Post: #151

Paying attention to broader market trends can be important to people who aren't day traders either. Broad market trends over a long time horizon (yearly charts) can signal economic recession beforehand when the market does turn longer term bear.

This has been particularly useful for business purposes. The overall economy does have some impact on what I do. I get a good idea when to start shifting money and how to allocate.

Post: #152

Trading stocks (or bonds) is gambling with the odds stacked against you. I always assume the person I'm volleying with on the other side of the trade is one of the Williams sisters.

Buying and holding a simple, cheap, diversified portfolio of ONE intermediate term bond fund / ETF (corporate grade US$ currency) and ONE FTSE all world all cap indexed equity fund / ETF is what I recommend.

Post: #153

(03-12-2016 05:54 PM)temsike Wrote:  Trading stocks (or bonds) is gambling with the odds stacked against you. I always assume the person I'm volleying with on the other side of the trade is one of the Williams sisters.

Buying and holding a simple, cheap, diversified portfolio of ONE intermediate term bond fund / ETF (corporate grade US$ currency) and ONE FTSE all world all cap indexed equity fund / ETF is what I recommend.

I have to chime in here with respect to the above: if that's how you make money brother, more power to you.

I will add however, that big money is not neccessarily smart money. And possibly more importantly, big money has liquidity constraints. You do not need to beat the Williams sisters at tennis, much as they are likely worse than you at your sport of choice.

Post: #154

I successfully traded (small cap) stocks for 11 years (1994-2005) beating the SP500 by 6% per year. Very volatile. Extremely stressful. LOTS of time following and worrying.

Since 2006 we use a 2-ETF portfolio = 60% VT (world stocks) + 40% BND (intermediate term investment grade bonds). I spend a maximum of 5 min PER YEAR on our investments. When either is out of wack by 5% or more we rebalance back to 60/40 to maintain our risk tolerance level.

(03-12-2016 06:49 PM)jj90 Wrote:  

(03-12-2016 05:54 PM)temsike Wrote:  Trading stocks (or bonds) is gambling with the odds stacked against you. I always assume the person I'm volleying with on the other side of the trade is one of the Williams sisters.

Buying and holding a simple, cheap, diversified portfolio of ONE intermediate term bond fund / ETF (corporate grade US$ currency) and ONE FTSE all world all cap indexed equity fund / ETF is what I recommend.

I have to chime in here with respect to the above: if that's how you make money brother, more power to you.

I will add however, that big money is not neccessarily smart money. And possibly more importantly, big money has liquidity constraints. You do not need to beat the Williams sisters at tennis, much as they are likely worse than you at your sport of choice.

Post: #155

(03-07-2016 12:04 PM)WeekendCasanova Wrote:  

(03-06-2016 10:19 PM)robreke Wrote:  

(03-04-2016 09:55 PM)El Chinito loco Wrote:  Robreke your market analysis is pretty good and what are your thoughts about this breaking down into a prolonged bear?

I can't say. Frankly, I don't care what my gut says. I watch what the market tells me and make decisions based on that. At this point, it looks like a bottoming process that will either end up being a bear market rally or nearing/at the end of this correction and we're still in the midst of a long term bull that started in 2009.

There will be a bear at some point. Whether this is it or not, remains to be seen.

Are you day trader? Not sure if I missed you commenting on what you do.

Unless you're a day trader, basing your trades off what the 'market says' is not the best idea. It's better to look at the underlying fundamental data of a company - the performance returns are far greater in the long-run, and the risk is lower. But again, if you are a day trader - you won't be able to live off trading(investing) this way.

Also, in regards to someone else who mentioned it, DCA is fine, but it has some cons; high risk (doesn't deal with volatility well), higher transaction costs, and it doesn't guarantee a higher return than lump sum investing.

Obviously, if you don't have a big amount to deal with, DCA may be ok - but people think they can just use DCA and never have to touch their portfolio - which is not the right thing to do. We've also found that most of the time(not all of the time), LSI > DCA in terms of return. Also, if you're a poor saver, DCA is good. Helps you get into the habit of saving.

Some good stuff in this thread, keep at it!

I disagree with that bolded part. Fundamentals mean jack when the market is in a bear. I guess you could say, however, that some stocks fundamentals will change before the bear market because that's what's causing them to be down.

