12 replies to this topic

[pdx5]

Baron Rothschild, who once said "I made my fortune by selling too early" (a comment also made by Bernard Baruch). Look at this math based on annual gain/loss percentages for consecutive years: 20%, 20%, 20%, 5% beats 30%, 30%, 30%, -20%. 15%, 15%, 15%, 5% beats 25%, 25%, 25%, -20%. 20%, 10%, 5%, 5% beats 30%, 20%, 15%, -20%. 5%, 5%, 5%, 5% ties 15%, 15%, 15%, -20%. You can easily prove to yourself that even for a six-year market cycle, you still generally win even if you call out Baron Rothschild after year two. It just doesn't pay to risk the big loss. Above is a snippet from Dr Hussman's weekly column.

[da_cheif]

what else could hussman say.....he.ll be shutting down the current fund in favor a new one in the months to come......just like he did in 2000 " doesnt pay to risk the big loss".......lol.....so maybe he awta try a new line of work......geeziz...

[pdx5]

Chief, since there is no one who can predict timing of a big correction such as 20% crash, I tend to agree with the buy and hold strategy for most investors. Your age has to be factored in any investing decisions. The math however is true and could also apply to short term trades. Best, pdx.

[pdx5]

Chief, since there is no one who can predict timing of a big correction such as 20% crash, I tend to agree with the buy and hold strategy for most investors. Your age has to be factored in any investing decisions. The math however is true and could also apply to short term trades. Best, pdx.

[da_cheif]

"Chief, since there is no one who can predict timing of a big correction such as 20% crash" SEZ U

[pdx5]

NO NO NO Not me! I will go so far as to say, there are some serious storm clouds out there which COULD cause a 20% decline. But don't have the foggiest idea if that will happen or when. Now you know exactly where I stand. (In a fog).

[jawndissedi]

Baron Rothschild, who once said "I made my fortune by selling too early"
(a comment also made by Bernard Baruch).

Look at this math based on annual gain/loss percentages for consecutive years:

20%, 20%, 20%, 5% beats 30%, 30%, 30%, -20%.

15%, 15%, 15%, 5% beats 25%, 25%, 25%, -20%.

20%, 10%, 5%, 5% beats 30%, 20%, 15%, -20%.

5%, 5%, 5%, 5% ties 15%, 15%, 15%, -20%.

You can easily prove to yourself that even for a six-year market cycle,
you still generally win even if you call out Baron Rothschild after
year two. It just doesn't pay to risk the big loss.

Above is a snippet from Dr Hussman's weekly column.

Thanks for bringing this to my attention. Hussman's usually worth reading, but it helps to be reminded.

[novice]

Baron Rothschild, who once said "I made my fortune by selling too early"
(a comment also made by Bernard Baruch).

Look at this math based on annual gain/loss percentages for consecutive years:

20%, 20%, 20%, 5% beats 30%, 30%, 30%, -20%.

15%, 15%, 15%, 5% beats 25%, 25%, 25%, -20%.

20%, 10%, 5%, 5% beats 30%, 20%, 15%, -20%.

5%, 5%, 5%, 5% ties 15%, 15%, 15%, -20%.

You can easily prove to yourself that even for a six-year market cycle,
you still generally win even if you call out Baron Rothschild after
year two. It just doesn't pay to risk the big loss.

Above is a snippet from Dr Hussman's weekly column.

The last line in this table is a good argument for keeping money in CD or
in the saving account

[selecto]

"The last line in this table is a good argument for keeping money in CD or in the saving account." Purchasing SPX at the close 12-29-06, makes you 2.6% on your money as of today's close.

[U.F.O.]

OK...I don't get it.

20%, 20%, 20%, 5% beats 30%, 30%, 30%, -20%.

20%+20%+20%+5% = 65% (4yr holding period)

30%+30%+30%-20% = 70% (4yr holding period)

How does the first holding period beat the latter? Especially considering if the profits were reinvested each year in interest bearing securities. Is this some kind of "let it roll" computation? As in all funds grow and remain in the account, therefore the final year hit produces the worst investment? My guess is the 20+20+20 fund manager will be unemployed or underinvested in at the end of year 3 and won't get the benefit of saying "I told you so."

U.F.O.