GOOG), and if that works some APPL for thursday (already own AMZN). Wednesday fed meeting will be -25bps and is already baked in.

 

[Sj08]

Most trying to "time" the market are looking at some business or political thing. The market cares not. Markets care about liquidity and flows.

I think whenever this bull run ends - which has lasted 25 years and counting, it will be spectacular. The 2000 Nasdaq bubble took 15 years to get back to even not counting inflation. I believe the fact that we are in a 25 years bull run simply means everyone is too complacent.

So having said all that, even in bull markets there are ebbs and flows you can play , and given the latest tweet, I think I will raise a little cash monday pre-market and buy some MSFT and Meta before there wednesday earnings report (already own GOOG), and if that works some APPL for thursday (already own AMZN). Wednesday fed meeting will be -25bps and is already baked in.

Not sure I would call it a 25 year bull run with the lost decade of the 2000's... but the last 10-15 year has been a crazy run for sure.

Interesting averages for the S&P500

20 year average P/E ratio 16.17, current P/E ratio 28.47

2000 until now, almost the end of a 25 year cycle, an average annual return of 7.98%, vs 10.2% for the last hundred year average.

With high current P/E ratio, and lower returns over the last 25 years, it wouldn't be a bad idea for anyone invested in the broad market to lower expected future returns.

 

[SC Maintenance]

Not sure I would call it a 25 year bull run with the lost decade of the 2000's... but the last 10-15 year has been a crazy run for sure.

Interesting averages for the S&P500

20 year average P/E ratio 16.17, current P/E ratio 28.47

2000 until now, almost the end of a 25 year cycle, an average annual return of 7.98%, vs 10.2% for the last hundred year average.

With high current P/E ratio, and lower returns over the last 25 years, it wouldn't be a bad idea for anyone invested in the broad market to lower expected future returns.

If you wanted to say the current secular bull started in 2008, you wouldn't get much argument from me. Its academic at this point either way.

However your correct - the calculated forward 10 year returns are zero - or even negative, depending on who's math.

But we all know bubbles can persist much longer than most believe.

 

[Pablo]

I can say the bull market started the very formation of stock markets. With some set backs every so often. Most are relatively short thank goodness.

This is something young people might pay attention

 

[SC Maintenance]

I can say the bull market started the very formation of stock markets. With some set backs every so often. Most are relatively short thank goodness.

This is something young people might pay attention

Yes but how many here are young?

The 29 crash did not correct until 1954 - 25 years - to get to even.

I will point out your also biased by the last 25 years - which may be correct - I am just pointing it out.

 

[Pablo]

Yes but how many here are young?

The 29 crash did not correct until 1954 - 25 years - to get to even.

I will point out your also biased by the last 25 years - which may be correct - I am just pointing it out.

Well I did say most were short

And there are a few young people

 

[SC Maintenance]

Well I did say most were short

And there are a few young people

Yes, well there will never be another 1929 either. They will print out of it.

But there also will never be another 2008 - 2022 - high return and low inflation either - were out of balance sheet space.

So what's next?

 

[Pablo]

Yes, well there will never be another 1929 either. They will print out of it.

But there also will never be another 2008 - 2022 - high return and low inflation either - were out of balance sheet space.

So what's next?

Only @Zee09 knows!

 

[Zee09]

Only @Zee09 knows!

I heard he is on dope

 

[gfh77665]

Most trying to "time" the market are looking at some business or political thing. The market cares not. Markets care about liquidity and flows.

I think whenever this bull run ends - which has lasted 25 years and counting, it will be spectacular. The 2000 Nasdaq bubble took 15 years to get back to even not counting inflation. I believe the fact that we are in a 25 years bull run simply means everyone is too complacent.

I get what you are saying, but the economy is simply different and much, much larger than 25 years ago. Even the techies at that time would have no idea about AI, for example. Outside of AI/tech, would Amazon, for example, revert to the size it was in 2000? Would Tesla disappear? WalMart shrink to its 2000 footprint?

Point is, sure, the market will retract at some point, that's normal, but personally I don't think the immense growth over the past 25 years is all a mirage.

 

[69GTX]

Nicely symmetric 5 wave expanding wedges always give me some pause. The DIA wedge is a nearly perfect one.
They typically mark a fresh advance above the wedge OR a break down leading to the bottom of the wedge.
A multi-month wedge in the Dow into early 2020 perfectly determined the drop in the Dow to 18K.....as well as it's recovery.
That was a continuation expanding wedge. The larger Dow expanding wedge now in play is 22 months long.

 

[SC Maintenance]

I get what you are saying, but the economy is simply different and much, much larger than 25 years ago. Even the techies at that time would have no idea about AI, for example. Outside of AI/tech, would Amazon, for example, revert to the size it was in 2000? Would Tesla disappear? WalMart shrink to its 2000 footprint?

Point is, sure, the market will retract at some point, that's normal, but personally I don't think the immense growth over the past 25 years is all a mirage.

Your confusing the real economy with stock price.

The question is can Walmart continue to command a 40X multiple - which is higher than most of the mag 7?

The mag 7 valuations are more believable than a lot of other stocks actually. I did go ahead and sell some things and bought a little META and MSFT ahead of earnings.

 

[Mechanician]

Yes but how many here are young?

The 29 crash did not correct until 1954 - 25 years - to get to even.

I will point out your also biased by the last 25 years - which may be correct - I am just pointing it out.

How much of this current market is due to the emergence of 401K as the standard in retirement savings?
The number of people in the market isn't comparable to before 401k.

"The popularity of 401(k) plans surged, growing from 7.1 million participants in 1983 to nearly 39 million by 1993, and covering an estimated 80 million people by 2019."

 

[Vil_Riker]

How much of this current market is due to the emergence of 401K as the standard in retirement savings?
The number of people in the market isn't comparable to before 401k.

"The popularity of 401(k) plans surged, growing from 7.1 million participants in 1983 to nearly 39 million by 1993, and covering an estimated 80 million people by 2019."

Pre-401k the pension funds invested in the market as well.

 

[SC Maintenance]

How much of this current market is due to the emergence of 401K as the standard in retirement savings?
The number of people in the market isn't comparable to before 401k.

"The popularity of 401(k) plans surged, growing from 7.1 million participants in 1983 to nearly 39 million by 1993, and covering an estimated 80 million people by 2019."

Yes, why I said the market is about liquidity and flows, not blah blah narratives.

Passive bid - ie ETF's - is 53% at minimum by most estimates. Also foreign inputs - all coming into the S&P500 are at all time highs. And individual investors are at all time high net long. Meaning there are no short sellers left.

If people decide to pull money out at some point - foreigners, retirees deciding they don't need to gamble anymore, or a recession and we have fewer passive big buyers, and the market does start down - there will be no short sellers to cover - who are the historical buyers during a drawdown. ie it will be explosive on the way down.

Not predicting it, just saying when it ultimately happens the fireworks will be spectacular.

 

[Pablo]

I’m tail ass end of those evil money grubbing boomers.

People were predicting complete market swoon when the rich lazy bistrrds pulled out

Are we still waiting?

 

[Mechanician]

Yes greedy old farts do have to give it all up at some point.

The number of old folks hanging on (lingering) has to have some influence on this Bull as well.