The stock market thread.

[Thucydides]

It’s not a .RF just “PEANRF”. Been halted for a couple of years now just noticed this morning it changed . Weird . I looked up a list of exchanges and didn’t see one with the RF.

this is why you don’t invest in penny stocks. Lol

 

[BahlDeep]

Sit on the sideslines and wait for everyone else to lose their shirts and pick up the pieces in a few months.

This is an absolute terrible strategy.

 

[Fixed to Ruin]

This is an absolute terrible strategy.

I don't think so.

 

[member 157595]

If you're taking a long-term view, it would be unwise not to be bullish. Betting against the power of the US economy has always proven to be a poor long-term position. It's highly unlikely that this will change in our lifetimes.

I don't know what the stock market will do next week, next month, or next year. Even five years out, I can't say with certainty it will be higher than it is today (it's highly probable, but not certain). The reality is nobody else in this thread knows. (If they did, they wouldn't be giving away their insights for free on a hockey message board). But over long time frames - twenty or more years - the Dow Jones has never decreased in value.

There's a ton of academic research showing that short-term speculators can't beat the market with any consistency. Aside from the fact that people simply have no idea how to predict short-term movements ("charting", which I've seen references to throughout this thread, has as strong a foundation as alchemy and phrenology) - most short-term traders are faced with transaction fees and taxes that far exceed what a disciplined long-term investor would incur.

Buying and holding is a guaranteed way to get rich slowly. The key word is "slowly". It takes patience and discipline, but if your horizon is twenty or thirty years, it's your best option. Most of my money is in diversified ETF's with minuscule management fees. When I buy stocks of a specific company, it needs to demonstrate several characteristics - a wide economic moat, a history of maintaining/increasing dividend payouts, and a conservative dividend payout ratio. Now is probably a good time to buy since everything is much cheaper than it was a month ago.

I've been investing in the market long enough to know that every time there's a correction, the "this time is different" crowd shows up. There were people who said in 2008 that "this time is different" - that the stock market was shown be a sham, the economy's foundation was faulty, and it would taken decades to recover. It took about six years (before taking into account dividends). People said the same thing in 2001. And in 1987. Unless you think Western civilization will collapse (in which case, money would no longer have any value anyway), this correction will pass - just like all the others before it.

Obviously, this advice isn't for people who need the cash soon. If you're saving for tuition, or saving for a down-payment in a few years, stocks probably aren't your best option. You'd need to protect your capital. But if you were to invest in stocks, buying stable, boring, dividend-paying stocks would be a much better strategy than speculating on put options, in some kind of perverse bet against the same economic system that provides you with your high standard of living.

Most of the advice in this thread is objectively awful. If anybody who's just started their career is reading this, take 10% of your paycheque and invest it in a low-cost, diversified ETF (iShares has many good options - and lest I be accused of having a conflict of interest, I don't own any iShares products). Instead of gambling away your money on trying to do the impossible (guess short-term price swings), you'll be buying a small piece of ownership in active businesses. This advice is boring but, if you stick with it, you're virtually certain to get rich - slowly.

I think I love you.

 

[Ainec]

I'd much rather lose $ trusting myself and only having myself to blame

 

[Ted Hoffman]

If you're taking a long-term view, it would be unwise not to be bullish. Betting against the power of the US economy has always proven to be a poor long-term position. It's highly unlikely that this will change in our lifetimes.

I don't know what the stock market will do next week, next month, or next year. Even five years out, I can't say with certainty it will be higher than it is today (it's highly probable, but not certain). The reality is nobody else in this thread knows. (If they did, they wouldn't be giving away their insights for free on a hockey message board). But over long time frames - twenty or more years - the Dow Jones has never decreased in value.

There's a ton of academic research showing that short-term speculators can't beat the market with any consistency. Aside from the fact that people simply have no idea how to predict short-term movements ("charting", which I've seen references to throughout this thread, has as strong a foundation as alchemy and phrenology) - most short-term traders are faced with transaction fees and taxes that far exceed what a disciplined long-term investor would incur.

