No Way - Ain't Gonna Happen

If it gets said as many times this evening as it was said yesterday - maybe we'll have another up day Mark Young was a voice of wisdom that I do remember. I think its really cool that at least one person actually lists his running entry positions at the end of all his posts. How refreshing as opposed to after the fact reported trades. I wish him the very best and believe his trades will work out with some time. He'll probably end up making more than the majority of the daily in/out folks. Of course, I wish everybody on this board the best and good trading. Just an observation. There are a wide range of traders/investors who frequent this board. The daily trader who doesn't hold overnight is such a different animal than the interim or longer term trader/investor. I suspect that a lot, if not the majority, of capital invested by this board is tied up in retirement accounts that for the most part do not have the ability to jump in and out at will. Many retirement accounts, mine included, have just in the last year or so stopped allowing even multiple trades in and out of the same account in the same 30 day period. Yes - I recently got shut down from making a shift to S&P because I was in/out/in within a 30 day period. Point I'm making here is that many of us folks are searching for tidbits to help us make interim decisions - looking for major swings - not interested or able to move in/out multi times per day and obviously we are holding over night and over the weekends. Still - I consider myself a trader because I most certainly try to "time" the market and adjust my allocation of funds which amounts to the same thing in my book. If there is a point to my rambling observation, its simply a humble request for folks so inclined to consider adding to their postings any analysis they might have relevant to the interim trader. What I suspect sometimes happens is that a interim, longer term, investor/trader who is faced with longer term decision will be influenced by the more astute daily traders shorter term analysis. Jumping in and out of the market for many folks is not only impossible, but generally a losing proposition. Thanks for listening. P.S. - Nope, I have never made an investment based on one person's opinion - but I do respect the amount of analysis that comes from the board and I'm sure influenced simply because I spent hours a day reading it - and yes, I use extreme boar bullishness/bearishness as a contrarian indicator. P.P.S - I don't post much - but ready this board for hours every day for years. Just want to say that my all time favorite poster is Mr. Mark Young. What I like about Mark's posts is that he seems to carefully consider the impact of his statements and is seldom if ever overly confident; therefore, leaving the reading with the thought that he is trying to share a bit of info that he finds important enough to be worth saying and that perhaps the "odds" favorite the outcome. He also gives a whole lot of credit to his sources from this board if it applies. To top it off, he has one of the most pleasing voices on IKE's interview program. No, I'm not a subscriber nor do I know Mark.

Edited by sjj, 18 March 2008 - 11:00 PM.

Because this is a market, there are buyers and sellers who have very different opinions and time frames.
I have observed that most folks who post their trades will be attacked, and ridiculed.
Many of us don't want the hassle.
I love those who do post trades especially if they give a hint as to the reason.
And the moderators do all we can to keep down the nasty attacks.

Many retirement accounts, mine included, have just in the last year or so stopped allowing even multiple trades in and out of the same account in the same 30 day period. Yes - I recently got shut down from making a shift to S&P because I was in/out/in within a 30 day period.

That's my pet peeve #3!

You don't want to hear about pet peeve #1 and #2.

Edited by Rogerdodger, 18 March 2008 - 11:04 PM.

Roger, Sounds like we are in the same position. I'm suspecting you have your personal trading account that keeps you interested and part of all this day in, day out, volitility. Same here; however, I consider it my play money

Investing and Trading are completely different ballgames. One has got nothing to do with the other IMO. If one is a investor, i think TA is a complete waste of time. Why does one need to be bothered about market turning points, if they are investing for the long term ?. Does it really matter if one buys S&P at 1300 or 1200 or 900. Just buy every big selloffs and keep averaging down on subsequent big selloffs. Drawdown should not be a concern for LT investors. Market timing is essential when drawdown becomes a concern. That's what trading is all about. You can't have you precious trading capital tied in a major drawdown. Hence you tend to take losses quickly and get out. That also makes market timing and TA extremely important, when trading. All you need is diversification when you are investing. Money management is not a concern. Whereas money managment and trade management are the most critical aspects of trading. Since most market timers/gurus cannot catch major bottoms and tops, an investor relying on market timing is bound to miss major market moves. Wheras that's not a concern for a trader, who can get in and out any time he wants. Bottomline, i think market timing and TA is a complete waste of time for investor types. That's JMHO.

