Kriegsspiel wrote: ↑Thu May 07, 2020 12:16 pm
I sold stocks at or just before the top, then I put about 1/3 back in at the very bottom ($100 for my newsletter). So now I have some cash waiting, but I'm not that stressed at the valuations that stocks raced back up to. I'm ok with taking the "loss" for the optionality of the cash. If I'm looking at the long term, I'm down with having some assets "languish in cash," or "pay for optionality," until stocks make sense again.
Yep, it is nice to have that optionality. This was the position I was in Q4 2018. I got out early, and back in early, and started pulling some chips off the table and diversifying while everyone else was chasing back into the market. That was actually when I started my transition down the PP road, taking profits from that big run up following the Christmas Eve bottom and moving them into bonds and gold.
I tried for awhile to go straight up buy and hold, and I found out really quickly in April that even in a GB buy and hold on 100% of my portfolio is not for me. I settled on 40% PP as having a 40% conservative buy and rebalance allocation is a good anchor to allow me to chase alpha in my quant and active trading strategies (and all 3 give me added non-correlated strategy diversification benefits). The quant trend following strategy will help me do the same thing you did next time, get out early and back in at a decent enough entry to be ahead of the curve and not feel like I have to play catchup. And I'm pretty good at managing my risk in my active allocation, but definitely did not want to have more than 30% of my portfolio under active trading just because if I am trading with too large of a chunk of money, and I am in cash looking for trades I have a tendency to start getting impatient and trying to force trades to happen instead of waiting for the right trades to come to me. All 3 PP, trend, and active trading strategy allocations help create a total portfolio that I can 100% comply with and trust.
Last edited by pmward on Thu May 07, 2020 12:31 pm, edited 1 time in total.
Same here , I have about one third in permanent portfolio,which is a fair amount and 7 figures ..then 2/3’s are in the fidelity insight income model ...then we hold a lot of cash ......I find it is a good balance ...
mathjak107 wrote: ↑Thu May 07, 2020 12:30 pm
Same here , I have about one third in permanent portfolio,which is a fair amount and 7 figures ..then 2/3’s are in the fidelity insight income model ...then we hold a lot of cash ......I find it is a good balance ...
One thing I have thought to myself a lot lately when reading all the posts of people worrying about bonds and the PP, is that maybe if they had a VP as well it would help fix the issue? I think there was a reason why Harry encouraged people to have a VP for any cash beyond "the money they can't afford to lose". There are definitely psychological benefits to have some control and strategy diversification... but keeping the allocation that you can control limited and having a PP (or other highly diversified conservative portfolio) allocation as an anchor is also a really good thing. At the end of the day the most important thing is compliance. Investment strategies are like diets. You can have the best and most optimal strategy/diet in the world, but if you cannot comply with your strategy/diet, what good is it?
Kriegsspiel wrote: ↑Thu May 07, 2020 12:38 pm
I meant to say I sold some stocks. The way I wrote it might make it seem like I pulled off the Ocho, but I didn't
Oh, even I did that. (VP only)
No, I remember you used the term, sold "chunks of stocks" in a timely manner.
I don't really fuck with my investments too much. I just kinda nudge them now and then.
If you can't help yourself and you know you're going to be balls deep trading options on margin or whatever the fuck, maybe you just don't keep any cookies in the house (to mix my analogies).
Kriegsspiel wrote: ↑Thu May 07, 2020 12:38 pm
I meant to say I sold some stocks. The way I wrote it might make it seem like I pulled off the Ocho, but I didn't
Oh, even I did that. (VP only)
No, I remember you used the term, sold "chunks of stocks" in a timely manner.
pmward wrote: ↑Thu May 07, 2020 12:39 pm
Investment strategies are like diets.
Master dietologist, how do you see SPX recently ? Isn't the index forming a double top (of type Adam & Eve, according to Thomas Bulkowski ) after 21-22 April ?
PS. Sometimes, I see patterns around me, its highly obsessive have to admit hahaha.
pmward wrote: ↑Thu May 07, 2020 12:39 pm
Investment strategies are like diets.
Master dietologist, how do you see SPX recently ? Isn't the index forming a double top (of type Adam & Eve, according to Thomas Bulkowski ) after 21-22 April ?
PS. Sometimes, I see patterns around me, its highly obsessive have to admit hahaha.
Double top's do not exist until they set a lower low. As long as we are above SPY 279.13 we have not set a lower low, and we cannot say it is a double top. The market can still go back above and set that higher high. Two down days does not make a trend. A pattern is also not complete until it breaks up or down. And even if the 279.13 fails, we have the 50 day SMA not too far below at 271.25. It is not uncommon early bull market behavior to go and retest the 50 day SMA prior to going to try to break above the 200 day SMA. Keep an open mind, always look at both sides of the tape. Be careful of looking at the charts with a mind that is biased to one side or the other. For the moment we still have a pattern of higher highs and higher lows in tact. Until that is broken with a lower low the daily trend is still bullish.
pmward wrote: ↑Thu May 07, 2020 12:39 pm
Investment strategies are like diets.
Master dietologist, how do you see SPX recently ? Isn't the index forming a double top (of type Adam & Eve, according to Thomas Bulkowski ) after 21-22 April ?
PS. Sometimes, I see patterns around me, its highly obsessive have to admit hahaha.