Buying and holding is a guaranteed way to get rich slowly. The key word is "slowly". It takes patience and discipline, but if your horizon is twenty or thirty years, it's your best option. Most of my money is in diversified ETF's with minuscule management fees. When I buy stocks of a specific company, it needs to demonstrate several characteristics - a wide economic moat, a history of maintaining/increasing dividend payouts, and a conservative dividend payout ratio. Now is probably a good time to buy since everything is much cheaper than it was a month ago.

I've been investing in the market long enough to know that every time there's a correction, the "this time is different" crowd shows up. There were people who said in 2008 that "this time is different" - that the stock market was shown be a sham, the economy's foundation was faulty, and it would taken decades to recover. It took about six years (before taking into account dividends). People said the same thing in 2001. And in 1987. Unless you think Western civilization will collapse (in which case, money would no longer have any value anyway), this correction will pass - just like all the others before it.

Obviously, this advice isn't for people who need the cash soon. If you're saving for tuition, or saving for a down-payment in a few years, stocks probably aren't your best option. You'd need to protect your capital. But if you were to invest in stocks, buying stable, boring, dividend-paying stocks would be a much better strategy than speculating on put options, in some kind of perverse bet against the same economic system that provides you with your high standard of living.

Most of the advice in this thread is objectively awful. If anybody who's just started their career is reading this, take 10% of your paycheque and invest it in a low-cost, diversified ETF (iShares has many good options - and lest I be accused of having a conflict of interest, I don't own any iShares products). Instead of gambling away your money on trying to do the impossible (guess short-term price swings), you'll be buying a small piece of ownership in active businesses. This advice is boring but, if you stick with it, you're virtually certain to get rich - slowly.

Jesus, you could have just said "there is never a bad time to buy, there is never a good time to sell."

Does buy/hold "guarantee" to get you rich slowly? Well, that all depends on where you're buying in, but let's skip that and just say "yes." That still leaves you riding every climb/drop. Great on the climbs, painful on the drops. The buy-and-hold crowd looked great in 2007; at the end of 2008, a shitload of return had been wiped out. Ask people who were planning on retiring in 2009 or 2010 how great buy-and-hold was for them. By the time markets bottomed in 2009, you were in the same exact spot you would have been having just sat in Treasuries from May, 1995 to then. That is what "buy-and-hold" got you: two market peaks and ensuing declines, all the volatility of the 2008 meltdown, and nothing extra to compensate for all of it.

I've been investing in the market long enough to know that every time the market screamed to new highs at ultra-rich valuations, the "this time is different" crowd was out in force. We're at permanently new highs, recessions are a thing of the past, buy the dip, this is temporary, this won't spread to the broader market, ... heard 'em all. Watched them all get disproven, often in crushing terms. Watched people go from crowing about 15% annual returns to freaking out about being flat or worse. Hell, look at the most recent this is a generational opportunity to buy screams. Yeah, it's a generational buying opportunity you last had ... 14 months ago. You know, when no one was saying it was still a generational buying opportunity; it was just the stock market is going up forever, valuations are fine, all is fine.

Is "just start plowing into the market now, ~25% off all-time highs" the worst idea in the world? No, I can think of worse. That still doesn't make it a smart move, though. Should everyone be gambling on short-term moves? Hell no; even my comments are couched with "this is in a play account, if it all disappears no big deal." But I sure as hell wouldn't move my IRA and 401(k) back into the market all-in like everything is fine, March was an aberration and everything is going to back to going up forever.

There are times to buy. Right now is not one of the smarter ones to do it, unless one is totally comfortable with the possibility of watching at least 30% (and more likely 50%) of it disappear before things finally hit bottom. If someone is OK with that, go for it.

 

[Fixed to Ruin]

Jesus, you could have just said "there is never a bad time to buy, there is never a good time to sell."

Does buy/hold "guarantee" to get you rich slowly? Well, that all depends on where you're buying in, but let's skip that and just say "yes." That still leaves you riding every climb/drop. Great on the climbs, painful on the drops. The buy-and-hold crowd looked great in 2007; at the end of 2008, a shitload of return had been wiped out. Ask people who were planning on retiring in 2009 or 2010 how great buy-and-hold was for them. By the time markets bottomed in 2009, you were in the same exact spot you would have been having just sat in Treasuries from May, 1995 to then. That is what "buy-and-hold" got you: two market peaks and ensuing declines, all the volatility of the 2008 meltdown, and nothing extra to compensate for all of it.

