ochotona wrote:I think in the short term long bonds are over-extended. On a Keltner Channel chart, they are tagging the 3 standard deviation line to the upside on a daily chart. I expect TLO or TLT to come down by 4%. Intermediate to long term, who knows?
This is why I completely gave up on market timing.
Risk/reward is too low.
The risk/reward is huge. But what you are talking about is really just tinkering.
Expecting something to move 4% is sort of comical in itself. That's awfully precise. And then making a portfolio adjustment based on that expected paltry move to potentially save 0.8%? With LTTs at all time highs, it strikes me it wouldn't even be worth the tax implications.
Successful market timers get rich or broke placing much bigger bets on much bigger ideas.
buddtholomew wrote:
4% loss = 8K USD saved if you're correct.
8K on a 1M TLT investment= 0.8%
Hardly seems worthwhile at all.
This is why I completely gave up on market timing.
Risk/reward is too low.
Fading the trend risky. Going with trend not. It's at extreme points that you have to be careful so that you don't go all in at a top or sell all out at a bottom. It's at the in-between where trends change as opposed to at extreme points of mean reversion. But all potential trend changes start out as an extreme point mean reversion, but you don't know if it a forebearer of a trend change ahead of time unless you look at other variables besides just price and which have a historical record of actually working. Don't do this on gut feel.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
No matter how often I trim long-term treasuries, they continue to rise in value. Powerful little bugger...
These markets are truly remarkable to me. Just when you believe things are coming to a head, the balloon slowly deflates and the baseline is reset "new normal". As long as you own something this year you are experiencing the wealth effect with a rise in stocks, bonds and gold.
I didn't notice this until last month when I was backtesting some PP variants But PP usually has an extremely good year following a bad year. It appears this year may continue that trend.