If the market direction/bias is down because of a correction or bear market, something like 95% of all stocks are going to go down too. Those are bad odds. So, if one can determine if the market is in an uptrend or in a downtrend, one will be in an environment that is conducive to and much friendlier for, stocks to rise (or fall). Why not be long on stocks only during the most beneficial environment possible ( bull markets/rallies ) when owning stocks?

Owning a stock with good fundamentals is obviously good in bull markets. But why blindly hold those "top" stocks when a major correction or bear market is happening?

No stock can really resist a major correction or bear. They will fall, sometime significantly. You'll just end up watching weeks, months or years of gains evaporate. I suppose many will be thinking to themselves "well, I'll just hold it through this bear market because it will eventually be a bull market again"

While this is true, many of those stocks will take a very long time, sometimes years and years, to get back where they were near the peak of the last bull market. Wasted time and dead money.

Do you know how much capital ( read preservation of my account value) I saved by cashing out in mid December last year when I accurately identified the rally's last top? A lot.

Albeit, I've started to tippy toe back in since market conditions have started to improve the past couple weeks.

Better to know how to determine the direction of the market and own stocks only when you've got the tail winds to push your ship upstream. No use fighting headwinds and being long stocks during bad markets.

I don't consider myself a 'day trader' by the way. I'd say more of a momentum trader, which is, of course the methodology explained above. That is, own top notch stocks, bought while coming out of top notch technical patterns, in an identified up trending market.

Post: #156

Im starting to agree w/Robreke more and more.

I really do think prices are liquidity driven.

Low liquidity = lower prices.

Its kind of like turbulence, you'll hit a bad pocket and poof things get rocky and start shaking. Fear sets in.

My portfolio is actually up since December (my energy plays got crushed. oh well, cant win them all). I've held through it all, but I am looking at a 20 yr runway for investments.

Going forward, Id like to only buy during times of high uncertainty and poor liquidity. I would then be able to regularly get 10% discounts on prices which can juice returns.

So my mental roadmap is to dollar-cost average but only when things are turbulent.

Post: #157

Planet Money released an interesting podcast the other day, looking into a bet Warren Buffett made with a money manager in which he claimed an index fund (in this case, the S&P 500) would out-perform almost any hedge fund over ten years. While the bet won't end until 2018, the index fund will almost certainly win.

http://www.npr.org/sections/money/2016/0...-vs-boring

Thoughts?

Post: #158

This year got into 2 simple trades (via CFD) - ISF LN (Bloomberg ticker for FTSE 100 iShares UCITS index tracker)

5th Jan 16 long 500 shs @ 612.2
9th Feb 16 long 500 shs @561.4

Gazprom OAO GDR (Bloomberg ticker - OGZD LI)

11th Feb 16 long 10,000 shs @ 327.2

Closed

7th March 16 OGZD LI 10,000 shs @ 409.6

14th March 16 ISF LN 1,000 shs @ 599.2 (ave px on combined position was 586.8)

YTD return - 27.2%

Post: #159

Right know Im keeping my money with fidelity us index fund but I have a strong feeling I should move onto an index fund base on European stocks thanks to the quantitative easing. Any thought on that?

Post: #160

(03-14-2016 05:50 AM)Space Cowboy Wrote:  Planet Money released an interesting podcast the other day, looking into a bet Warren Buffett made with a money manager in which he claimed an index fund (in this case, the S&P 500) would out-perform almost any hedge fund over ten years. While the bet won't end until 2018, the index fund will almost certainly win.

http://www.npr.org/sections/money/2016/0...-vs-boring

Thoughts?

This shouldn't be surprising. As I've been saying, fundamental investing destroys technical analysis, and it's not even close. But people still clamor "market trends" because it sounds sexier.

The index fund is boring, and in the short-term, hedge funds will outperform an index fund, but long-term returns it won't be close. I'd place money on that bet if I could.

Post: #161

@WeekendCas - This is where the marketing / sales machine of the mutual / hedge / active fund mgmt industry comes into play. Their advertising and marketing budgets are monstrous. To be honest lots of fund are claiming to be actively managed when in reality they are shadowing indexes while claiming a significant AMC and % of any profits. Clever gig if you can get it.

Post: #162

(03-14-2016 04:21 PM)WeekendCasanova Wrote:  This shouldn't be surprising. As I've been saying, fundamental investing destroys technical analysis, and it's not even close. But people still clamor "market trends" because it sounds sexier.