I've been investing in the market long enough to know that every time the market screamed to new highs at ultra-rich valuations, the "this time is different" crowd was out in force. We're at permanently new highs, recessions are a thing of the past, buy the dip, this is temporary, this won't spread to the broader market, ... heard 'em all. Watched them all get disproven, often in crushing terms. Watched people go from crowing about 15% annual returns to freaking out about being flat or worse. Hell, look at the most recent this is a generational opportunity to buy screams. Yeah, it's a generational buying opportunity you last had ... 14 months ago. You know, when no one was saying it was still a generational buying opportunity; it was just the stock market is going up forever, valuations are fine, all is fine.

Is "just start plowing into the market now, ~25% off all-time highs" the worst idea in the world? No, I can think of worse. That still doesn't make it a smart move, though. Should everyone be gambling on short-term moves? Hell no; even my comments are couched with "this is in a play account, if it all disappears no big deal." But I sure as hell wouldn't move my IRA and 401(k) back into the market all-in like everything is fine, March was an aberration and everything is going to back to going up forever.

There are times to buy. Right now is not one of the smarter ones to do it, unless one is totally comfortable with the possibility of watching at least 30% (and more likely 50%) of it disappear before things finally hit bottom. If someone is OK with that, go for it.

We have two stock market threads on a hockey prospects board. I can't think of a more obvious denial/bull trap signal than that.

 

[BahlDeep]

Jesus, you could have just said "there is never a bad time to buy, there is never a good time to sell."

Does buy/hold "guarantee" to get you rich slowly? Well, that all depends on where you're buying in, but let's skip that and just say "yes." That still leaves you riding every climb/drop. Great on the climbs, painful on the drops. The buy-and-hold crowd looked great in 2007; at the end of 2008, a shitload of return had been wiped out. Ask people who were planning on retiring in 2009 or 2010 how great buy-and-hold was for them. By the time markets bottomed in 2009, you were in the same exact spot you would have been having just sat in Treasuries from May, 1995 to then. That is what "buy-and-hold" got you: two market peaks and ensuing declines, all the volatility of the 2008 meltdown, and nothing extra to compensate for all of it.

I've been investing in the market long enough to know that every time the market screamed to new highs at ultra-rich valuations, the "this time is different" crowd was out in force. We're at permanently new highs, recessions are a thing of the past, buy the dip, this is temporary, this won't spread to the broader market, ... heard 'em all. Watched them all get disproven, often in crushing terms. Watched people go from crowing about 15% annual returns to freaking out about being flat or worse. Hell, look at the most recent this is a generational opportunity to buy screams. Yeah, it's a generational buying opportunity you last had ... 14 months ago. You know, when no one was saying it was still a generational buying opportunity; it was just the stock market is going up forever, valuations are fine, all is fine.

Is "just start plowing into the market now, ~25% off all-time highs" the worst idea in the world? No, I can think of worse. That still doesn't make it a smart move, though. Should everyone be gambling on short-term moves? Hell no; even my comments are couched with "this is in a play account, if it all disappears no big deal." But I sure as hell wouldn't move my IRA and 401(k) back into the market all-in like everything is fine, March was an aberration and everything is going to back to going up forever.

There are times to buy. Right now is not one of the smarter ones to do it, unless one is totally comfortable with the possibility of watching at least 30% (and more likely 50%) of it disappear before things finally hit bottom. If someone is OK with that, go for it.

What is absolutely ridiculous is that you assume that someone who is 2 years out of retirement would have 100% of his portofolio in stocks with no regards to portfolio diversification through asset classes.

As mentioned, if you have a long term horizon like 10 years+, you would be an absolute idiot to not put money to work right now. Prove me wrong, you won't and you can't.

And on the second bold...you don't know that. You talk like this is a guarantee...which is absolutely not. You don't try to time the market because you will end up on the losing end of things a majority of the time. Even if you are half right, you are still in better position then if you are completely wrong.

Anyone in this thread wants to follow his advice, you're shooting yourself in the foot.

 

[The Real JT]

What is absolutely ridiculous is that you assume that someone who is 2 years out of retirement would have 100% of his portofolio in stocks with no regards to portfolio diversification through asset classes.