Edited by NAV, 18 March 2008 - 11:18 PM.

For several years I have been trading only IRA's & a 401-K with some of the limitations you've mentioned above. Pretty much swing trading. Only recently I have re-opened a trading account. But I have trouble with the 3 different mindsets you need to trade them. The 401-K has a once a day limit and must be traded an hour before the close. The IRAs have unlimited trading except for the 3 day settlement and no shorting allowed. (Thank goodness for the new short etfs: sds and qid) Today it was obvious to me that we were going to close at the high of the day but if I went long in the 401-K, I would get in at that high price. I'm not sure we are out of the woods so I didn't trade it. The IRAs I can jump in anytime as I did today at the pullback but now if I see a s/t high, I have to remember that I must allow for the 3 day settlement to trade again if I close the trade. It's so irritating. So I drink VODKA.

Since most market timers/gurus cannot catch major bottoms and tops,

I don't regret going to cash in the 401-K back in January.

Exactly Roger. I also have a traditional and roth IRA which I can trade exactly as you describe, including the ability to use short funds. I must confess that I don't pay enough attention to them as they are a relatively small percentage. The roth is the only one I continue to fully contribute to. Keeping on top of the major market moves and occasionally reallocate my portfolio has been of great benefit to me over the years in growing my retirement investment.

Since most market timers/gurus cannot catch major bottoms and tops,

I don't regret going to cash in the 401-K back in January.

RD,

An investor who got out in 1998 would have felt great. But if he missed the 19988 bottom and the subsequent run, he would have felt miserable.

Well, an investor who behaves like a trader, i.e settling for crumbs in between a major bull run is neither going to beat the market nor beat the inflation, especially when he is non leveraged and do not follow the rules of trading i.e money management and trade management.

Now how many traders do you think would have held thru the entire bull run between 1995 and 2000. Probably zero. There will be thousands of things to deter a trader from holding during such a big move - overbought, sentiment, cycles, waves...et al. But with adequate leverage and proper trading practices, catching various swings in between, he could have far outperformed the market.

But if an investor, who is non-leveraged settles for small crumbs and misses the major move, he would only have underperformed the market, not to mention the trading stress. My point is if one is an investor, one has to follow the rules of the investing game, i.e diversification, portfolio rebalancing and holding thru major market moves. If one is a trader, holding thru major market moves is the least important, while money management, trade management and market timing becomes the predominant concern. That said, i have seen many investors behaving like traders and traders behaving like they are investors.

Investors vs traders.
I hear what you are saying.

I feel for investors of Enron, BS, etc.

A friend of mine is a manager at a Sprint store.
He was an employee "investor" but could see the writing on the wall and sold above $21...

http://stockcharts.c...4129&r=8591.png

My wife was a 401-K employee "investor" of this jewel.
Fortunately she was able to cash out her 1/2 January 2007.
http://stockcharts.c...4129&r=2807.png

I like trading.
Investing is buying real estate. You can't lose!

RD and Sjj, I have both an IRA account and a Futures trading account. I consider myself a trader and i trade both the accounts. Rd, There's a way around the 3-day settlement in IRA. I do that by trading options. By trading 15-20 times leverage, by trading options, one can use only about 6-8% of the account and achieve the same effect as trading with 100% position size using non-leveraged vehicles like ETFs. That way only 6-8% of your account equity gets tied under the 3 day settlement. If i am trading intraday, i buy slightly out of money options with about .5 delta. If i am swing trading i use deep-in-the money optiions with about .9 delta to reduce time value decay. RD, All the examples you gave above violates the cardinal rule of investing i.e diversification. Same thing happened to the tech-heavy investors during the 2000 downturn. I know many investors who came completely unscathed even out of the 2000 market crash. But they were all well diversified.

Edited by NAV, 19 March 2008 - 12:41 AM.