The index fund is boring, and in the short-term, hedge funds will outperform an index fund, but long-term returns it won't be close. I'd place money on that bet if I could.

I'd put money on that bet too, only if it was a broad HF index, I wouldn't bet against Renaissance though.

My issue is not that you think FA > TA, or whatever. But that how is one to define fundamentals vs technicals vs statisticals vs voodoo magic?

Is reading financial statements to determine a defensible moat and intangibles worth billions the key to riches? Or is it taking the next step and extrapolating current economic trends to a business model? Or perhaps in addition its about seeing how global liquidity concerns, pension mandates, and ZIRP add or detract to portfolios of assets?

As you may well know, Buffett ran a hedge fund back in his LP days too. It would be better for others following this thread to explain what value FA has over TA/stat arb/monkey shit in your opinion. Otherwise, this may devolve into a pissing match.

Post: #163

@ Weekend Casanova- A lot of prices and price support has to do with liquidity, central bank interest rates (dividend arbitrage/bond arbitrage), and general economic sentiment.

I think do your research on fundamental analysis and pull the trigger based on TA. Layer into positions- 1-2% at a time.

It really only makes sense when you have 100k+.

For those w/10k, its better to choose 3-4 individual stocks or vanguard dollar cost average away.

Post: #164

Weekly Market Update #8
Running into overhead ‘supply’ at 200 DMA on DOW and S&P.

Sentiment is changing and my signal is on the verge of an outright buy. Positions are beginning to be initiated up to about 40% exposure ( owning 40% individual stocks, 60% cash)

Many stocks have made the turn and are now forming a low handle. If you can spot stocks with these 'tight' handles, the high of the handle is often the buy point if you're a breakout buyer.

Some stocks breaking out and holding their gains. The market made its 2016 high today.

We are overbought on the RSI indicator. The good sign is we’re staying overbought. Often traders will see an RSI overbought signal and immediately assume they should sell and let things settle. However, in a true new rally or sustained advance or, dare I say, resumption of the bull market if that is indeed what this is, an overbought signal that stays overbought for an extended time is a very positive sign and indicative of a truly healthy rally that has legs.

As far as overhead supply and the S&P 500 recently piercing its 200 Day moving average, sometimes it gets very obvious running into overhead supply, especially coming off the lows. So, traders may think 'here we go about to hit the 200 DMA, I need to dump shares' It's not always the case as it's almost too obvious. The market powers through and will only rest or correct a bit once it's higher above the 200 DMA than anyone thought it would be.

The nasdaq is just now bumping into it's 200 DMA, lagging the S&P so perhaps it's here where we'll take a breather.

At some point we’re probably going to have to move sideways and come in a bit, forming a bit of a sideways wiggle where this market consolidates its gains.

In summary:

Sentiment shift is happening, going for a selling/declining market to an advancing one.
If starting to buy stock positions, consider not going fully in, until this rally fully "proves" itself. Eg: maintaining only about 25 to 40 exposure.
Keep stops in place
Focus on watching stocks- leading stocks. Are they breaking out and continuing their advance and holding their breakouts? Or are they failing?

The best thing we could see is the market consolidate its gains for a few weeks. I see alot of cups forming, but now they need to form handles. That is, a bit of sideways action and "rest"

Another note - Leading stocks often will march to their own drummer. That is the market will be taking a rest, perhaps drifting sideways or even down a bit and the leaders are powering up. Then, the market finally recovers and those same leaders often will then catch their breath a bit, before resuming their advance. Higher alpha names, which is what leading stocks are considered, will sometimes ignore when the market takes a rest, doing their own thing and going higher.

Post: #165

What do you think the reason is behind treasury yields not continuing to go up to match the rallying market despite no fed changes?

The yields have definitely dropped since last week even though the market has rallied. Bond prices remain very high.

It's kind of unusual that the S&P 500 has gap filled that Jan correction but yields are so low.

Post: #166

^ You did catch the news where Fed projections are now calling for 2 rate hikes this year down from 4 last December?

Post: #167

(03-18-2016 01:33 AM)jj90 Wrote:  ^ You did catch the news where Fed projections are now calling for 2 rate hikes this year down from 4 last December?