As mentioned, if you have a long term horizon like 10 years+, you would be an absolute idiot to not put money to work right now. Prove me wrong, you won't and you can't.

And on the second bold...you don't know that. You talk like this is a guarantee...which is absolutely not. You don't try to time the market because you will end up on the losing end of things a majority of the time. Even if you are half right, you are still in better position then if you are completely wrong.

Anyone in this thread wants to follow his advice, you're shooting yourself in the foot.

Disagree strongly regarding the bolded type.

Feel free to hold here in the current trading range but short term upside over 2600 in the SPY is very unlikely. Why invest now when you can very likely get in at similar valuations in the next 1-2 months?

Meanwhile, downside to the 1900-2100 range is a decent possibility.

A proven treatment for COVID is the only thing that might spur a strong upside move but I wouldn't bet on hydroxychloroquine. Remdesivir and other trials are also ongoing.

Nothing of significance regarding drug trials will be reported for at least a month.

In the meantime, all kinds of unknown bad news can surface and the economy is at a standstill with bankruptcies galore to come.

Cash is the place to be.

 

[PositiveCashFlow]

What's funny is TV allows me to do TA on COVID-19 infection and death rates

 

[Ted Hoffman]

What is absolutely ridiculous is that you assume that someone who is 2 years out of retirement would have 100% of his portofolio in stocks with no regards to portfolio diversification through asset classes.

You seriously have no idea how many people 1-2 years out from retirement are still 100% in the stock market because they're afraid of missing out on high stock market returns before they finally call it quits.

As mentioned, if you have a long term horizon like 10 years+, you would be an absolute idiot to not put money to work right now. Prove me wrong, you won't and you can't.

This is "all the holes I dig in the yard keep meteors from falling on the house. Prove me wrong" logic I'd expect out of a 7-year old. I mean, I've only pointed to a instances where a 10-year horizon clearly left you underwater - including the '08 downturn that eventually left investors in the same exact spot they would have been had they just parked in Treasuries for almost 14 years - but hey ... if we ignore all the times it's wrong, it's always right!

And on the second bold...you don't know that. You talk like this is a guarantee...which is absolutely not. You don't try to time the market because you will end up on the losing end of things a majority of the time. Even if you are half right, you are still in better position then if you are completely wrong.

Bookmarked for the future.

Anyone in this thread wants to follow his advice, you're shooting yourself in the foot.

"I disagree with you, so obviously you're wrong because there's zero chance I'm ever going to admit I might not be right. BUY STOCKS, ALWAYS AND FOREVER!"

 

[Bruins4Lifer]

You seriously have no idea how many people 1-2 years out from retirement are still 100% in the stock market because they're afraid of missing out on high stock market returns before they finally call it quits

How many? Or as a certain % of people <2 years from retirement.

 

[Fixed to Ruin]

How many? Or as a certain % of people <2 years from retirement.

That's alot of boomers.

 

[48g90a138pts]

Dropping this off here as ppl who like to invest like trading ideas.
Explainer: How the coronavirus crisis is affecting food supply

 

[Fixed to Ruin]

 

[Hockey Outsider]

Jesus, you could have just said "there is never a bad time to buy, there is never a good time to sell."

Does buy/hold "guarantee" to get you rich slowly? Well, that all depends on where you're buying in, but let's skip that and just say "yes." That still leaves you riding every climb/drop. Great on the climbs, painful on the drops. The buy-and-hold crowd looked great in 2007; at the end of 2008, a shitload of return had been wiped out. Ask people who were planning on retiring in 2009 or 2010 how great buy-and-hold was for them. By the time markets bottomed in 2009, you were in the same exact spot you would have been having just sat in Treasuries from May, 1995 to then. That is what "buy-and-hold" got you: two market peaks and ensuing declines, all the volatility of the 2008 meltdown, and nothing extra to compensate for all of it.

I've been investing in the market long enough to know that every time the market screamed to new highs at ultra-rich valuations, the "this time is different" crowd was out in force. We're at permanently new highs, recessions are a thing of the past, buy the dip, this is temporary, this won't spread to the broader market, ... heard 'em all. Watched them all get disproven, often in crushing terms. Watched people go from crowing about 15% annual returns to freaking out about being flat or worse. Hell, look at the most recent this is a generational opportunity to buy screams. Yeah, it's a generational buying opportunity you last had ... 14 months ago. You know, when no one was saying it was still a generational buying opportunity; it was just the stock market is going up forever, valuations are fine, all is fine.