Double top's do not exist until they set a lower low. As long as we are above SPY 279.13 we have not set a lower low, and we cannot say it is a double top. The market can still go back above and set that higher high. Two down days does not make a trend. A pattern is also not complete until it breaks up or down. And even if the 279.13 fails, we have the 50 day SMA not too far below at 271.25. It is not uncommon early bull market behavior to go and retest the 50 day SMA prior to going to try to break above the 200 day SMA. Keep an open mind, always look at both sides of the tape. Be careful of looking at the charts with a mind that is biased to one side or the other. For the moment we still have a pattern of higher highs and higher lows in tact. Until that is broken with a lower low the daily trend is still bullish.
And the bulls stepped up below that $279.13 just like they should have. They tested it at around 3:15ET and then the bulls launched the price back up over $181 within minutes of the test. So while the SPY price was down today, the bears fumbled and failed to get the ball into the end zone. As long as we are above that $279.13 and the bulls are aggressively defending support like that, it is really hard to make a bearish case.
Funny, I was glued to SPY during that time as well and noticed a couple attempts to breach and hold below that 279 number. Low was 278.96, Close 281.60.
Been watching GDX for a good entry again after 35.20 sale.
buddtholomew wrote: ↑Wed May 13, 2020 8:01 pm
Funny, I was glued to SPY during that time as well and noticed a couple attempts to breach and hold below that 279 number. Low was 278.96, Close 281.60.
Been watching GDX for a good entry again after 35.20 sale.
Yep, important support levels like $279.13 rarely give way easily. The best chance the bears have to get and hold below there is to try to gap below it tomorrow morning. We will have to wait and see what happens. If they starts closing some candles below $279.13 then the bears are actually scoring some points and doing some real technical damage, something they have been completely unable to do since March 23.
pmward wrote: ↑Wed May 13, 2020 9:26 am
Double top's do not exist until they set a lower low.
Yup, I am bit too quick and a bit of looking ahead (which obviously is my mind drawing dragons in the air), indeed crossing of the confirmation line is pending... Have struggled with some reversion trades in the past due to that (entering too early), promise I will not do that in the future
We had a nice -2.xx% gap in EU, has gained a bit since then but still it smells a negative day. Let's see, though its nice to see again the pros going against the prevailing trend shortly after market opening and betting against ..
pmward wrote: ↑Wed May 13, 2020 8:48 pm
Yep, important support levels like $279.13 rarely give way easily.
Its 278.34 now, listening to L'Inverno / Le quattro stagioni (Vivaldi) - that makes the moment even more dramatic ahahah
Yep the bears not surprisingly did the gap thing I mentioned last night. They even got an hourly close below $279.13 which really does weaken that level a bit. But so far the bulls have pulled us back above now, and are going back for that next important $181 level. Watch how it handles that $181. Usually the market does one of two things in this scenario. It either goes up close to $181 and then just hangs around doing nothing, this is a bull flag which basically is building energy to break back above $181 which would put the ball back in the bulls court and set the stage for a late afternoon rescue rally. Or it goes up to $181 and quickly turns back around and goes back down, which keeps the ball in the bears hand and sets up yet another test of that now weakened $279.13 level into the close. The hourly chart is very important right here.
The ability of the stock market to shake off bad news is truly incredible. Pandemic, 20 percent unemployment, Chinese trade wars, race riots...nothing can seem to keep it down.
doodle wrote: ↑Sun May 31, 2020 11:41 pm
The ability of the stock market to shake off bad news is truly incredible. Pandemic, 20 percent unemployment, Chinese trade wars, race riots...nothing can seem to keep it down.
Yes, isn't it amazing what unlimited money printing can do for the stock market?
doodle wrote: ↑Sun May 31, 2020 11:41 pm
The ability of the stock market to shake off bad news is truly incredible. Pandemic, 20 percent unemployment, Chinese trade wars, race riots...nothing can seem to keep it down.
Bad news = liquidity. Liquidity = stock market going up. Stock market going up = good news. Therefore, bad news = good news.
Liquidity could flow into any asset. This doesn't make any sense to me. Practically back at pre corona virus levels but world looks completely different.
doodle wrote: ↑Wed Jun 03, 2020 8:23 am
Liquidity could flow into any asset. This doesn't make any sense to me. Practically back at pre corona virus levels but world looks completely different.
You need to accept the fact that the economy and fundamentals do not move the stock market. I've been saying this on this board for 2 years now (and been proven right time and again) and still nobody gets it. If the economy and fundamentals moved markets, the market would be way down right now. The day you can accept this fact is the day you finally will be free to start to understand what really does move markets, and that will be the day that you will start being on the right side of the trades instead of always on the wrong side.
If it's emotion that moves markets then I guess the concept of trading is almost entirely a crapshoot...unless there is some other mysterious predictable force at work.
I guess the better question is...where is all the optimism coming from? I see no bright light on the horizon.
doodle wrote: ↑Wed Jun 03, 2020 12:06 pm
If it's emotion that moves markets then I guess the concept of trading is almost entirely a crapshoot...unless there is some other mysterious predictable force at work
Emotions show up on a chart. It's not a crapshoot. If people are greedy today, odds are they are going to be greedy tomorrow. If people are fearful today, odds are they will be fearful tomorrow. Nobody can every make a 100% bet, but you can find bets that are higher probability than others, and if you manage your risk properly and don't do anything dumb you can profit greatly on the whole.
Or you can just hold something like a PP and stop speculating on what could/should happen, and just let the market do whatever it's going to do.
(VP only)