That's a bearish economic projection by the fed which has some impact but
the market tends to price in minor fed announcements (especially non action) and if they're significant enough they move all markets not just bond prices.

There's just an unusual divergence there with falling treasury yields and a steep nearly vertical stock rally..

Post: #168

(03-17-2016 09:29 PM)robreke Wrote:  In summary:

Keep stops in place

Did you hear about this Robreke?
http://www.marketwatch.com/story/nyse-jo...2015-11-18

Quote:A type of order traders use to protect against losses is being phased out, as stock exchanges seek to deal with the ramifications of huge intraday swings.

The New York Stock Exchange, in a statement, said it would no longer accept what are called stop orders, beginning Feb. 26, joining the Nasdaq NDAQ, -1.14% in barring them. Another order type called good-till-canceled also is being axed.

Post: #169

(03-18-2016 06:31 AM)The Beast1 Wrote:  

(03-17-2016 09:29 PM)robreke Wrote:  In summary:

Keep stops in place

Did you hear about this Robreke?
http://www.marketwatch.com/story/nyse-jo...2015-11-18

Quote:A type of order traders use to protect against losses is being phased out, as stock exchanges seek to deal with the ramifications of huge intraday swings.

The New York Stock Exchange, in a statement, said it would no longer accept what are called stop orders, beginning Feb. 26, joining the Nasdaq NDAQ, -1.14% in barring them. Another order type called good-till-canceled also is being axed.

It's true about NYSE and nasdaq, but it's not really an issue.

You can still do stop loss orders with no problem however.

Most brokers will just route the orders to other market makers who do provide stop losses. There's many other market makers besides NYSE and NASDAQ who still allow stop orders.

Post: #170

I think AMD and NVDA are both solid right now. NVDA is just safe and AMD has a good chance of doubling or tripling by end of this year.

PS4.5 coming out
PS move/camera sales up 1000% on amazon
Polaris GPU running passively 4k VR
AMD/Intel in talks of deal
AMD's chips in pretty much every gaming console
Two of their best employees who left for Apple have recently come back, one is focusing on VR
(All of this is riding on VR which I think will be huge as the headsets preorders are flooded and honestly the games look sick like the Everest simulation for Vive)

AMD's future looks way brighter than $2.93/share. I went in at 2.77 and 2.9

Post: #171

Newbie question

What do you guys think of the possible merger of Hasbro corp. and Mattel corp?

Hasbro 78.49 down 0.12 %
Mattel 32.75 down 0.09 %

Good time to invest in Hasbro corp?

Post: #172

Schlep, I'll let the more experienced guys comment on this specific merger, but as a newbie I would not trade individual stocks on news stories. As soon as a news story comes out, trading algorithms analyze the text and act on it even before people can read it and decide what to do. Then it becomes priced in, reflected in the stock price.

Post: #173

(03-20-2016 04:47 PM)Schlep Wrote:  Newbie question

What do you guys think of the possible merger of Hasbro corp. and Mattel corp?

Hasbro 78.49 down 0.12 %
Mattel 32.75 down 0.09 %

Good time to invest in Hasbro corp?

I had a quick look at the option market for both stocks. There doesnt seem to be any large call purchases this year. In fact Mattel has a lot of open interest in the April puts.

Generally speaking when there is a big merger coming, insiders dive into the option market. Not seeing it here on either of these stocks

If i was a betting man, i dont see a merger happening as of yet. Doesnt mean it cant or wont but it doesnt have the tell tale signs yet

Post: #174

^^ thanks for the replies guys.

I have gone through all seven pages of this thread and find it rather confusing for a newbie. But, have to start somewhere right?

Post: #175

http://www.theglobeandmail.com/report-on...e29305371/

TL;DR: My exit price was ~half the buyout price, my entry price ~half the exit price. FML.

@Schlep: Unless you have insider info or have tells in another market as BIGINJAPAN alluded to, you can lose money even if your thesis is correct. What usually happens in a cash transaction is the acquiring company's stock price drops and the acquired company's price rises. This is because the company making the purchase bids higher then current mkt value in order to get the deal done. Obviously, there is a cost to the purchase and that's why the acquiring company's stock drops. So if Hasbro merges with Mattel but Hasbro buys Mattel, instead of the other way around, your thesis is absolutely right, and yet you lost money. I won't get into stock/cash or all stock deals. That's not so clear cut.