Is "just start plowing into the market now, ~25% off all-time highs" the worst idea in the world? No, I can think of worse. That still doesn't make it a smart move, though. Should everyone be gambling on short-term moves? Hell no; even my comments are couched with "this is in a play account, if it all disappears no big deal." But I sure as hell wouldn't move my IRA and 401(k) back into the market all-in like everything is fine, March was an aberration and everything is going to back to going up forever.

There are times to buy. Right now is not one of the smarter ones to do it, unless one is totally comfortable with the possibility of watching at least 30% (and more likely 50%) of it disappear before things finally hit bottom. If someone is OK with that, go for it.

I didn't say there's never a bad time to buy. Clearly, certain times are better to buy than others. But the number of individuals who can predict that in advance (i.e. beat/time the market), over the long term, is exceedingly small. So the question is - is the average person better trying to time the market, or buy consistently throughout the span of their career? It's not even a matter of opinion. There's a huge amount of academic research showing that the average person is better investing long-term and riding out whatever waves exist.

"Ask people who were planning on retiring in 2009 or 2010 how great buy-and-hold was for them". If someone was planning on retiring in 2009, and still had their portfolio heavily invested in equities at that point, then I say, with all due respect, that's their fault for taking on too much risk. It's well established that people approaching retirement should gradually move out of stocks into less risky assets (cash, bonds, maybe preferred shares). But that has nothing to do with attempting to time the market - it's changing their portfolio allocation to avoid "sequence of return" risk (that is, the risk that their investments tank right around the time they retire).

"By the time markets bottomed in 2009, you were in the same exact spot you would have been having just sat in Treasuries from May, 1995 to then". That's obviously a cherry-picked example. The vast majority of five- or ten-year periods that can be picked from the 20th/21st century show the market rising, usually significantly. There's certainly the possibility of decreases over some five and even ten year spans, but the longer the time frame is, the lower the likelihood of a loss. By the time you're looking at thirty year time frames (ie the amount of time someone needs to save for retirement), there are zero such instances of stocks losing money. (That doesn't mean it can't happen in the future - but the prospect of the US/world stock market not growing for three decades would require such a serious disruption to society that money, as it currently exists, would probably be worthless or obsolete anyway).

(Another point to consider - I believe from the numbers you're quoting you're only looking at the Dow Jones index value - you've ignored all the dividends that would have been paid over those 14 years, which still would have made you wealthier had you bought stocks instead of treasuries - even in a cherry-picked worst-case scenario).

"I've been investing in the market long enough to know that every time the market screamed to new highs at ultra-rich valuations, the "this time is different" crowd was out in force." I can't speak to your experience, but in my own experience, I can say that this is a mischaracterization of most long-term investors. The vast majority of buy-and-hold investors that I've spoken to have no illusion that there will be growth every year, or make statements like "recessions are a thing of the past" (an asinine position). They just don't care (or, maybe more accurately, know that they're not smart enough to time the market). If you're saving for retirement twenty or thirty years away, why panic over a temporary correction that will ultimately be reversed?

"Should everyone be gambling on short-term moves? Hell no; even my comments are couched with "this is in a play account, if it all disappears no big deal." Fair enough, I think it's fine to take that position. For me personally - in the past, I've made highly speculative investments. Some worked out well, others failed (but in every case, it was money I could afford to lose). But at this point, I've concluded that I work too hard to risk losing money on bad investments. Everyone's individual mileage will vary, of course.

"Right now is not one of the smarter ones to do it, unless one is totally comfortable with the possibility of watching at least 30% (and more likely 50%) of it disappear before things finally hit bottom. If someone is OK with that, go for it." For the record, I have no idea where the market will go from here. A 50% drop would be extreme (since we're already down around 25% over the past two months) - but we're living in uncertain times. It's a possibility (personally, if the market dropped 50%, I'd scrounge together every spare penny I had to buy more stocks). But I also know people who missed out on years' worth of gains because they kept "waiting for the bottom" in 2008. That’s the thing – nobody knows where the market is going. If someone has a chunk of cash I definitely wouldn’t suggest going all-in today, but I also wouldn’t suggest keeping it all in cash and waiting for a bigger drop that might never come.

 

[Ted Hoffman]

"No one getting ready to retire is 100% invested in the market." -- someone up above.

I can't share pictures of the texts I got last night from a former co-worker, but it's about our former boss. Guy's a VP, arguably (certainly in his mind) #4 in the company we used to be at, easily making mid-200s [including bonuses, it's over 300k] and has been over 200k for about 20 years. Self-described REALLY SMART guy, been a lot of places, seen a lot of things, done a lot of stuff. You name it, he'd done it and has past experience about it. Had planned to retire at the end of 2020; now is going to wait until the S&P gets to ~3600 to get to what he wants to retire on (which he thought would happen by early June) but doesn't want to have to work into 2023.

Yes, he's still 100% in the market with no plans to allocate to something at least more appropriate for his age, because ... see last sentence in prior comment.

 

[Ted Hoffman]

I'm only going to respond to this snippet, because it's all that really matters. And, because I have better things to do today than shred this post too. And, because no matter how thoroughly I shred it you and a few others will keep parroting the same lines because "I might be wrong" will never cross your mind.

"By the time markets bottomed in 2009, you were in the same exact spot you would have been having just sat in Treasuries from May, 1995 to then". That's obviously a cherry-picked example. The vast majority of five- or ten-year periods that can be picked from the 20th/21st century show the market rising, usually significantly. There's certainly the possibility of decreases over some five and even ten year spans, but the longer the time frame is, the lower the likelihood of a loss. By the time you're looking at thirty year time frames (ie the amount of time someone needs to save for retirement), there are zero such instances of stocks losing money. (That doesn't mean it can't happen in the future - but the prospect of the US/world stock market not growing for three decades would require such a serious disruption to society that money, as it currently exists, would probably be worthless or obsolete anyway).

(Another point to consider - I believe from the numbers you're quoting you're only looking at the Dow Jones index value - you've ignored all the dividends that would have been paid over those 14 years, which still would have made you wealthier had you bought stocks instead of treasuries - even in a cherry-picked worst-case scenario).

IDGAF about the Dow. I'm looking at the S&P for 1995-2009 and a few other notable time periods where 10-year returns struggled to beat Treasuries. Think I'm wrong? Go take it up with John Hussman and explain to him why he's wrong. Hell, maybe you can pitch him on the virtues of "buy-and-hold, don't ever do anything else" as well.

 

[Bruins4Lifer]

Yeah I suppose if you bought right before one market crash and then sold right after another, your returns probably wouldn't be very good.

 

[Bruins4Lifer]

IDGAF about the Dow. I'm looking at the S&P for 1995-2009 and a few other notable time periods where 10-year returns struggled to beat Treasuries. Think I'm wrong? Go take it up with John Hussman and explain to him why he's wrong. Hell, maybe you can pitch him on the virtues of "buy-and-hold, don't ever do anything else" as well.

This is the guy who's predicted 11 of the last 2 recessions, right? You gotta be kidding me.

 

[Hockey Outsider]

I'm only going to respond to this snippet, because it's all that really matters. And, because I have better things to do today than shred this post too. And, because no matter how thoroughly I shred it you and a few others will keep parroting the same lines because "I might be wrong" will never cross your mind.


IDGAF about the Dow. I'm looking at the S&P for 1995-2009 and a few other notable time periods where 10-year returns struggled to beat Treasuries. Think I'm wrong? Go take it up with John Hussman and explain to him why he's wrong. Hell, maybe you can pitch him on the virtues of "buy-and-hold, don't ever do anything else" as well.

To recap - you wrote a long rebuttal to me. I wrote a long rebuttal to you. Then you say you have "better things to do", but twice state you would "shred" the argument. That's just posturing. If you can disprove my points, then do it - otherwise I'm not sure what you're trying to accomplish here.

As for implying that I'd never admit I'm wrong - if you can show me a viable strategy that will make me more money, I'd implement it. My incentive is exactly the same as yours - to make as much money on my investments as I can (taking the level of risk into account).

Yes, I'm familiar with Hussman's article. I read it last fall. Some of the data that he provides is interesting. But the problem with it is it still doesn't tell you when to sell your stocks, or when to get back in. It just gives you some interesting metrics to consider. That's far from a practical, workable strategy.

By the way - if Hussman's argument is right and he really found a way to consistently beat the market - do you really think he'd give that away for free on the internet?

(Now Hussman's article appears to have been "proven right" with respect to the market being over-valued in fall 2019 because of the steep drop-off that just occurred. But it seems obvious that the catalyst for the drop-off was the pandemic, and the resultant economic shutdown - something nobody could have predicted six months ago. He ended up getting the right answer, at least six months out, but it was due to an unknowable event).

All that being said - whether Hussman's strategies have led to higher returns than a buy and hold strategy is a matter of empirical evidence. Hussman has a fund (HSGFX) that has the S&P as it's long term benchmark. Let's see how it's done from 2000 to today:

So this proves my point. The person you're quoting, who set up a fund designed to track the S&P but with "a combined focus on valuation and market action", has been soundly trounced over the past two decades. The fund had some impressive wins initially (he appears to have avoided the 2001 crash unscathed), but he couldn't sustain it long term - that's nearly always the case with active management. (According to the June 30, 2019 annual prospectus, you'd be paying his company an annual management fee of 0.90% - for the privilege of losing ground compared to the market overall). In case you think I've manipulated the data, this is taken directly from the aforementioned prospectus:

According to the most recent prospectus - he beat the market over one year, but lags badly behind after five and ten years. If you look through the fund prospectus, the table on page 6 shows that his fund had negative returns in seven of the past ten years (with none of the three years having more than about a 9% gain) - a truly stunning performance given that the S&P more than doubled during that period.

(To further prove my point - this shows the downside of being too negative on the market. Hussman has generally been bearish on the market and missed out on a decade's worth of positive returns - waiting for a crash that only came because of an unpredictable pandemic - and even taking that crash into account, you'd still have made substantially more money following the S&P than investing in his fund. In April 2010, the S&P was at 1,178 and his fund was at $12.71 - ten years later, even after a crash, the S&P is up to 2,488 and his fund is at $5.97 - so after that decade, you'd have doubled your money staying invested in the S&P, and you would have lost more than half your money following his bearish strategies - by virtue of missing out on a decade's worth of growth).

To be clear, this isn't an attack on Hussman - a highly educated, successful professional - it just shows the difficulty of beating the market over the long-term.

 

[NYSPORTS]

I mean it's laughable at how much everyone is trying to time at when they should jump back in the market. I'm not looking to make a quick buck here, if you have a long time horizon and haven't bought in yet....you are an idiot.

Markets have priced most of their concerns to this crisis.. correlations across asset classes went to 1, this is an indicator that we are close to or reached the bottom. I am not saying that the market won't go through vol.periods, but the worst is most probably behind us.

respectfully, how can the worst be behind us? It’s been literally 3 weeks. The coast line states haven’t even reached their Apex, many will reach that apex a week or two after New York while the States off the coast line have barley been touched by the Virus yet. Why would anybody with cash reserves dive into the market so soon? Forget timing the market, you could miss it by 20% and still make a killing when this collapses. Only the stimulus is holding it up IMO. Companies aren’t making or selling much of anything and this only started. I respect you’re in the hedge fund world while I was in close proximity to LTCM when Genius Failed. They had it all figured out too. I’m not sure we’ve ever seen anything like this.

 

[BahlDeep]

To recap - you wrote a long rebuttal to me. I wrote a long rebuttal to you. Then you say you have "better things to do", but twice state you would "shred" the argument. That's just posturing. If you can disprove my points, then do it - otherwise I'm not sure what you're trying to accomplish here.

As for implying that I'd never admit I'm wrong - if you can show me a viable strategy that will make me more money, I'd implement it. My incentive is exactly the same as yours - to make as much money on my investments as I can (taking the level of risk into account).

Yes, I'm familiar with Hussman's article. I read it last fall. Some of the data that he provides is interesting. But the problem with it is it still doesn't tell you when to sell your stocks, or when to get back in. It just gives you some interesting metrics to consider. That's far from a practical, workable strategy.

By the way - if Hussman's argument is right and he really found a way to consistently beat the market - do you really think he'd give that away for free on the internet?

(Now Hussman's article appears to have been "proven right" with respect to the market being over-valued in fall 2019 because of the steep drop-off that just occurred. But it seems obvious that the catalyst for the drop-off was the pandemic, and the resultant economic shutdown - something nobody could have predicted six months ago. He ended up getting the right answer, at least six months out, but it was due to an unknowable event).

All that being said - whether Hussman's strategies have led to higher returns than a buy and hold strategy is a matter of empirical evidence. Hussman has a fund (HSGFX) that has the S&P as it's long term benchmark. Let's see how it's done from 2000 to today:

View attachment 340432

So this proves my point. The person you're quoting, who set up a fund designed to track the S&P but with "a combined focus on valuation and market action", has been soundly trounced over the past two decades. The fund had some impressive wins initially (he appears to have avoided the 2001 crash unscathed), but he couldn't sustain it long term - that's nearly always the case with active management. (According to the June 30, 2019 annual prospectus, you'd be paying his company an annual management fee of 0.90% - for the privilege of losing ground compared to the market overall). In case you think I've manipulated the data, this is taken directly from the aforementioned prospectus:

View attachment 340438

According to the most recent prospectus - he beat the market over one year, but lags badly behind after five and ten years. If you look through the fund prospectus, the table on page 6 shows that his fund had negative returns in seven of the past ten years (with none of the three years having more than about a 9% gain) - a truly stunning performance given that the S&P more than doubled during that period.

(To further prove my point - this shows the downside of being too negative on the market. Hussman has generally been bearish on the market and missed out on a decade's worth of positive returns - waiting for a crash that only came because of an unpredictable pandemic - and even taking that crash into account, you'd still have made substantially more money following the S&P than investing in his fund. In April 2010, the S&P was at 1,178 and his fund was at $12.71 - ten years later, even after a crash, the S&P is up to 2,488 and his fund is at $5.97 - so after that decade, you'd have doubled your money staying invested in the S&P, and you would have lost more than half your money following his bearish strategies - by virtue of missing out on a decade's worth of growth).

To be clear, this isn't an attack on Hussman - a highly educated, successful professional - it just shows the difficulty of beating the market over the long-term.

Timing the market will hurt you in the long run...this has been proven relentlessly. Thank you for taking the time for this respone, this was awesome.

 

[BahlDeep]

respectfully, how can the worst be behind us? It’s been literally 3 weeks. The coast line states haven’t even reached their Apex, many will reach that apex a week or two after New York while the States off the coast line have barley been touched by the Virus yet. Why would anybody with cash reserves dive into the market so soon? Forget timing the market, you could miss it by 20% and still make a killing when this collapses. Only the stimulus is holding it up IMO. Companies aren’t making or selling much of anything and this only started. I respect you’re in the hedge fund world while I was in close proximity to LTCM when Genius Failed. They had it all figured out too. I’m not sure we’ve ever seen anything like this.

Not to get in politics, but Trump will have this thing rolling as soon as he can. Something that I feel like I always have to remind people is that the market already priced in available public information and expectations. The market has priced in the estimates of 100-240k death accross the country.

You don't time the market. You won't win. Ask all the active managers. There's too many variables, too many things happening especially in an unstable environment like this one.

I rather not take the bet of the market dropping another 20%. I rather just invest continously whenever I see the opportunity. I have no problem with people having a different opinion because this is exactly what the market consists off.

 

[Ainec]

Not to get in politics, but Trump will have this thing rolling as soon as he can. Something that I feel like I always have to remind people is that the market already priced in available public information and expectations. The market has priced in the estimates of 100-240k death accross the country.

You don't time the market. You won't win. Ask all the active managers. There's too many variables, too many things happening especially in an unstable environment like this one.

I rather not take the bet of the market dropping another 20%. I rather just invest continously whenever I see the opportunity. I have no problem with people having a different opinion because this is exactly what the market consists off.

What if all retail investors and some institutional investors just decide to not "time" the market?

Wouldn't this be bad for price discovery? The market is now dictated by the few remaining hedge funds and institutions.